Royal Technologies Case Study
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Andrew CampbellBUS 656 Royal Technologies Case Study Royal Technologies is a 28-year-old plastics manufacturing company focusing on injection molding, and polyurethane foam production. Royal Technologies has been using has been using Syteline a Material and Resource Planning System (MRP) since 1996 (Williams 2017). The Syteline system is primarily responsible for accepting customer orders, determining resources needed, scheduling the manufacturing jobs, tracking both material and finished goods inventory, label printing and shipping, along with invoicing. This system is based on a progress database which uses 4GL programing language. Since 1996 this system has received many updates in 2002 Royal Technologies bought the rights to the source code allowing them to make significant customizations to electronic ordering and adjusting the base code to accommodate multiple regions due to the expansion to plants in both Alabama and Texas to name a few. These numerous customizations lead to redundancies and information having to be entered multiple times. By 2005 many different areas of the company began to complain about the system and difficulties in navigating and information extraction. Now, Royal could not invest in a new system so their development team over the last 10 years has created over 59 custom web based applications that interact with Syteline data. By 2006 so many customizations had been made Royal ended their support relationship with Infor and purchased their support directly from Progress. Currently the Progress database and Infor source code are weakening and Royal has already had to pay $50,000 in a legal dispute (Williams 2017). Finding talent needed to maintain and grow the current system is difficult only five people who understand the complexities of the current system per CIO French. There are also customer demands in tracking the progress of projects and competitors are starting to list their newer MRP systems as a competitive advantage. So, Royal has three basic options do nothing, re-platform, or purchase a new MRP/ERP system. If Royal does nothing 10 years from now IT; will need to employ more people to enter data, drive more inefficiency than efficiency, and competitors will be more efficient with fewer people (Williams 2017). Doing nothing is not a viable option.
Re-platforming would be a possible option however the small staff would not be able to do it without bringing in more people or outsourcing it to a third party. This would also be a very time intensive project however it would have the benefit of being built by Royal for Royal so there would be functionality that would likely be missing from an out of the box MRP system. Buying an MRP system eliminates the strain on the staff however more retraining would likely be required and would likely have extra capabilities. There are many factors to consider when deciding between these two options, at the top of the list is cost both upfront and overtime, since Royal is employee owned. Since the current system is approaching obsolescence the time it would take to roll out the new system is also a key factor. Lastly to sustainability of the new MRP over time is also important as Royal will not want to revisit this again soon. I believe that the best option for Royal is to buy an existing MRP/ERP system out of the box and slowly roll it out over a few months to a year. Although this would be more expensive up front that opting for a rewrite it would avoid overburdening or requiring new staff to be brought on, which accounting for the cost of benefits and salaries for even 2 mid-level employees could cost hundreds of thousands of dollars. Another advantage to a SAP level system would be the systems ability to keep up with the growth Royal has shown over the last decade. Large systems also have an advantage over a rewrite since the talent pool for potential employees is vastly larger. With classes and certifications in most large ERP systems available the current issue facing Royal with only 5 people in the world knowing how to operate their MRP system would be a thing of the past (Williams 2017). Another advantage to purchasing a system out of the box is the provider would be able to support the system externally rather than having to have only internal support. If a rewrite was decided on and it was done externally by a third-party Royal would have to pay these support costs either way.