Strategic CIO // Executive Insights & Innovation
Commentary
4/17/2009
03:12 PM
Bob Evans
Bob Evans
Commentary
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Oracle ERP Project Survives Cuts At $1.5B Metals Company

While the global recession has forced a 119-year-old metals company to cut $65 million out of this year's operating budget, the company is committed to funding the completion by year's end of an Oracle ERP implementation essential in its evolution to a global supply-chain provider or products and services. The payoffs will include operational enhancements as well as costs savings well into the future.

While the global recession has forced a 119-year-old metals company to cut $65 million out of this year's operating budget, the company is committed to funding the completion by year's end of an Oracle ERP implementation essential in its evolution to a global supply-chain provider or products and services. The payoffs will include operational enhancements as well as costs savings well into the future.The proof of the Oracle system's value to A.M. Castle & Co. can be seen in what the company is cutting while the ERP project is being spared: --a 20% cut in operating expenses, totalling $65 million --a cut in capital expenses from $27 million in 2008 to $3 million this year --reduced hours for employees and some layoffs --suspension of 401(k) contributions --executive salary cuts of at least 10%

The Oracle project was highlighted in a brief statement from company CEO Michael Goldberg, who said, "We remain committed to completing our Oracle ERP implementation by year-end, which will be critical in driving our company's future growth and emerging from this economic turmoil as a more lean and competitive business."

A.M. Castle also highlights the ERP project on its website as it describes the critical role the system will play as the company moves away from offering commodity products to higher-value services, and as it begins to offer global supply-chain services to customers throughout the world. This description serves as great examples to CIOs and other executives of how all types of companies - even those in 119-year-old heavy industries - can transform themselves with the help of IT to pursue higher-value opportunities.

Operating in more than 55 locations throughout North America, Europe and Asia, we work with international OEMs to better serve their multi-location production requirements and delivery needs. We also leverage our long-standing metals experience and focus on processing and other value-added services to better meet the unique requirements of industries such as aerospace, defense, oil and gas, power generation and heavy equipment.

By expanding our capabilities and services, A. M. Castle is growing to serve the more complex requirements of customers who are outsourcing non-core functions…. To accommodate this accelerated growth in products, services and customer support, we are continuing to expand and strengthen our infrastructure. This work includes key efforts in an organization-wide ERP (Enterprise Resource Planning) system, as well as re-engineering in specific facilities.

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