Fast-track ERP project integrates business functions for Madison Paper Industries

Pulp & Paper, Aug 2003 by Shaw, Monica

At Madison's Maine mill, a six-month ERP system project has interfaced IT systems across the supply chain, building on knowledge resources throughout the mill for its success

In addition to keeping its 20-year-old supercalendered-A (SC-A) paper machine in top-notch condition (see Pulp & Paper, April 2003), Madison Paper Industries (MPI) in Madison, Maine, has also invested in advanced information technology (IT) to support its make-toorder production environment. From roll tracking and trim optimization software to enterprise resource planning (ERP) and wood procurement systems, MPI employs a range of systems to serve internal and external customers with functions that span the supply chain.

In May 1998, Pulp Fo Paper reported on MPI's successful use of a paper machine scheduling, trim optimization, and load planning software package. At that time, the mill was closing in on completion of a fast-track ERP system implementation that involved interfaces with several mill systems. The project, budgeted at approximately $1.8 million, was primarily driven by the fact that much of the mill's software was not Year 2000 (Y2K) compliant.

MPI successfully started up its ERP system in June 1998, on time and within budget. Though the project went smoothly, it was not approached without some trepidation, according to Paul Michaud, an IT specialist at MPI who served as one of the project managers assigned by senior management.

"For every good story out there about ERP system projects, there are another three bad ones," describes Michaud."But the people on the internal project team had an average of almost 14 years of experience with our company, and their business process knowledge was critical to the successful startup and use of the software."

In addition to solving Y2K issues and supporting business processes, the software allows the mill a real-time view of financial performance throughout the month and can process special invoicing requests that were not previously possible.Also, much of MPI's software architecture is now used by Madison Paper Corp. in Alsip, Ill., a producer of lightweight coated (LWC) papers that is owned by one of MPI's parent companies, Myllykoski Oy of Finland. (MPI's other parent company is The NewYork Times).

LEGACY SYSTEMS LEFT BEHIND. Prior to June 1998, MPI was using legacy systems for order entry, invoicing, purchasing, financials, maintenance, and roll tracking. Much of this software had been developed in-house, but only the roll tracking system, which functions as the mill's manufacturing execution system (MES), had been upgraded for Y2K compliancy.

Madison had also installed a Y2Kcompliant scheduling, trim optimization, and load planning system from IBM in 1996. This system, which resides on an IBM RS/6000 server, is interfaced with the MES running on an AS/400.

Although Y2K issues were most pressing, the mill also had to deal with shortcomings in its order entry and invoicing systems, which could not accommodate complex customized orders without difficulty. Older database technology was forcing Michaud and his IT team to create a variety of software patches so the mill could quickly build orders and invoice them as the customer required.

ARCHITECTURE FOR A NEW MILLENNIUM. In 1997, MPI created a selection team with representatives from functional areas such as IT, sales, finance, maintenance, engineering, and materials management. The team evaluated software from three major ERP system providers, eventually selecting SAP's R/3 software for a variety of reasons.

For one, the software was highly integrated between the various business functions where MPI needed replacement software. It also provided a maintenance module, as well as sophisticated graphics capabilities for reporting. However, it was a feature within SAP's Mill Products offering known as the variant configurator that was the major deciding factor.

"Customers in the paper industry can order specific roll sizes, basis weights, and grades of paper," describes Michaud. "For example, we offer basis weights of 26- to 40-lb/3,300 ft^sup 2^ and roll sizes that vary from 14 in. to 150 in. in 1/16-in. increments. To avoid creating the millions of SKUs needed for every permutation of these and even more variables, the variant configurator lets you quickly configure attribute-based orders rather than SKU-based ones."

In addition to the variant configurator feature, MPI chose to install the following five SAP modules to replace and upgrade the functionality of its legacy systems:

Sales and distribution (S/D) for order entry and invoicing

Materials management (MM) for managing spare parts inventory, purchase orders, and requisitions

Plant maintenance (PM) for storeroom inventory, work orders, and invoicing

Financial accounting (FI) for accounts receivable, accounts payable, and general ledger

Controlling (CO) for cost center accounting

Also, to support the new ERP system and its interface, the mill had to upgrade three CISC processor-based AS/400's with three RISC-processor based AS/400s, which offered improved server features.