Meeting The Demand For The AIDC Niche In ERP
Abaco, Inc., a $12 million VAR,
expects 400% growth for the second year in a row
by connecting AIDC seamlessly to ERP systems.
These software solutions cover and support a variety of aspects of a business like accounting and inventory and let these parts share pertinent information in real time. As a result, ERP is becoming an area that VARs and integrators can't ignore. Abaco, Inc., a San Juan, Puerto Rico-based VAR, has created its own niche for automatic identification and data collection (AIDC) within ERP – and the company is making a killing. Company president and CEO, Fernando Alvarez, says the company grew over 400% in 1998, bringing in $12 million. He is estimating the same growth for 1999.
So, how is Abaco profiting from ERP? The answer is "mobile enterprise management."
"We've coined the phrase, as well as the concept based on the leading role we have with integrating our software with handheld computers in the ERP market," explains Alvarez. "Mobile enterprise management is the ability of connecting all the different devices in a hardware-independent platform in different operating systems to ERP systems."
"Information is constantly gathered through AIDC devices like bar-code scanners, radio frequency identification (RF/ID) readers, handheld scanners, fixed-mount scanners and palmtop computers. Our product, called the Abaco Bridge, is a technology platform that seamlessly connects all of these devices to an ERP system. If someone is collecting data, such as shipping products that should be invoiced, that information goes straight to accounting. At the same time, the Abaco Bridge provides a subset of tools within its technology platform that helps AIDC peripherals gather data as well as upload it to the ERP system."
Abaco breaks these areas of data collection into three subsets. "First, we concentrate on automated data collection in manufacturing, distribution, warehousing and shipping," Alvarez explains.
"The second subset is mobile computing – industrial. This subset focuses on the mobile worker who, for example, stocks cans of beverages in vending machines. The worker sends information from the field back to the ERP system through handheld computers at any given time during the day. We call this sales route automation."
The third subset, mobile computing - professional, focuses on the professional employee using palm-top devices while on a business trip or at a sales meeting. "At some point," Alvarez points out, "the information they are collecting must be downloaded to the ERP system to send to payroll or to human resources, for example."
Connecting The Production Floor To ERP
"Our applications fill the gaps that ERP systems can't address," Alvarez explains. A recent installation at the largest processor of pork-related food products in the United States is one example of mobile enterprise management.
"The facility processes the entire pig by separating parts and placing these part in bins," Alvarez describes. "SAP provides a suite of business processes that address this manufacturing niche. We use fixed-mount bar-code scanners integrated with scales and RF printers to track inventory in each bin to find out what parts of the animal are being used and what is scrap. We also track the time it takes for each part of the animal to go through the processes to become sausage or bacon."
Abaco uses bar codes affixed to each container. "We could use RF/ID technology," explains Alvarez, "but it wasn't cost effective in this case since the company is printing as much as 500,000 labels per day." The information is collected by the scanners at each stage and fed to an SAP ERP system in real time through a TCP/IP connection.
The information gathered by the bar-code scanners is sent through the Abaco Bridge to the ERP system, where it could be routed to departments such as warehouse management, or sales and distribution. "Once those departments receive the information," Alvarez explains, "they process the information, keep what is pertinent and send it to other departments."
For example, a scanner sends information on how much bacon was processed in a one-hour time frame. That information goes to the ERP system and is sent to warehousing and distribution. From there, warehousing and distribution know how much bacon is available for shipment and how long it can stay in the warehouse on a real time basis. This information is sent to accounting. In accounting, an employee can determine the dollar amount for the bacon processed during that hour. That information could be sent back to distribution to create an order for drivers so they know how much meat is available to deliver and how much they should charge for each shipment.
Connecting The Mobile Worker To ERP
In the second scenario, mobile workers collect information and send it to the ERP system in real time or through batch processing/communications or at a specific time each day. "We have installed systems at companies that supply bottled refreshments," Alvarez says. "Since vending machines are scattered all over the country, companies send truck drivers out to fill the machines. These trucks are considered to be mobile warehouses."
Drivers count the inventory put on their trucks and pick up their handheld computers each morning. During the day, they enter the amount of money they collect at each vending machine, along with the amount of inventory they stock.
When the drivers come back to their branches and dock the handhelds in a cradle, the information they gather all day is downloaded through the Abaco Bridge to the ERP system. The Bridge sends the information to the appropriate ERP modules. Considering that one company could have 100 branches with 100 drivers at each branch, it's easy to see how valuable it is to have access to information like inventory and cash collection on a daily basis.
Drivers are not often computer literate, Alvarez points out, so the mobile devices are designed to be as easy to use as possible. "Return on investment (ROI) is pretty high for our customers," he explains, "because they have accurate, daily information on what's happening with these vending machines across the United States."
Making Offices Mobile
Abaco's third scenario is using data collection in the office. Salespeople, for example, could use their palmtops to keep their agenda. "Some ERP systems have an e-mail system, calendar system and travel expense system," says Alvarez. "Now, salespeople or CEOs can synchronize their calendars or enter expenses while on the road. While this type of data collection is not mission critical, per say, it is important for these mobile employees to send data to the ERP system regardless of where their jobs take them. Where they are becomes their office."
Alvarez says the ROI lies in the fact that the technology is mobile. "In this case," he says, "mobile enterprise management puts users in command of the ERP system."
Education Is Part Of The ROI
Abaco's whole focus is to reduce the total cost of ownership (TCO) for an ERP system, says Alvarez. "Our installations allow our customers to get more use from their ERP systems. We want to give our customers resources. This means we empower them to work themselves through our tools. Typically, they ask us to do the first installation and we teach them how to implement the technology at all of their facilities. We continue the relationship through a support maintenance role."
"Most of our customers are very large Fortune 500 companies," he adds. "We bring in teams and train them to roll out our installations. From there, it almost becomes a cookie-cutter approach. They just keep doing what we taught them at each site. We think this strategy works well."
Location, Location, Location
Abaco is a global player with research and development in Puerto Rico and sales and marketing just outside of Atlanta, GA. According to Alvarez, there is a large presence of Fortune 500 companies in Puerto Rico.
"About 200 of the 500 are represented here in one form or another," he explains. The island has a favorable tax climate, low wage rates and a favorable geographic location for trade. "Keeping in mind that Puerto Rico is a 100x35-mile island, it's obvious to see that we had a large laboratory to test the idea of interacting AIDC with multiple software platforms. Globally, we have customers in Europe, Australia, Latin America, Asia and the United States."
The company's initial focus was on legacy systems because ERP was not known at the time. "We started with Prisms and Mapics," Alvarez says. "We started connecting AIDC systems in industrial areas for GE, Intel, Merck and Sharp. This gave us a unique opportunity to test and experiment with solutions. That's how we started talking to companies with multiple platforms and learned how to build a technology plan to fit these platforms."
"When the ERP niche boomed, we had a large install base," he continues. "It helped that we made some unique decisions, like choosing Microsoft Windows instead of IBM OS/2 –even though Windows 3.0 was the newest version at the time. When it was time to shift from legacy systems to ERP systems and more client/server-based environments, our product had already addressed the needs to move from one system to another."
Abaco now faces the positive challenge of rapid global growth. "A 400% growth – especially two years in a row – is exciting," Alvarez admits. "Our task is to make sure that we provide exceptional service and never lose focus on quality externally and internally."
Time Is Always Of The Essence
Meeting the customer's expectations is always the hardest part of the job, says Alvarez. "Usually our customers realize they need our support late in the game. About 90% of what we do for our customers can be considered mission critical. We often commit to very aggressive timelines."
The next challenge for Abaco will be the enormous effort to make the Abaco Bridge handle real time information faster and more efficiently from the source of the data. "We will continue to work on how to make the process more efficient and more automated," says Alvarez.