NEW YORK At a time when a
number of major metals firms have reported challenges
implementing new software systems, at least one steel wire
drawer has opted to forgo established programs and develop its
own inventory-tracking database instead.
Steel wire drawer Mar-Mac Wire
Inc.s chief executive officer John Martin III told
AMM his company had originally installed a software
system from German technology company SAP AG, a leading
provider of inventory-tracking software for the metals and
manufacturing industry. However, Martin said Mar-Mac ultimately
deemed the SAP system too expensive and inefficient,
particularly after paying large maintenance fees and
encountering operating challenges.
As a result, McBee, S.C.-based
Mar-Mac replaced the SAP system in August 2010 with a
self-developed operating system to track inventory, purchasing
and shipping, he said.
"The reason we switched over is
we couldnt justify the costs, the tuning and maintenance
(of SAP). You have to hire someone on the outside to keep (SAP)
tuned up for you," Martin said, citing maintenance fees in the
range of thousands of dollars per month. "It was too big and
too rich a system for a small company."
Martin estimates that Mar-Mac
saved around 25 percent on costs related to the new in-house
operating system, but declined to name a specific amount.
Mar-Macs decision to build
its own software system instead of continuing to use one of the
established brands comes at a time when a number of big-name
metals companies have reported problems with their own
Tampa, Fla.-based Gerdau Long Steel North America, for example,
reportedly saw shipping delays from several of its mills
earlier this spring after transitioning to an SAP platform (
amm.com, March 6). Aluminum company Novelis Inc.
reported similar challenges after installing an SAP system at
its Oswego, N.Y., aluminum complex, president and chief
executive officer Philip Martens said (
amm.com, Feb. 14).
Representatives of Walldorf,
Germany-based SAP told AMM in March that most of its
users were satisfied with the system despite customary hiccups
in starting up a new software platform.
"In general, we have millions of users that are happily using
the system," Jennifer Scholze, senior director of global
marketing for mills and mining, said at the time.
But SAP wasnt right for
Mar-Mac, Martin said, noting that the program required outside
training and oversight and created "black holes" in his
inventory. The companys new system, developed by an
outside programmer and Martins son, John Martin IV,
clears up the problems of using the SAP system, the younger
"With SAP, our dead inventory
skyrocketed because we didnt have the ability to track
it," John Martin IV said. "(Now), its much easier to
monitor remote warehouses and say, Hey, youre not
rotating your stock."
The elder Martin agreed that the
new system allows him a much more thorough understanding of
Mar-Macs wire and wire rod inventory. If there is a
problem with tangles in the rod or significant rusting or if a
product needs to abide by the Buy America standard, employees
can easily track every bundle back to its source, he said.
"The strongest thing about it
for us is its transparency. We know exactly where every order
is. We know if its been scheduled to run or not run. We
know if its staged for shipping or not staged. We know
whether its been picked up," John Martin III said. "You
have control of the code. You understand the code. There are no
No system is perfect though, and
Mar-Mac has had to frequently update the work-in-progress
system, the elder Martin said. For example, the system does not
coordinate accounting with inventory management, he said.
"Were still dealing with issues, and were still
upgrading it. We will continue to upgrade the system," he