Success Story:
Digitalization of quote-to-order processes
Gulf Extrusions (GEX) is a leading supplier of extruded aluminum profiles with powder coating, anodizing and fabrication as post-treatment. GEX has earned the reputation as one of the most innovative, productive, and reliable companies in the Middle East as the largest extrusion plants in the region with its six presses and its highly skilled workforce. Gulf Extrusions can produce more than 60.000 tons of extruded profiles per annum supplied throughout the Middle East, Indian Sub-Continent, Southeast Asia, Australia, Africa, Europe, and Canada.
The Challenge
Aluminum profiles are in high demand for construction projects, building cars, scaffolding and many other purposes. This means that it has been challenging for Gulf Extrusions to answer up to 10.000 profile enquiries every month, selecting from more than 13.000 available profile shapes, and even more combinations of surfaces, lengths, and packaging options. The whole process has been very daunting and error-prone.
In this market, the selling prices are traditionally calculated and bargained by weight based on the fluctuating rates of aluminum on the London Metal Exchange. However, surface areas and the complexity of the profile, which carries much importance in the margins earned on a profile are typically not related to the weight. This itself makes it difficult to manage the profitability of an order. To manage the complexity of the market, products, and quote-to-order process, it is required to have insight into products, manufacturing cost, production activities and business processes. Also, to have an overview of the integrated systems supporting the working areas, all the way from inquiry to invoice.
The Solution
To achieve a more streamlined and efficient quote-to-order process, a product model and full manufacturing cost analysis were conducted, and all the metrics and calculations of processing time, utilities and material consumptions were laid out.
The Oracle ‘Configure to Order’ process was implemented to present this in a simple form to the end-users and dynamically produce costs, margins, and production planning fundamentals (job orders with BOM and routing) for any shape and surface combination. All existing profile shapes and raw materials were defined in the Product Information Management module and workflows assigned to manage the maintenance and creation of new profile definitions.
GEX’s proprietary legacy production systems were kept in place and a tight integration was developed to exchange crucial production data.
The Result
- The sales, finance and general manager now have transparency into the expected profitability of every profile offered to a customer and orders with low margins are caught immediately.
- The awareness of the impact profile complexity, order sizes and surface treatments have on the profile cost is moved forward to the quotation stage.
- The process from receiving an enquiry to sending invoices for each shipment is handled in a well-integrated system keeping everybody informed on the current state.
- Furthermore, a very good foundation has been laid for taking further steps towards enhancing procurement information, actual cost capture, customer self-service and obtaining a more competitive advantage on the market.
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