Addressing China's need for ERP
By Kevin Parker, editorial director -- Manufacturing Business Technology, 10/1/2006 6:00:00 AM
The Beijing Diantong Wintronic Electronics Co. is found in the city's outlying Changping district. On a dusty, treeless road, within a white, two-story building sitting under a fierce sun, something less than 100 employees, mostly young, assemble printed circuit boards by hand. They live in an on-site dormitory, and, on a day in September, ate a company lunch of eggplant, tomatoes, peppers, and something starchy laced with a few grey meatballs.
Despite operating with such basic manufacturing processes, Diantong Wintronic's business was up 400 percent this year, and Zhang Hai Cheng, a company VP, says he's applying lean principles to his high-mix, low-volume contract manufacturing business to, among other things, train an inexperienced workforce.
Having worked for international electronics manufacturers in China, Cheng knows about ERP. He says Diantong Wintronic will need materials management software to mitigate risk only once it accedes to customers' requests to purchase materials on their behalf.
“China is the hottest ERP market in the world,” says Tim Farey, Asia general manager, VP, Fourth Shift Edition for SAP Business One, SoftBrands. “This is a great place to be. Local companies are viewing ERP as more strategic, and foreign direct investment continues to grow.”
The Chinese version of the Fourth Shift Edition for SAP Business One—introduced to the press at Beijing's opulent Kerry Centre Hotel one day after a visit to Diantong Wintronic—“is the right platform for domestic companies looking to grow their business. With it, SoftBrands really enters the local market,” says Farey.
The Fourth Shift Edition targets sites with 50 to 100 employees engaged in configure-to-order, make-to-stock, or mixed-mode production. The solution is already available in other global regions, but given some differences in the finance modules and language intricacies, the Chinese version took a bit longer to release.
The Fourth Shift Edition adds manufacturing functionality to SAP's Business One, the company's small-to-midsize enterprise solution. “SAP has 1,200 employees and nearly 11,000 customers in China,” says Andreas Hube, COO, SAP China, “with about 600 of them on SAP Business One.”
The Chinese ERP market is a study in contrasts. It is split amongst sophisticated international firms, large state-owned enterprises, and very many small domestic manufacturers.
Even within the domestic market, some companies are on their third system, while others just now see the potential of enterprise planning. On the one hand, managers ask basic questions, such as, “Why is it so complex?” Then again, they want to know the latest about service-oriented architecture.
All these contrasts and more were evident at the IT Solutions Development Forum hosted by MBT China at Beijing's Tianlun Dynasty hotel, and attended by more than 200 people. A Chinese government official's opening keynote spoke to the importance of IT as the country becomes further enmeshed with Western economies, but also for China to establish its own global brands.
Qin (Tony) Deng, a principal with SupplyWeaver, a British-based consultancy, contributed greatly to the forum's discourse with his seemingly equal proficiency in English and Mandarin. He says Chinese manufacturers inevitably will use IT to address significant supply chain disruptions—including stock-outs and shipping delays—being experienced by Western companies sourcing from China.
