“As we shorten our delivery times and capitalize on our flexibility in meeting changing customer requirements, we become more competitive and enjoy higher levels of customer satisfaction. That will reflect in increased revenue.”
Tronrud Engineering AS, founded in 1977 and headquartered in Hønefoss, Norway, designs and manufactures custom equipment for clients in the oil and gas, photovoltaic, and fish and food processing industries. With the minor exception of some parts and components, Tronrud’s manufacturing is entirely project-based and requires close collaboration with clients. Every product is a prototype, and it can take up to a year to complete design and production. The company’s production for oil and gas industries includes such machinery as pneumatic transport trolleys for heavy equipment, low-pressure flare ignition systems, and others. For clients in the photovoltaic industry, Tronrud has developed a wide variety of materials-handling equipment, including machines used in wafer production.
A Crossroads for Business Management Technology
As an early adopter of ERP technology, Tronrud managed its business with an ERP system created by a Norwegian software company. In addition, Tronrud design engineers have for many years used Siemens Teamcenter as their product lifecycle management (PLM) solution together with Siemens NX design and engineering software, both provided and supported by Siemens reseller Summit.
Acquisition of Tronrud’s ERP provider by another company meant that the ERP system was no longer enhanced and supported. The company decided against managing production with an obsolete software and reviewed the leading vendors. Tor Morten Stadum, Manager of Design and Engineering at Tronrud, says, “From among several finalists, we chose Microsoft Dynamics AX because we felt it was a good fit. It gave us all the capabilities we looked for and appeared to be highly manageable, starting with a standardized, efficient deployment right out-of-the box. We saw that as an opportunity to reduce the costs and effort of system maintenance and upgrades for the long term.”
Bridging Systems with a Committed Technology Partner’s Assistance
Tronrud found a responsive, collaborative technology partner in Columbus Global. “Columbus understood our industry challenges and took a vital interest in our ERP objectives,” Stadum notes. Columbus implemented Microsoft Dynamics AX 2012 for Tronrud, managing the entire project including other software tools and integrations.
To fully adapt Microsoft Dynamics AX to its business model and requirements, Tronrud deployed the ERP system in integration with the Advanced Project Management, Product Engineering, and Visual Project Planning modules of To-Increase Advanced Discrete Manufacturing. A cornerstone of the project was the integration between the ERP and PLM systems. Says Stadum, “Tronrud had created its own connection between PLM and ERP systems by means of XML and Excel files. It was not as effective as we would have liked, but it made us aware of the productivity potential of a powerful, standardized integration.” To-Increase offered a solution in its Teamcenter PLM Integration, whose main engine is functionality present in To-Increase Connectivity Studio, one of the To-Increase Business Integration Solutions for Microsoft Dynamics AX. Stadum adds, “We wanted to take advantage of the ERP implementation to make a number of improvements in the way we work. To achieve that, a robust integration with the PLM system was absolutely essential.”
Integrated ERP Infrastructure Simplifies Processes
Tronrud and Columbus completed the project in May 2013. Since then, close to 50 employees use Microsoft Dynamics AX. Stadum and a team of 15 design engineers working in Teamcenter rely on the ERP integration to transfer information. All design and CAD work takes place in Teamcenter. “The workflows in Teamcenter trigger the PLM integration,” says Stadum. “At the right moment, the engineers push a button to move information from Teamcenter into Microsoft Dynamics AX. Because many of the prototype products we create are extremely complex, BOMs can include several thousand lines. The integration automatically populates item IDs and project structures in Microsoft Dynamics AX. The ERP system then provides us a confirmation that it received and processed the data.”
Following the successful deployment of Microsoft Dynamics AX, Tronrud design engineers noticed sharp differences in transferring data from the PLM into the ERP systems. Within a short time it became obvious that the Teamcenter and Microsoft Dynamics AX integration promoted more efficient workflows and helped Tronrud reduce costs.
Reducing Delivery Times and More Effective, Flexible Materials Planning
“We have observed that it now takes less time to put designed deliverables into production, because we have a far more efficient way of managing the handover from CAD and design engineering to manufacturing,” says Stadum. “That makes a difference when we are trying to prove to new customers that their decision to contract with us was the best they could possibly make.” Shortened delivery times will also be a competitive differentiator for Tronrud.
The design team now performs all of its work within Teamcenter, no longer in both the PLM and ERP systems. In a seamless item workflow, engineers create components in Teamcenter, register them just once, and move them on. More advanced visibility of BOM requirements means that procurement can get a headstart on sourcing items with longer lead times. Manufacturing starts earlier, because workers can prepare the process and make components without having to wait for all design activities to be complete. With improved quality and revision control, Tronrud engineers were able to eliminate a BOM review that they used to perform to ensure accuracy. The process is also more flexible, making it easier to change details in products and their components. “One of the greatest advantages of the efficiencies our ERP and PLM integration enables is that we can adjust a BOM when production is already underway,” explains Stadum. “We can address issues, create another version of the BOM, and make changes in production. This saves us a lot of work and time, and lets us shorten delivery times to customers. We are well on track to achieve our 2014 goal of delivering 97 percent or more of our projects on time.”
Generating Cost Savings and Expecting Higher Revenue
Several factors related to the ERP deployment and the PLM integration also help Tronrud’s bottom line. As Stadum explains, “To begin with, the highly standardized implementation of Microsoft Dynamics AX and the PLM integration helped keep the deployment itself on track, and the ERP system will remain highly manageable, with economical, uncomplicated future upgrades and enhancements. And, we now enter information just once, instead of repeatedly, which means we avoid errors, don’t have to spend time correcting them, and can do without the frequent double-checking of data accuracy we were used to—the confidence in our integrated ERP and PLM systems is extremely high.”
In evaluating cost savings, there are also the process improvements to consider. “It takes less time to get to the handshake confirmation between Teamcenter and the ERP system,” notes Stadum. “Because of the automations at play, the process takes fewer people, so we save person hours. We found other opportunities for efficiencies and savings; for example, we simplified the process of creating documentation for our prototype products. Also, because procurement understands material requirements earlier, that team is in a much better position to negotiate better terms and reduce the spending on materials.”
Ultimately, the strongest proof for the value of ERP and the PLM integration at Tronrud will come from customers. “As we shorten our delivery times and capitalize on our flexibility in meeting changing customer requirements, we become more competitive and enjoy higher levels of customer satisfaction,” says Stadum. “That will reflect in increased revenue.”
Best ERP Practices for Custom Manufacturers
Tronrud’s deployment of Microsoft Dynamics AX and the Teamcenter integration confirmed for Stadum and his colleagues many of their ideas and clarified best-practice concepts. Stadum comments, “For companies in a make-to-order business where every product is a prototype, it is critical to bridge ERP and Teamcenter. There are not many other things you can do and accomplish so much in terms of improvements.”
Tronrud performed diligent data cleansing before the ERP and integration implementations. “We invested much time in ensuring the integrity of our business information,” says Stadum. “That effort helped us accomplish a smooth, efficient deployment. It is very important to have a clean, high-quality database of components before going further with an ERP project.”
Finally, companies should take advantage of an ERP deployment to introduce business process improvements. Says Stadum, “Instead of incurring the expense of customizing your system, you might want to consider adjusting your processes instead, especially if you can make them more efficient and productive by doing so.”
Tronrud expects to grow with Microsoft Dynamics AX and To-Increase’s PLM Integration and industry software for many years to come. Stadum and his colleagues are looking forward to enhancements from To-Increase that will make the integration even closer and allow engineers to become more productive yet.