How to Get There Safely From the Beginning:
Remcan Projects Ltd. is a multi-million dollar company that started from humble beginnings in one family’s basement. The vision was simple – provide quality maintenance, civil construction and emergency response to the rail industry. Their target was the Pacific Northwest, and in four short years the company mushroomed from eight employees to in excess of 200 employees across North America.
It’s a success story any organization would wish for. But managing growth comes with its own unique challenges. And when you’re building, it’s hard to see the pitfalls, and harder still to stop the train of progress.
In this series of articles, Software ThinkTank reveals what Remcan goes through as they realize something needs to change, and starts taking the steps required to get ’er done.
Real people. Real problems. Real solutions.
Here’s Part 1: The Need
“And all for the want of a horseshoe nail”
~ British children’s nursery rhyme
The railway doesn’t wait for anyone, and today Bob can’t believe a tiny, cheap part could make or break this one critical job.
Like always, Bob is out with the field crew in the middle of nowhere, on a large-scale rail repair job. CN and CP Rail have already set aside a window in their schedule so the work can be done. No one factored in time for a missing part.
Bob looks at his watch. It’s 4 p.m. If this doesn’t get fixed soon, there’s going to be hell to pay.
The Battle Against Time
Bob is a worker with Remcan, based on the Pacific Coast.
The company has established itself as the go-to team for routine repairs and even salvage and restoration following train derailments. It’s a pressure-cooker, with crews often working 10- to 12-hour days, all the while knowing time is ticking until the next train barrels down the track.
Whatever happens, Bob doesn’t want to be the one to make that call – telling the railway to hold the trains off. The cost to Remcan, in money and reputation, would be horrendous.
Bob hops into his truck and rushes into town. Acklands will be closed in 20 minutes and even worse – it’s Friday. He doesn’t have a company card, just his own personal credit card. He hopes that will do. When he arrives, he hands his card over and everything looks good. But then comes the kicker.
“Trouble is, we don’t have it in this location,” the sales clerk tells him. “We could fly it in, but we’re going to need you to pay for that in advance.”
Bob gulps. And there’s another problem. It’s going to take 24-hours for the part to arrive. There’s no choice but to call head office for approval.
Six weeks later, the paperwork lands on John Thwaites’ desk with the thump. Thwaites is Remcan’s chief financial officer. He looks over the bill, shakes his head, and exhales. A $26 part has just cost the company $1,000 in change. That’s the third time something like this has happened in the last month.
“I’m a grumpy old guy when this happens,” says Thwaites. “This isn’t acceptable. We gotta make these changes.” Thwaites says he understands these things happen, but it’s costing them money all the way down the line.
“Maybe somebody lost the spares, or no one counted them properly,” Thwaites explains. “And then you’ve only got a 24-hour window between trains so you’ve got to get the job done. CN raises hell because it impacts their logistics managements. They’ve opened a window for us to do a job and for some reason some of our specialized tooling went missing. So we thought we had four, we only had three, and then we have to send someone out to get it. It all leads back to us getting accurate data for job management, inventory control and final job costing.”
Manual Processes Drive Surprise Costs
And there are more problems. Because Remcan doesn’t have real-time order billing set up with Acklands and other suppliers, it takes time for these last-minute items to work their way through the system.
“So at the end of the job, I’m left wondering: why are the costs so high? And I have to look for these kinds of details to get the answer – and that can take a month because everything is manual. When we find out late, we’re spending more in cost investigating. So now we have a lower margin on the job. It’s incredibly frustrating.”
Then Thwaites starts asking the million-dollar question – will the railway even cover the costs associated with getting that missing part?
“In these situations, the project could get delayed, or we can get the job done and dodge the bullet. But we still have this extraordinary cost that’s got to wind itself through the system. And the truth is, the railway might not pay for it.”
Wanted: Timely Results, Quicker Collections, Informed Decisions
Cash-flow management is critical. With everything being tracked manually, it takes time to get all the hours of work compiled and approved by both Remcan supervisors and the customer. By the time all the approvals are in place, 12 weeks could have passed since Remcan’s excavator first hit the job site.
And in the office, the paperwork is getting unmanageable. Staff maintain both hard and soft copies of their work, but also a lot of information is in their head. Some of the staff work part-time, which means when Thwaites wants to access that info, it’s literally not there. Meanwhile, the money meter keeps ticking away.
“Fortunately, we’re very strong financially, but that doesn’t make it right,” he says. “We’ve got all these disconnects. No matter how hard you try, people get sick, employees take holidays, people make mistakes, and all these delays create bottlenecks and backlog. What we want is to see the results in a timely basis, collect our cash faster, and be able to make better-informed decisions.”
Seeking a Solution
As frustration mounts, Thwaites approaches the president about putting in a system that would bring some semblance of order into their world. They can’t spend another fiscal year letting money leak out like a slow drip. It’s time to plug the hole.
“I said to Jason Thomas, that we have to get on with this, and he agrees 100%,” says Thwaites. “The thing is, we’re not equipped intellectually, or with the business experience, to source a new MRP or ERP system. It’s not a good use of our time. So, we’re going to go to a consultant we know and see what the solutions can be.”
There Has to Be a Better Way
Thwaites clicks through his contact list and pulls up the name of a company that helped create their website: Technical Edge, which also specializes in service management, and in particular, standardized Project Methology – particularly important for companies like Remcan as they take on larger and more complex projects.
“I told them we need to have more robust systems where we have better inventory control sign-off for when employees take out tools and return them. We’ve grown so quickly, our systems haven’t kept pace.”
Thwaites also reveals he has a bit of a wish list. Pouring over grease-stained credit card slips has lost its appeal, and he’s thinking there must be some kind of technology out there that could send information directly from the field to his inbox.
“Is there not some barcode or wand that the crew member could wave over the product and send the information back to head office on a wireless basis? What I want is to be able to track and accumulate data in real-time, or at least something close to real-time. Or maybe a superintendent can enter the information onto his laptop at night and we can pick it up at head office the next morning. We really need to connect head office admin management functions to in the field management functions. We need time management for certain jobs.”
Cost-Effective Solution a Must
And then there’s another thing: the cost. While the company is successful, spending money on systems is seen as a revenue drain. It has to be cost-effective if he’s going to sell the idea to the other Remcan executives.
“I’ve done the install of ERP before and there’s no upper limit on what you can spend. You’ve got to spend some time on the metrics – and set the parameters, the deliverables you’re looking for. There are all these challenges, right down to migrating from the old system to the new. All of us want plug and play. We’ll see how close we can get to having that.”
Thwaites sets up a meeting, with no commitment so far, but at least he’s gathering steam.
Will Remcan find the right solution fit for their needs? Walk through the selection process with them next Thursday in Part 2 of The Need, The Selection, The Implementation: How to Get There Safely From the Beginning.