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Posted: 11/20/2012
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Shanghai CHILO Press Company Chinese Manufacturer Automates Inventory Management with Intelligent System

Shanghai CHILO Press Company, a Chinese manufacturer of iron core motors, wanted to increase profitability and accuracy by eliminating manual inventory management processes. To improve efficiency, the company implemented an automated inventory solution based on an intelligent system that wirelessly connected Motorola handheld devices to a back-end ERP system. As a result, CHILO has cut its loss rate by 46 percent, gained better control over inventory, improved business agility, and strengthened its competitive advantage.

Business Needs

Shanghai CHILO Press Company is a Chinese manufacturer of iron core motors used worldwide in industrial equipment and consumer goods, including factory cranes, water wheels, home appliances, and electrical engineering products. One of five manufacturers worldwide that produce energy-saving motor technology, CHILO has annual revenue of approximately ¥1 billion (U.S.$160 million). The parent organization, CHILO Industries Company, was established in 1990 in Taiwan, China.

To stay competitive and profitable, CHILO wanted to improve inventory management. The company relied on the timeliness and accuracy of data stored in its ERP system from DigiwinSoft, which it used to manage its entire operation, including costs and production. However, the manual processes it was using to collect and enter information into the system were both time-consuming and prone to error. Instead, CHILO sought an intelligent system that would automate inventory management by wirelessly connecting handheld devices to its ERP solution.

Solution

With help from local partner Digital China, CHILO began implementing a new inventory management system based on the Windows Server operating system, SQL Server data management software, and an operating system from the Windows Embedded Handheld family running on Motorola MC9090 devices. The company chose a Microsoft platform because it believed it would be easy for employees to use and would provide the best connectivity between its line-of-business system, databases, and mobile devices.

CHILO deployed six handheld devices with barcode scanners, and installed 18 Motorola wireless receiver access points throughout the plants. After data is scanned and collected with a handheld device, it is wirelessly transmitted to the closest access point, which in turn sends the information to the ERP system and a SQL Server data warehouse running on Windows Server.

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* After using an intelligent system based on Microsoft technology, our error-entry quickly fell from 50 to 4 percent within six months. In addition, with better inventory management … we’ve converted a ¥600,000 inventory loss to ¥1 million profit in sales within the same six months.  *

Ms. Lili You
Production Director
Shanghai CHILO Lamination Company

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Employees are working more efficiently with handheld devices and automated data collection processes. “This solution from Microsoft and Motorola helps us save data entry time,” says Ms. Lili You, Production Director at Shanghai CHILO Lamination Company. For example, we simply scan the product bar code, and the data is automatically transmitted to the back-end ERP system.”

And for the first time, employees and select customers can accurately track information such as product quantity and also see when an item was produced. “Before, we lacked a batch number management system,” says You. “Now, we can attach a bar code and batch number to a product and meet our ‘first in; first out’ targets for inventory refreshment.”

Benefits

With an automated inventory solution based on Microsoft technology and Motorola handheld devices, CHILO is improving profitability and inventory control. As a result, the company is increasing business agility and building a stronger competitive advantage.

Reduced Data Entry Errors by 46 Percent

Before the new solution was implemented, CHILO estimates that inaccurate data entry contributed to a loss rate of 50 percent of profits. Now the company is seeing significantly better numbers. “After using an intelligent system based on Microsoft technology, our error-rate quickly fell from 50 to 4 percent within six months,” says You. “In addition, with better inventory management and a ‘first in; first out’ strategy, we’ve avoided product degradation due to rust. As a result, we converted a ¥600,000 inventory loss to ¥1 million profit in sales within the same six months.”

Improved Insight and Inventory Control

CHILO now has a more agile and lean manufacturing process, which also helps reduce costs. “We are reducing purchasing costs too,” says You. “We have better insight with an intelligent system from Microsoft. For instance, we can order raw material based on our actual inventory and gain more control over costs.”

Enhanced Business Agility and Customer Service

By integrating handheld devices with its mission-critical ERP system, the company can adapt more easily to changing requirements. You says, “Our ERP solution is now much more flexible and timely.”

The intelligent system also helps CHILO provide better customer service. “Our customers have access to current data, so they can order more easily,” says You. “And since we have firsthand knowledge of what we have in stock, we can quickly fulfill and ship the order.”

Gained Stronger Competitive Advantage

CHILO expects that the new solution will also help it build a stronger competitive advantage. Although the company is currently focused on automating inventory management to increase profitability, it believes that it can ultimately use the solution to enhance its business strategy as well. “Currently, the main advantage for us is inventory accuracy,” says You. “But we also anticipate that an intelligent system based on a Microsoft platform will help us gain future benefits in sales, promotions, and revenue.”

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Solution Overview



Organization Size: 140 employees

Organization Profile

Based in Taiwan, China, CHILO Industries Company manufactures iron cores for motors used in industrial and consumer products. Established in 1990, CHILO has annual revenue of U.S. $160 million. Its subsidiary in mainland China is Shanghai CHILO Press Company.


Software and Services
  • Windows Mobile 6.5
  • Microsoft SQL Server 2005 Enterprise Edition
  • Windows Server 2008 R2 Enterprise

Vertical Industries
Manufacturing & Resources

Country/Region
China

Business Need
  • Business Intelligence and Reporting
  • Cost Containment

Languages
English

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