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Sometimes "rip and replace" is a good thing. Especially if your company has an aging ERP system running on an outdated database that had not been implemented properly to begin with. These were just some of the issues and shortcomings that affected day-to-day operations at Pemla Ink Technologies, a leading North American manufacturer and developer of ink and ink technology, based in Montreal, Canada.

"The old system basically didn't do what we needed it to do," said Paul Tatham, vice president of Operations at Pemla. "In particular, there were many holes in the system causing inaccurate costing and sales reporting, and poor visibility of inventory. Also, the system was painfully slow, but since there were so many issues around the implementation to begin with, and without local support, it was time to replace it."

As Pemla began the search for a new ERP system, Tatham developed a list of "deal breaker" criteria. First, he didn't want Pemla's business data to be locked into a proprietary database. "We wanted to own our data and connect to the data sources independent of the application," Tatham says. "We wanted to be able to access or query the data and repurpose it as we wished."

Second, the new system had to be platform independent. "We wanted something, at least on the server side, that wouldn't tie us to Windows or any specific platform. We were looking for a flexible solution," Tatham says.

Lastly, Tatham was very interested in working with a vendor with an open source philosophy similar to the Linux community. A solution powered by open source would be more affordable for Pemla, as well as provide the independence and flexibility Tatham wanted.

Balancing functionality and cost

In August 2006, Pemla selected the advanced ERP software solution from OpenMFG to replace its old system after considering a short list of several vendors. OpenMFG met every one of Tatham's criteria - data ownership, platform independence, and a firm commitment to the open source philosophy.

"OpenMFG gives us the right balance of functionality and cost," Tatham says. "Other vendors we considered couldn't measure up to what OpenMFG offered."

Tatham had also considered non-open source vendors, but he saw some glaring disadvantages. "The more I looked at open source, the better feeling I got," Tatham says. "Being locked into a single vendor is not where the company wanted to be. In our business, for example, we need to have multiple sources for our materials. Having only one source is dangerous, and I feel that this is true with software, too."

OpenMFG also met Pemla's criteria for an affordable ERP solution. "With OpenMFG, development costs can be spread across the user base, a model we're seeing more and more," Tatham says. "It also means that the code base will survive and evolve."

Pemla is an active member of the OpenMFG user community; the company contributed to the development of multi-currency capabilities and the CRM module in version 2.0 of the product, as well as “percentage bill of materials” functionality that is important to Pemla and other process flow manufacturers. Tatham notes that the company is interested in a collaborating on quality control module that another customer is developing, as well as a wireless bar code scanning module developed by another OpenMFG partner.

More accurate costing and improved inventory control

OpenMFG's authorized solution provider in Montreal, AS Plus Informatique, installed the system for Pemla, with both French and English-language users, on both Windows and Linux desktops. The server runs on Red Hat Enterprise Linux, and the open source PostgreSQL database.

Pemla relies on the Costing module of OpenMFG in particular to ensure that inventoried materials are correctly priced. Cost validation had been a huge challenge in the past since the old system did not have a costing function, and there was no easy way to work with offline costing figures. By contrast, OpenMFG's standard costing system is a foundation of the ERP, fully integrated into production, purchasing, and other relevant modules; the system also supports actual costing, and rolling up any combination of actuals into standard at the administrator's discretion.

"The OpenMFG costing system is very powerful," Tatham says. "We could set up costing for every footstep in production if we wanted to. But we want to simplify the process, although now we have the ability to do costing in a fine-grained way if we wanted to. That's probably the single biggest change to our workflow."

Tatham says that OpenMFG will also provide much needed visibility into Pemla's inventory. "Too often we'd run into situations where we would have either too much inventory or too little," he says. "OpenMFG will give us better control of inventory than we've ever had before."

Bottom line: Improved speed, performance, and productivity

Pemla recently upgraded to version 2.02, and the process of downloading and installing the upgrade from the OpenMFG web site is fast, simple, and "beautiful," according to Tatham. The company also easily backs up its entire PostgreSQL database to a portable USB hard disk every night - another fast, simple, and reliable function that runs from an automated script on the Linux server.

"We're optimistic that OpenMFG will continue to improve our operations," Tatham says. "System performance is so much better. I had to reboot the old Windows server once a week. I couldn't trust it. With OpenMFG on the Linux server, I just forget about it. The only time I have to intervene is if we've had a power failure.”

One of the key benefits of the OpenMFG solution is that Pemla executives now have better information for making product decisions. The Pemla sales force can access and manage real-time sales data in just seconds over the Internet. Overall, the staff at Pemla is very happy with the OpenMFG ERP system, citing the speedy performance, straightforward user interface, and short learning curve.

"With OpenMFG, we're confident that we have accurate information when we look at our financial statements," Tatham says. "Before, we had no faith in the numbers coming out of the old system. Year-end financials used to take months to complete. Today we can look at the numbers anytime and know they're right."