Haceb optimizes white goods manufacturing and distribution

Customer Story

To deal with competition from abroad, Colombian company Haceb chose to capitalize on its proximity to the customers. Collaboration with IBS gave the company the tool it needed to do so.

With its slogan “con el mejor servicio” (with the best service) Colombian household appliances manufacturer Haceb affirms its intention to remain close to its customers and find strength in optimizing customer relations. In a highly competitive industry, where major international players have entered the fray for market share, Haceb is still the leading white goods manufacturer in Colombia and is battling for a top position in sales of stoves, refrigerators, washing machines and water heaters.

“It was a matter of survival, though we didn’t realize we’d be engaged in a price war with multinational giants or compete with new models and technologies,” says Dario Valencia Echeverri, Haceb’s CEO. “We were forced to find a way to stand out among tough competition, and we did this by offering the best service and by being available to the customer in every situation.”

The pace is high in Haceb’s recently renovated factory in Copacabana, in the province of Antioquia. The company has 2,100 employees and this year’s sales will end up at about 108 million U.S. dollars. The small electrical service center that repaired household appliances in the mid-1940s has evolved into a large healthy company.

Haceb has established itself on the global market as a regional player that manufactures household appliances for other brands and also imports and launches others’ products through its sales organization. Venezuela, Mexico, Ecuador, and the countries in Central America are established export markets that account for about 20 percent of the company’s sales.

Strategic choice

Haceb chose IBS as a strategic partner in 2001. IBS enterprise resource planning system has been the cornerstone of Haceb’s strategy to capitalize on the benefits of proximity to the customer. And Echeverri makes no secret of this fact. “I can’t give you any figures or percentages. But let me say this: we’d never have been able to carry out our strategies without an ERP tool. In other words, we wouldn’t have been able to defend our leading position without IBS ERP software.”

Today Haceb uses the IBS ERP system to control and monitor all processes, from production and inventory management to shipping and customer service. And to optimize production the company’s suppliers are linked to the system.

“Getting an immediate and true picture of all aspects of our business is essential for success. The margins are shrinking. We have to be able to adapt and fine-tune all processes, whether this involves production, logistics, or sales,” says Echeverri.

Demand driven manufacturing software

The IBS demand driven manufacturing software has had a major impact on Haceb’s business because it is based on customer orders already in the system, rather than on forecasts, and emphasizes cost reductions through low inventory and shorter lead-times. In other words, manufacturing plans and operations are driven by signals of customer demand. In previous manufacturing models, product was 'pushed' by suppliers to customers, based on forecasts that used historical sales data. In order to lower costs and maintain profitability, manufacturers like Haceb must lower inventory and optimize production, letting customer demand determine the process.

Planning, not forecasting

Demand-driven manufacturing does not mean that inventory information and planning play reduced roles. To the contrary: it is more crucial than ever for manufacturers to have a clear picture of the supply chain in order to reduce lead-times and costs. Instead of traditional forecasting under APS and MRP systems, which by its nature contains inaccuracies, demand-driven manufacturing relies on planning, simulation and reporting based on real-time information.

IBS manufacturing software has provided Haceb with planning and simulation tools to ensure success for demand-driven manufacturing as well as automated processes and communications that can ensure both maximum throughput and supply chain visibility. Demand-driven manufacturing must be collaborative, requiring planning and processes that are based on the communication of information between Haceb’s internal departments and among manufacturers, suppliers and customers. Haceb now sees real-time visibility of workloads, capacity and the supply chain, resulting in accurate data for production planning.

Fast delivery

With the current trend to streamline organizations and cut fixed costs, customers have almost stopped keeping goods in stock – a trend that increases pressure on suppliers. Big customers that used to place orders based on forecasts every three months now work almost in real time. “We have to be able to fill their stores essentially as they make their sales, and deliver in 24 hours. When demand governs delivery and production with such short notice, you must have full control over processes,” says Echeverri. “We’ve been extremely successful in our efforts to make the right delivery – not just on time, but correct in every regard. We offer flexibility and can take advantage of our knowledge and proximity to the market.”

Haceb’s customers in Colombia include major chains such as Almacenes Éxito, Carrefour, and Makro, which account for a growing share of orders. Traditionally, however, Haceb has many local players in retail sales that sell the company’s products throughout the country and are building blocks for Haceb’s brand and national presence.

IBS ERP software handles 650 customer locations, 200 daily orders, and has about 100 users continuously logged in.

Since Haceb implemented IBS ERP software no major upgrades have been needed, and the scalability remains untested despite increased volumes and number of orders.

“The challenge is to see how IBS and the ERP system monitors our growth and meets our needs,” says Echeverri. Haceb and IBS both face tough competition, but the key to success lies in collaboration.

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