Insightive.tv: On a basic level, do you think the industry looks at IT as an enabler or necessary cost?
Stanton: I think that it is always a little bit of both. Howco management understands that IT is a necessity. But I think that the only way for the business to move forward is through the enablement of IT. In the current market, if you do not have innovation then you can’t move forward.
The companies that are going by the wayside are those that aren’t changing the way things are done. Howco has been around for over 30 years, and it is really hard to initiate change on a global level. But, we are doing it, and I think that if we weren’t doing it we would be behind the curve.
Insightive.tv: Can you go into detail about any of the recent developments Howco has undertaken?
Stanton: In 2011, we invested into the Cisco unified computing system. We have virtualised the entire infrastructure of Howco — it took about two years. We are currently running everything from our data centre. This means there is no longer a need for redundant hardware in every location across the group. Everything is run virtually through the network. If you are sitting in Singapore or Dubai, you are literally running all of your systems through our data system here in the US — with zero latency. From a long-term technical side, we see spending go down every year on PCs. We don’t buy them anymore. When a PC goes down we pick up a virtual unit and add a keyboard and monitor. We haven’t had a hardware refresh since I have been here. We just reinvest into more horsepower or disk space in our centres.
The most recent project, however, was forced on us in 2014 by our ERP provider. We were told that they were no longer going to support the system that we were running. Because we had made so many modifications over thirty-plus years, it forced us into a full-scale ERP implementation. This, however, has given us the ability to re-evaluate the internal processes across the group and really present a single methodology of how to do workflow throughout. We are now in a place where we can transplant someone from Scotland to Canada, and their work processes remain virtually the same; before, it was very bespoke. The changes have really brought us forward in our ability to fulfil orders and report results. The access to real-time information is a major improvement from the old system.
Insightive.tv: In the long term — what sort of plans do you have for digital transformation?
Stanton: In 2012, I took a trip to our plant in Dubai. We undertook a large renovation project to automate their system, remove paper from the process and get specific analytics on the work pattern of every person in the plant. In mid-2014, we did a nine-month prototype project — the results were outstanding. We could account for every second of every day of every single person in the manufacturing plant. Unfortunately, that was exactly when our ERP informed us that they were no longer going to support our installed version. That sidelined our MRP project. But it is something that we hope to revisit within the next eighteen months.
What I am really excited about, however, is that Howco’s face is really changing. The oil & gas business has changed and is unlikely to be what it was a few years ago, given the changes that have taken place. The recovery is expected to be slower than 20010, but we are well positioned to look at how we interact with our customers. One project we are going to unveil in the first quarter of 2017 is a CRM that will allow us to review the landscape of all of our alliance partners and understand the needs and wants of the market — not only regionally, but globally.
We will be able to see the demand for any type of material across the world and adjust accordingly. Strategically & tactically this is vitally important to ensure you are meeting the needs of your customer as you can’t really do that with every single piece of material that we sell without a global view and global communications across the team. Creating that kind of ability to plan is a goal that only IT innovation can achieve.
Insightive.tv: What are some of the difficulties you have faced undertaking digital transformation projects?
Stanton: Culture is a factor. With a company the size of ours, you have to factor in all of the cultures at all the different locations. Unifying those differences under a single system can create tension — confronting “that is the way we have always done it.”
We took the opportunity, when we put in the new ERP system, to undertake a major analytical assessment of all our internal applications and business processes in an effort to improve the entire process. It forced everyone’s hand, they couldn’t go back to the old systems.
When you are able to take a global organisation and, in real time, look at sales, items in transport, global warehouse stock — this allows you to forecast out your lead times. That stuff is real, it is not just relying on notes. It is all at your fingertips. Embracing the culture of the change is vital. What I find, however, is that everyone loves change unless it directly affects them.
Insightive.tv: Do you think that innovation can drive profit?
Stanton: Absolutely. Profit, for us, is quality. We lose money when things are returned. Having flawless technical services is essential to the businesses. But, I think, innovation from the leadership team is probably the game changer. We can create the innovative systems that allow the company to see which products are doing well and which need to be discontinued, but there has to be the will to follow through on that information. I think this is something we have at Howco and that is why we are reinvesting in technology and new products that bring defensible value.
From an IT perspective, we can do a whole bunch of things to make processes more profitable and quicker. We are close to finishing a project here in the Western Hemisphere that will allow us to go paperless — this is a big culture shock, but it takes filing processes that took twelve steps and reduces them to three. That makes things more profitable because it frees up time.
We have gone to great lengths to make everything electronic. One of our areas that required improvement is our document management. We have to retain an enormous amount of documentation due to the regulation pertaining to the oil and gas industry. Our document management system has turned into a repository for every document that has ever been printed, scanned or stamped. One of our future initiatives is to take all of that data, delineate it across what it is, and offer that backup information through a customer portal. This will allow self-service documentation to customers and create an easily searchable database for employees at Howco. Those types of cross-purpose innovation are key to making sure IT delivers its full potential.
Stanton Fraser is Head of IT at Howco. He has been in this position for over six years and has overseen a complete rehaul of the company’s internal workflow process through the adoption of new digital systems. With extensive knowledge of Howco, and experience innovating within IT, Stanton is helping to virtualize Howco’s analytical processes and change the way the company understands its customer demands. We spoke with Stanton to gain insight into how Howco is using digital technology to augment its manufacturing processes and the impact these changes are having on global manufacturing.
Howco is the largest independent provider of specialist material & manufacturing solutions for downhole, subsea and surface extraction systems used in the oil and gas industries. The products that Howco provide, can cover the entire length of the supply chain — a differentiation that has allowed Howco to develop a strategic hold on a section of the market. With over thirty years of experience, their developed supply chain partnerships have allowed the company to consistently respond to their global customer base with rapidly constructed and bespoke product solutions.
THE DIGITAL FUTURE OF MANUFACTURING series
Empowering the Perspective of
Manufacturing Leaders at the
Cutting Edge of Digital Innovation