Engineered to be lean

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Driving around Ireland at certain times of the year you are very likely to see large bales of mown grass cut for silage wrapped in plastic in many fields. When you see these bales, the chances are very high that the machine that wrapped them was made by our Smart Company of the Month, Tanco Autowrap of Bagenalstown, Co. Carlow (www.tanco.ie).

Tanco is a family company that began manufacturing light engineering products such as tractor-trailed tankers and baling machinery for agricultural use in the early 1960s. By the 1970s the company was having success with its baling machine and decided to concentrate on that product line. Tanco was acquired by its chairman Liam Lacey in 1996. Since then it has grown its sales to a stage where it currently manufactures about 700 Autowrap machines a year and exports them to 35 countries worldwide. The product range has been constantly developed and improved and there are now three product ranges for round, square and mini-bales in trailed, front mounted and manual versions. Tanco employs 32 people at its 7,000 sq. metre head office and production facility and has a sales representative covering central Europe from his base in Germany.

Selling around the Globe

“For the most part we sell through importers and distributors abroad—think of the car dealership model on a much smaller scale,” says general manager Adrian Lacey, “We also take a direct part in exhibitions such as the famous SIMA agribusiness show in Paris,” says Lacey. Adrian is the second generation of Laceys to be involved in the business. “We have a healthy sales base in north America, while in recent years South Korea has been one of our most successful markets and we started selling into China some months ago. In Europe we are enjoying good sales in Scandinavia as well as across the Netherlands, France, Germany and Austria.”

Restructured to be lean through IT

Tanco’s success has been based on a policy of engineering quality and continuous product innovation, serving agricultural markets that demand performance, robust durability and functionality. Tanco has also been progressive in terms of computerising its operations and taking advantage of modern communications, for many years. “IT became particularly important since we re-structured the business about five years ago when we had many more employees at lower production levels,” Lacey explains. “We literally re-designed everything about the business so that we would have a leaner operation with a strong export focus. Technology was a large part of that, from using smart CAD (for design) to our Web site and portal for customer order checking to giving  remote access to our people working away from base all over the world. We have also recently moved to a sophisticated new ERP system”.

Tanco has a combination of cabled and wireless networking in Bagenalstown, running on twin HP servers and using principally Microsoft Small Business Server 2003 and its associated productivity applications such as Exchange and Outlook. There are about 20 desktop PC users with another half dozen people using laptops or tablet PCs. “The wireless network access gives great flexibility for occasional working in the stores or production areas or for our sales reps when they are here,” Adrian Lacey explains. “We were lucky enough to get on broadband some years ago and for about the last three years or so we have had a 3mb Internet connection. So our salesman in Germany, for example, can work from his home base as if he were right here on the office system.”  Everyone   working away from base can make  use of  the  company’s SonicWall software to create a secure VPN connection with head office.

3D Design using CAD

Since Tanco makes extensive use of CAD in the development of its products, the three design engineers have high spec HP workstation PCs running SolidWorks three dimensional design software. “Today’s engineering graduates are totally computer design focussed and it is very effective from our point of view because so much can be done and checked before we even cut a sheet of metal. The system can also output precise instructions directly to the production floor for the profiling machines in the plant including our gas plasma cutter,” says Lacey.

New ERP system brings benefits of real  time data

Tanco’s most recent major investment in IT is in a comprehensive ERP suite using Microsoft Dynamics NAV solution to manage the financial and management information within the company. “We wanted a fully integrated ERP solution that could give us real time information on all facets of the business,” explains Adrian Lacey. “We needed to be able to capture and calculate precise manufacturing and overhead costs; to compare our applied costs to our actuals and to analyse the variances. Now we can do that easily and quickly. It is already helping us to streamline processes and improve efficiencies as well as providing the essential things — accurate reporting capability and full visibility of work in progress and inventory values,” Lacey explains.

Prior to implementing the Dynamics NAV systems, Tanco staff had to gather information manually from production and input it into the management system, so the monthly management accounts were up to three weeks late and sometimes inaccurate.  “We had big variances between our true costs in terms of manufacturing and what we were actually recovering. Now we can capture the data on our live system and get management information in real time, which is much more productive, explains Lacey.”  The system was provided by Datapac Business Solutions, which is the company’s principal IT supplier on the hardware and maintenance front. Datapac advised on the solution initially and also handled installation and training.
 
“Because Dynamics links perfectly to our other Microsoft systems, including SharePoint, which we rely on for information sharing of all kinds, it has already been very productive,” Adrian Lacey says. “We are now implementing the CRM part of the package and getting used to it.  The next phase will be the HR module, which  will complete the suite.”

Cutting costs with Skype

Most smaller businesses like Tanco would be nervous about using Internet telephony but Adrian Lacey is enthusiastic about its ability to cut costs. “Last year we went on a big push to get everybody who could to use Skype for international calls. As you can imagine, since our markets are so widely spread our telecoms costs were pretty high. We have all found it easy and reliable to use in practice. When managers or sales people are abroad with their laptops and IP phone sets all they need is an Internet connection. Just log in and away you go! From the company point of view there was basically no investment and the costs savings have been very significant,” he reports.

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