Jay Wilson began to realize costs were out of control at Cavalier Homes when the company discovered two of its service technicians scheduled to service jobs in the same region were staying in the same hotel in Little Rock on the same night and didn’t know it.
Cavalier is just now learning how inefficient its entire operation was during those boom times and, more importantly, how much it’s going to need new technology if it’s to survive the implosion of the manufactured housing industry.
“We saw how much trouble we and the rest of the industry were in and realized we had to start making some changes,” says Wilson, chief information officer of the Addison, Ala. company. “We’d grown so rapidly, both internally and through acquisition, that we needed to organize ourselves in a way that made sense.”
The first order of business for Wilson’s team was to purchase and deploy an enterprise resource planning system that could manage all of its sales, accounting, manufacturing and service divisions in the same terms. A part in Belmont, Miss., needed to have the same stock-keeping unit (SKU) as a part in Addison, Ala.
After an exhaustive search, Cavalier opted for SAP’s R/3 software as the project’s backbone. It’s a project aimed at yielding improvements in sales, inventory reductions and manufacturing efficienciesbut that Cavalier, to its own disappointment, had to suspend last year when unexpectedly large losses in its core business forced it to identify costs it could cut.
To date, the SAP project is little more than half done, and Cavalier has invested $5 million in it. But that is enough to put the project’s benefitsas well as its challengesinto focus.
Wilson says the most difficult aspect of the installation was marrying Cavalier’s internal inventory-tracking and identification systems to the detailed requirements within the SAP system. For example, a screw or carpet or piece of metal used in the frame of a house might have had three or four different SKUs assigned to it at three or four different Cavalier plants. That had to end.
Defining a single standard for each part and service throughout the entire operation, and then making sure that same part number showed up at each steppurchasing, ordering, installation and later servicingproved to be the biggest headache throughout the SAP implementation.
“Once we were able to get everyone on the same page, it was amazing how smoothly the software ran and the kind of information we could get from it,” Wilson says. “But to get to that point took years off my life.”