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 installed systems.
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 Martin said.
"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 black holes."
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 added.