City Theatrical (CTI) is a world leader in the design, development and manufacture of theatrical and event lighting. The company was an early innovator in wireless DMX and is the winner of three LDI product awards. DMX is a communication protocol that is used in the entertainment industry worldwide to operate lighting and other equipment. In 2008 CTI was granted a US patent covering some elements of wireless DMX. As the field has grown this patent has also grown in importance. In addition to its US operation, CTI operates a London company, City Theatrical Ltd.
As a result of its innovative products and excellent service, CTI needed more space and better systems to support its growth. The company initiated a very ambitious plan. It moved from 10,000 sq ft in the Bronx to a 40,000 sq ft facility in Carlstadt, NJ—R&D and sales at least doubled in size and manufacturing increased four fold. The additional space allowed CTI to add a powder coating line, a second Amada CNC punch press, a 100 ton stamping press, and a robotic surface mount circuit board manufacturing system. They also went from no loading dock to six loading docks, no parking lot to plenty of parking, and no windows to bright, airy spaces in all areas including the factory. The move marked a real transition and solidified the company’s ability to grow without constraints.
CTI’s plan had been to move to a new facility, then to upgrade and unify its computer systems. The computer operating systems consisted of 12 separate databases for various functions such as inventory, purchasing, sales, RMA, finance, CRM, ECO, and product development. Most of these databases could be seen by only one or two of their staff members at a time. CTI wanted to implement Enterprise Resource Planning (ERP), a computer system that organizations use to manage their business processes. This type of system is often selected when a company has multiple facilities, in this case, CTI’s London sales office. The new system would improve efficiencies and provide better information management, in short, streamline its operations.
Implementing an ERP would be a large, time consuming, difficult and expensive task that CTI was not exactly sure how to approach. They needed help in identifying its actual needs, the most appropriate software for the company and training its employees in the operation of the new system.
Enter NJMEP and Dave Hollinger, an NJMEP resource and ERP specialist. CTI contacted NJMEP because, when located in NY, they had a great working relationship with NYC ITAC (the NY MEP branch) and wanted to continue that type of relationship with the New Jersey equivalent. CTI asked NJMEP to do an assessment of the old systems and to advise them as to what they needed to do in order to move forward implementing an ERP
After learning about CTI’s goals and objectives, NJMEP created a plan to implement the new system.
Current data needed to be prepared for transferring to the new system and then to identify the system requirements and vendors (five vendors were initially identified by Holliger and narrowed down to a short list of two). These finalists were brought for interviews and product demonstration enabling CTI to identify the most appropriate vendor.) New hardware would have to be purchased and the ERP software loaded. Managers from each department would be trained on the ERP software (they would be responsible for entering data into the system). Departments involved in this included accounting, manufacturing, sales and purchasing, parts and vendors.
“The plan helped us to see the path ahead. In fact, NJMEP consultant Dave Hollinger showed us the path so clearly that it gave us the confidence to move forward and we put “Implement an ERP system by the end of 2009” on our list of 2009 goals,” explained CTI President, Gary Fails.
Implementing one of the lower cost ERP systems that are now being marketed to smaller small companies sets up many new challenges. Generally there is no one within the company with ERP experience and much of the data isn’t ready to be transferred to ERP. Preparation is a lengthy process. CTI worked on preparing its bills of materials, routings, and process documentation in preparation for the new system from mid 2008 to the end of 2009.
CTI’s created a small implementation team that spent the first half of 2009 interviewing the short list of ERP providers, learning about differences between the systems and debating their merits. In mid 2009 the vendor was selected and CTI began to move forward on the implementation. The time commitment was extremely difficult for everyone involved as the transition was being done in the midst of its regular busy daily routine. As the go live date of 1/1/2010 approached, it became a seven-day a week project for the final three months.
At the eleventh hour the team very vigorously debated whether they were ready to go live and although they realized they were not completely ready, decided to proceed as planned.
Implementing the ERP has had a positive impact on the company. Everyone sees the same data, sales sees manufacturing schedules and manufacturing sees sales orders, which was all hidden in the past. Previously people lined up in front of a few data entry points, now anyone can access the system at any time,
Many tasks such as quoting orders to customers are much easier and more professional now. “Implementing ERP has forced us to codify many of the processes which were previously poorly defined. Since we have huge amounts of data now that was previously not measured we can better understand the elements that affect our profitability,” reports Fails.
Entertainment lighting is time sensitive and if a company can’t fill an order quickly, the sale is often lost. CTI has always been known for its extraordinary turnaround time and customer service. Implementing a project of this scale is not all smooth sailing Fails noted, “If anything, during our ramp-up time we had more stock outages as we have worked to understand how to operate the new system. Some things that we previously did not do at all (recording labor times or “issuing” material from inventory to jobs) now require time and effort.”
One unexpected positive outcome of ERP has been the full integration of CTI’s London company. The CTI ERP system had to be “multi location and multi currency” to support its London office. “A few months after we went live in NJ, we launched CTL’s ERP and suddenly realized that we could run much of that company from NJ. We could monitor their sales and inventory, perform their accounting, bill payments and invoicing, and perform a very strong oversight function from here. This gave us the confidence to expand London into a fully functioning business taking orders, stocking inventory, with enough autonomy to be closely attuned with the European market (we have two British employees in that office) but with strong guidance and control from our NJ office. ERP gave us the ability to move forward there and the office has the potential to become the fastest growing part of our business. We also utilize Skype to video conference throughout the day, including our daily morning meeting and our monthly full company meeting in which our London team presents their goals and results to the full company,” explains Fails.
“The ERP implementation and training helped us improve our efficiency and lower our costs by reducing labor costs and errors. Having an integrated operating system has saved us approximately $75,000. We now have the information we need to make better decisions and the improvement in efficiencies has made us more competitive and allowed CTI to retain $200,000 in sales,” reports Fails. The real benefit of the new system is still to unfold as CTI’s international presence grows as a result of the full integration of the London office.
CTI is currently in the process of training additional employees in data entry. This will help ease the time constraints of the managers in sales and manufacturing. The company, which has 30 employees and sales of about $6 million, with its additional space has been able to make an investment in some new manufacturing technology that has lowered its production costs. CTI’s new facility with ERP system and new manufacturing technologies assures the company that it will remain a world leader in the design, development and manufacture of theatrical and event lighting.
City Theatrical is a participant in NJMEP’s Made in New Jersey program. Click here to view their profile!