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PGA Electric is a Romanian company specializing in cable products manufacturing. It has more than 3,000 customers and an annual turnover of over 38 million euros. Aiming for further growth, the company has since focused on improving and strengthening its business processes.
The PGA Electric team reached out to IT-Enterprise (Ukraine) to optimize cost calculation for its finished and semi-finished products. It was essential to factor in the variable costs of materials and production processes, as well as ensure automatic export of calculation results into the corporate ERP system.
The project took the IT-Enterprise team 8 months to implement. As a result, PGA Electric received an ecosystem of software solutions: Master Data Management, Product Data Management, CableDesigner, CableCost, which, in turn, is to facilitate further implementation of APS/MES. The customer noted significant workflow improvements: structured product data, less time spent calculating product prices, higher performance of process engineers, optimized consumption rates of basic materials, minimized human errors, quick processing of customer requests, easier modeling of standard product prices, etc.
Master Data Management (MDM) allowed the project team to unify and synchronize PGA Electric’s master data and create a single digital environment for R&D. The MDM subproject covered the development of a classifier structure for finished products, semi-finished products, raw materials, equipment, process drums and commercial drums (use of packaging). It also included setting up a price list for materials and electricity with real-time updates via integration with the company’s ERP system.
Now, these customized directories and classifiers ensure that CableDesigner and CableCost are used effectively to solve routine production tasks.
As the next step, IT-Enterprise implemented Product Data Management (PDM) with registers of manufacturing operations, routings, material consumption rates, and Bills of Material (BOM). PDM receives updates from CableDesigner calculations, allowing for a comparative analysis of available technical information. This is an important condition for manufacturing execution and the calculation of standard production costs.
CableDesigner is a tool to formalize the design and manufacturing of Cable & Wire products according to international standards. It has enabled the automatic addition and updating of master and product data (MDM and PDM) in PGA Electric’s management systems, including the characteristics of semi-finished and finished products, their properties, material consumption rates, standard operating times of the equipment, operational standards for energy consumption, and worker time sheets.
CableDesigner has greatly simplified product development, helping to create a clear description of each step in product manufacturing considering a variety of resources and operations. With CableDesigner, PGA Electric has received a single database for managing product design and manufacturing technology. This saves time recalculating the existing rates (standards) and allows users to create new product groups faster.
CableCost helped to create a model to determine the standard price for PGA Electric’s semi-finished and finished products. To calculate standard costs, it uses data on material consumption, product variants obtained through CableDesigner calculations, and material prices from the MDM system and the corporate ERP. CableCost provides standard prices for different manufacturing options on a certain date and with various parameters. It can also compare the cost of several production variants based on their profitability and model changes in material prices when calculating the standard product price.
The project has also provided a background for implementing APS and MES tools to control and plan the production of Cable & Wire products. These software solutions turn each production order into a clear and consistent process that involves planning, quality control, and manufacturing execution.
Our software implementation and user training project was done remotely 95% of the time, which is a sign of effective communication and a high level of responsibility on both sides. As a result, optimized price calculation processes have allowed PGA Electric to manage product margins and provide its customers with better offers and variants for calculating product prices,
comments Oleg Shcherbatenko, founder and CEO of IT-Enterprise.
The economic benefit of PGA Electric’s digitalization is a 0.5–2% reduction in production costs. Importantly, the project has also achieved the objective of optimizing the work of the R&D team and manufacturing processes.
PGA Electric is looking to increase its exports to European markets. Therefore, it focuses on building flexibility, reducing costs, scaling up production and logistics, and implementing IT tools.
