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Concentrates Scheduled to Order at Holland Colours
January 2006

Holland ColoursHolland Colours NV is a global supplier of innovative and cost effective colour and additive concentrates to a number of select markets including Building and Construction, Plastic Packaging and Silicones and Elastomers. Founded and headquartered in Apeldoorn, NL, Holland Colours has multiple production facilities across different continents, which between them coloured over two million tons of plastic products in 2005. With the majority of the 3000+ products available worldwide being custom made to order, and ever increasing supply chain pressures from both customers and suppliers, Holland Colours needed a state of the art manufacturing IT system with planning and scheduling at its heart. It found the ideal formula in Ross and Preactor.

The nature of the plastics colouring market itself, supply chain pressures and specific manufacturing considerations combine to form a potentially daunting set of challenges for Holland Colours. Each existing customers has a different set of requirements, often influenced by external circumstances including legislation, which means that Holland Colours has to be able to respond rapidly to changes in order specification. The company has a saying that the time between the first point of contact and receiving the first order from a new customer is a year. This time is spent working closely with the customer to understand their business model and evaluating the impact of colouring on their manufacturing processes, for example line speed, impact resistance, scrap rates etc. As CFO Gert Jan Luiten understandably points out, “given the significant amount of investment at this stage, it is essential to then be able to deliver what the customer wants, and when they want it.”

Luiten describes the sales order process, 80% of which are by fax or email, the remainder being by telephone. “We have all existing recipes and process steps stored in our Ross Renaissance ERP system. Customer Service enters the customer requirements into Ross and the system generates a Capable to Promise (CTP) date. Behind the scenes Ross interrogates the materials availability and therefore the first date the order can begin.

Holland ColoursThis information is transferred to Preactor where the actual manufacturing processes can be scheduled all the way up until the order is ready for delivery. This is transferred back to the ERP system in terms of a delivery date. 80% of the time this is within the customers’ range of acceptability. Where it isn’t, we then have to apply a more detailed intelligent rethinking of the schedule which is where Preactor comes into its own.”

It is here that the external supply chain factors and internal manufacturing constraints are obviously most acutely felt. With regard to the former, Luiten bluntly sees Holland Colours, “caught between a rock and a hard place”. He elaborates, “Our customers want shorter and more accurate delivery times to remain competitive. Yet we have more and more suppliers in Asia with the consequential longer lead times. We have to manage the relationships both up and down stream within the supply chain which puts ever increasing emphasis on our ability to plan and schedule efficiently.”

And this means dealing with a complex range of secondary manufacturing constraints. Changeover times are highly variable depending on the sequence of colours used and the steps involved. For example, white following black requires a greater changeover time that black following white. Tank size is also vital as this limits batch sizes, as also is the sequence of availability of the tanks. As with most complex manufacturing processes, many products have a significant number of process dependent steps making optimised resource availability crucial. Moreover, Holland Colours strives to keep maintenance outside normal production hours but as this is not always possible, planned downtime is also a factor to consider.

There is a further constraint, which presents possibly one of the most demanding challenges and that concerns the variable nature of the raw product. Luiten explains. “At each step where raw materials are used, there is a degree of variability in quality. The finished product is therefore sifted and only the particles of appropriate size are used with the remainder being reused for a different batch.  Each step therefore has a potential mix of primary raw materials and reprocessed material and this can affect the schedule.”

Prior to the Ross and Preactor solution, Holland Colours was reliant on a combination of disparate ERP systems across its plants and manual planning boards. It was as Luiten understatedly describes, “not very efficient. “ He continues, “In addition to the obvious lack of visibility and control, the fragmented nature of the systems meant it was too much of a burden to maintain everything. Insight in the raw material availability e.g. when rescheduling was a tedious inquiry type job, not geared to the increasing volatility in demand.

Other reasons also contributed to the decision in 2003 to search for a replacement system. Most significantly, the effects of globalisation and unification of Europe were providing increasing incentives to rationalise Holland Colours’ European operations. Yet there was initial reluctance due to concerns about the viability of a single consolidated ERP solution. “Like many companies, we were aware of stories of failed ERP implementations and we knew we had to get it right first time. In discrete manufacturing there is a vast range of potential solutions but in our specific industry, the combination of being a Make to Order process manufacturer offered far fewer alternatives. When we added the other key requirements of longevity and global service provision, the list came down to 2.”

The decision to go with Ross and Preactor was taken in 2004 because Ross offered greater strengths in terms of recipe control and planning. Implementation commenced shortly afterwards, primarily on sales offices that required only Ross to be installed. The first implementation of both Ross and Preactor was in August 2005 in the Hungary plant. This was slightly delayed by Holland Colours undergoing its internal restructuring and reorganisation of its European division.

But, as Luiten admits, “the reorganisation simply wouldn’t have been possible without the Ross and Preactor solution. We wouldn’t have had the control and visibility required, nor the uniformity of process that a global solution provided.” The Hungary plant is connected via a Virtual Private Network (VPN). Preactor runs on a Citrix server and is accessible from each plant although the actual planning for both Holland and Hungary is actually executed in Holland.

Now Holland Colours has the control and visibility it requires across a growing number of its plants and is already seeing major benefits. One of the most significant is the ability to compare projected and actual work rates at a given plant. At a pre-defined critical stage, the production operative reports live date back into the system which automatically updates the schedule, providing up to date information on not just how the job in question is going, but how the business as a whole is performing.

“Ross and Preactor help Holland Colours to become a more global company” comments Luiten. “A lot of our procedures can now be, and are synchronised and as the rollout continues, this will only increase.” He continues, “Our CTP dates are much more accurate due to our better planning and scheduling which has a 2-fold benefit. Firstly, we have greater confidence in the accuracy of dates, which fall into 80% of our customers’ acceptable parameters. This ensures we keep these customers happy. It also however frees up more time and resource and gives much greater fine-tuning capability to apply intelligent scheduling to the remaining 20% of our customer requirements. We can manually adjust the schedules and immediately see the impact on the plant as a whole and by doing so, we are reaching more of that 20%.”

And the future? Holland Colours is continuing to roll out Preactor and Ross to its other facilities, with the US operation next in line. It is also investigating the possibility of using the system to plan inter-company deliveries for very specialist products, which may only be possible to manufacture at one physical location. As Luiten concludes, “If we achieve true multi site capacity planning, we could generate sales and works orders for any plant from any other plant. Then we’d be living in a perfect world.”