Lacrimedics
ERP delivers operational improvements for medical device manufacturer
Overview
Founded in 1984, medical device manufacturer Lacrimedics is a provider
of Lacrimal Occlusion Therapies to physicians, hospitals and distributors
around the world. Lacrimal Occlusion is a treatment for Dry Eye Syndrome
and related Ocular Surface Diseases.
The Challenge
When Lacrimedics decided to replace their accounting and manufacturing
systems, they wanted an integrated enterprise resource planning (ERP)
solution that would support their growth and address a number of
operational problems. After 15 years in business, inventory was growing
faster than revenue, on-time delivery was slipping and a general lack of
information was negatively impacting financial and operational
performance.
A successful ERP implementation, and for that matter a successful
business, not only requires a vision, but also a plan, according to Brian
Logan, Director of Operations for Lacrimedics: “a vision without a plan is
only an illusion.” Any solution would ultimately have to support three
important corporate objectives: the ability to rapidly respond to customer
needs, deliver high quality products and empower employees. Adding more
challenges to the project, Lacrimedics operates in a heavily regulated
industry and has to comply with FDA Quality System Requirements (QSR),
ISO9000 requirements and European EN46001 requirements.
The Solution
Lacrimedics looked at several ERP systems targeted at small and
mid-sized manufacturers and systems from industry giants SAP, Baan and
J.D. Edwards. The systems were judged based on overall functionality, ease
of use, scalability and underlying technology.
“Cost plus utility equals value and Intuitive ERP from Intuitive
Manufacturing Systems provided the best value by offering the right
features at a very affordable price,” said Logan. “We are looking at a
return on investment of over 200 percent and we are very happy with the
choice.” For Lacrimedics, the core functionality relating to purchasing,
materials management and sales operations had the most impact
Lacrimedics’ Results
More than ten Key Performance Indicators (KPIs) were established to
measure improvements. They included metrics for inventory, delivery,
supplier performance, financial performance and quality. Significant
improvements were realized in all areas. Total inventory, including
external locations, has declined from 90 days on-hand to 15 days on-hand.
On-time delivery improved from 75 to 99 percent.
Another area experiencing improvement has been supplier performance.
With in-house and external operations, integrating sales forecasts and
managing inventory in multiple locations became critical.
“Intuitive has given us much better visibility and allowed our
suppliers to improve their own scheduling. On-time supplier delivery
performance has improved from 30 percent to more than 80 percent in less
than a year,” according to Logan.
Implementation was dominated by two main factors. First, the company
had a very aggressive timeline. They were moving to a new facility and
everything needed to come together at the right time without impacting
revenue. Second, implementation and maintenance of the system had to fit
an environment with very little IT resources available.
Intuitive ERP implementation actually took only 45 days and required
only one day of consulting services. “One of our subcontractors was
implementing a different system at the same time we started our
implementation. One year later, they’re still working on the system and
we’ve already had 12 months of results,” said Logan. “We found [Intuitive
ERP] to be very intuitive and the Import Wizards were phenomenal. We
imported over 8,000 customer records in only a few hours and the Wizards
even identified errors from our old system.”
All employees were asked to keep track of procedures and reports from
their old system in case the new system did not meet all their needs. In
the end, literally no modifications were required.
Lacrimedics’ Reaction
Lacrimedics believes strongly in empowering their employees. Financial
and operational information is shared with all employees, not just the
management staff. “Everybody uses the Executive Information System
everyday,” said Logan. “If employees have access to the information, they
can make better decisions.”
Unique for a company of its size, Lacrimedics has geographically
diverse operations and remote access has become an important part of the
business.
“We needed a system that would allow us to work any time of day, from
anywhere in the world,” said Robert Herrick II, President of Lacrimedics.
Intuitive offers an option that gives users a direct, real time connection
to the system. Sales executives can review their account histories and
have the ability to enter orders remotely. The management team in
California can track and analyze overall company performance. The
accounting group in Washington can perform all their standard financial
and accounting tasks.”
“As the company grows, we see more and more benefits from the
integrated solution Intuitive provides,” said Herrick. Lacrimedics has
become very successful and continues to experience at least 10 percent
revenue growth year to year. |
Challenges