Brady case study

C A S E
021
A
D I S S E C T I O N

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IN BRADY’S
MILWAUKEE PLANT,
ORA JONES INSPECTS
MICRO LABELS, USED
IN PACEMAKERS,
HEARING AIDS AND
OTHER MEDICAL
DEVICES.
The
Brady
Bunch
rewrites all its scripts

BY RANDY BARRETT AND DAN LUZADDER
Katherine Hudson likes to have good, clean fun. But
this was no situation comedy. After almost five years
on the job, she knew Brady Corporation needed to
focus on a complete overhaul of the way it made its
“high performance” labels and signs. And she would
need the best and brightest minds the Milwaukee
manufacturer could spare—or not—to make it happen.
P H O T O S B Y J O N L O W E N S T E I N / A U R O R A + Q U A N TA

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BRADY CORPORATION BASE CASE
Headquarters: 6555 W. Goodhope Rd., Milwaukee, Wis.
Phone: (414) 358-6600
Business: Manufactures, sells and distributes high-performance labels and industrial safety
signs, and other instructional or informational signage. It also creates custom labels for
telecommunications products including cell phones and computers, and provides software and
devices for printing and producing labels
Chief of Technologies: David Schroeder (also, chief financial officer)
Financials in 2001: $545.9 million in revenue, $27.5 million in net income,
net profit margin 8.4%
Challenge: Use digital technology to rework the company’s ordering, manufacturing, and
distribution systems to improve sales, customer service and cash flow; to incorporate the
Internet into both its internal and external operations to improve efficiency and spark innovation
BASELINE GOALS:
Increase revenue 15% a year
Improve net income 16% a year
More than triple the number of times inventory moves through production and distribution,
to 15 times a year
Conduct 50% of all transactions worldwide electronically by 2003
The chill blew in from Lake Michigan
onto the American Club in mid-February, 1999.
Skies were as gray as a business suit. At the posh
five-diamond resort an hour north of Milwaukee
in Kohler, Wis., the world-class golf links were
hard-frozen and desolate, covered in snow.
But inside its cozy auditorium and comfortable confer-
structure that had reached well beyond its practical limits.”
ence rooms, the heat was on. Nearly 100 top managers from
The conclusion: Brady would have to completely re-
Brady Corp.—one of Milwaukee’s oldest and most success-
design its business processes, to fit into a new, digital world
ful homegrown businesses—had gathered from around the
order where competitors could come from any part of the
globe to look coldly at their future.
globe and use the Internet to shave costs out of already
The group had been meeting every 18 months under the
low margins.
direction of chief executive officer Katherine Hudson for al-
Quick fixes would only allow Brady to maintain sales at
most five years. And they had been actively executing sweep-
around $500 million a year. The company’s information
ing changes at Brady.
technology, controlling everything from the printing of la-
Since the former Kodak instant photography chieftain
bels on its manufacturing lines to the disbursement of pay-
was named CEO in 1994, the old-line manufacturer of high-
checks, was riding on aging systems that could not
performance labels and industrial safety products had dou-
communicate with each other. That meant delays and un-
bled its workforce, topping 3,000 employees. Net sales
necessary expenses in filling orders; and, slow responses that
climbed from $260 million in 1994, to $479 million by mid-
hampered the company’s ability to introduce new, profitable
1999. Net income rose from $18.5 million to $39.6 million in
products, such as its Mondo Bondo line of “ultra-aggres-
the same period.
sive” labels that could stick to greasy machinery.
The company was investing in Asia and making acquisi-
This overhaul would have to lower costs and increase
tions in Latin America. Engineers were producing new waves
competitiveness, in a world that had sped up life even for a
of ultra-thin identification labels for handheld electronic
maker of labels and signs. If the company was to crack a bil-
devices; and, its engineers had come up with innovations
lion in sales around the world in the next five years, it had
such as an adhesive that leaves a pattern when removed, to
little choice but to reexamine all parts of its business.
help police identify stolen laptops.
“We really wanted to be sure that whatever we did, it was
Y 2002
But the change was only starting, the senior managers
business-led,” says David Schroeder, Brady’s chief financial
would realize, as they huddled to hear Hudson’s latest pitch.
officer. “We wanted not just a software project, but a busi-
In the next decade, growth would not come easily for Brady.
ness-led project for the whole company.”
The company, she maintained, might not even be able to
BASELINE MA
grow at all—unless it totally changed the way it operated.
VIRTUAL REBUILDING
3 4
The company was “stymied,” Hudson says, “by an infra-
Brady might be the leader in producing labels that actual-

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BEHIND THE LABEL MAKING A MARK—THAT STICKS
For most people, labels are inconsequential. They merely lurk
where each “unit” can be hand-peeled from a sheet and applied.
on furniture, cars or telephone cords. But for Brady Corp., they’re
Some are die-cast to raise embossed letters.
everything. They have qualities normal labels do not.
Brady also produces devices that print labels. These include
handheld machines that will spit out labels-to-order on the spot.
To Brady, they are “high performance’’ products.
They’re used, for example, by telecommunications workers who
Take Brady’s B-478-479 labels, one of the 50,000 items in its cat-
need to temporarily classify wires and cables in telecom closets.
alog. They include an adhesive that dissipates static. That makes
them useful in electronic devices, where electrical charges are
Today, the company’s labels are found in cell phones and
harmful. So you’ll find them attached to printed circuit boards
computers, and other sophisticated hardware. The company,
during manufacture, because they limit electrical charges to 50
which got its start manufacturing road signs, also makes signs
volts. They also can be useful after going through wave-soldering
and labels for hazardous-waste handlers.
baths as hot as 493 degrees. On the other end, labels and signs
For Seagate Technologies, Brady makes very small lightweight
affixed to pipelines in the Alaskan wilderness can withstand cold
labels that go on disk drives. For Bell telephone and other
of 50 degrees below zero—or more.
telecommunications companies, it prints identification markings
Then there are Brady’s “Mondo Bondo” labels, which include a
directly onto plastic sleeves. These numbers help technicians
glossy layer of white polyester, a second layer of permanently
sort through wiring in complex switching systems.
adhesive rubber and a third layer for thermal printing. The Mondo
It’s hardly a hometown business. Brady makes and distributes
Bondo labels adhere to oily, greasy pipes or highly textured sur-
its labels from 47 locations around the world, with 13 plants
faces, making them useful in industrial plants.
each in Asia and the United States, 12 in Europe, four in Latin
Other submersible devices have to withstand extremes of
America, two each in Australia and the United Kingdom, and one
pressure. Routine safety labeling must have adhesives strong
in Canada.
enough to withstand wear, jarring and abuse.
—R.B.
Brady’s safety signs don’t just identify exits. Some glow in
the dark. Some emit sounds. Some detect motions. They even
can deliver recorded instructions, such as directions to another
entrance or warnings about nearby hazards.
Simple can be good. Labels that identify parts in a child’s toy
are attached with a nontoxic adhesive, and are far less com-
plex than thin, multi-layer labels that go inside compact disc
INSIDE BRADY’S
players, computers and cell phones.
PLANT IN
But in manufacturing, none of this is child’s play. In a variety of
MILWAUKEE: Each
processes, labels are printed in ink on plastic and paper, are
burned onto heat-sensitive chemicals spread onto backing ma-
workstation is a
terials like aluminum, and are glued onto other materials that
miniature printing
customers require. Some labels are printed on sheets of paper,
plant; each type
of label is created
and completed at the
ly dissipate heat in electronic devices in some cases, and
same workstation.
laminate themselves in others. But the lack of communi-
cation between systems could hog-tie the company. Brady
officials worried that the Internet would bring a host of
new, smaller and faster competitors. In truth, the compa-
ny had bought most of the smaller U.S. label makers and
now only went head-to-head with Accuform Sign of St.
Petersburg, Fla. However, Brady wanted to be the leading
label provider in the world, not just North America.
foundations of the company. And the whole process needed
Its clientele, including such
to occur without a day of downtime.
growing global brands as abra-
The company allotted $30 million for consultants, train-
sive and adhesive distributor
ing, software and equipment. Not chump change for a com-
R.S. Hughes, maintenance sup-
pany of its size.
plies distributor W.W. Grainger
But the near-doubling of the company’s size since 1994 re-
and electrical and communica-
vealed the technological vulnerabilities of its 19 different ex-
tions equipment supplier Gray-
isting database, transaction and file-serving systems used in
bar Electric Co., would want a
Asia, Australia, Europe, the
ready source of supply as they
United Kingdom and the U.S., as
moved into Asian and Latin
well as the 10-year-old Pansophic
BRADY’S TWO
American markets.
MAIN LINES:
Resource Management System it
But transforming a conserva-
Safety labels
used to figure out how to operate.
tive manufacturing concern was
and identification
The platforms didn’t talk to
labels.
a major undertaking. The task:
each other. The company could
understanding and refashioning
not even tell what a single cus-
nearly 1,300-1,400 business pro-
tomer bought from all of Brady’s
cesses—from configuring dis-
different divisions, because each subsidiary had its own sales
counts to distributors, to unifying
tracking system.
price lists in different global juris-
Brady’s Seton Brazil plant in São Paulo, Brazil, didn’t nec-
Y 2002
dictions, to paying for raw materials, to processing orders
essarily know when Brady’s Imtec plant in Keene, N.H., was
over a Web site.
sending label application and lamination products to the
The ground-up overhaul meant examining how Brady’s
same multi-national corporation in the U.S. And customers
3,000 employees did their jobs, from the factory floor to
also were overwhelmed with a mélange of discounts, prices
BASELINE MA
marketing and management, a virtual rebuilding of the very
and inconsistencies such as multiple identification numbers
3 5

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C A S E
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D I S S E C T I O N
THE BRADY ROSTER
for the same products.
Katherine M. Hudson
Dave Gohlke
It became clear, Hudson says, “that we had to be much
President, CEO and
Eclipse launch director
more customer-focused than we are. And to be customer-
Director
Role: Gohlke kept all
Role: Hudson, formerly a vice
the processes running on
focused, we needed much more information about our
president at
time for each element of
customers.”
Kodak and CIO of
the company’s redesign.
its digital imaging
Prior to this post, he
The discussions at the American Club also would make
division, was re-
was director of knowledge
the company focus on its top line and bottom line. The rev-
cruited by Brady
management for Brady.
enue goal: 15% growth a year. The profit goal: better than
to become CEO in
Gohlke joined the company
1994. The board’s
in 1994.
that. And Brady would pursue such consistent double-digit
directives to her: improve
growth through five efforts: Process Improvement,
profitability and generate
David Hawke
Electronic Business, Market Driven Growth, Proprietary
growth. Her background
VP, Graphics Group
in digital technology at
Role: Hawke was a “co-con-
Products and Acquisitions.
Kodak played a role in
spirator” in evalu-
understanding the potential
ating, recom-
benefits of creating a digital
mending and
ECLIPSING CHANGE
backbone for the company’s
helping imple-
The foundation for the five thrusts would be digital infor-
global operations. She
ment the compa-
mation. But each would start with no preconceptions about
spearheaded the creation of
ny’s digital over-
the Eclipse initiative.
haul. Like Fisk,
how the company should operate. The clean-sheet approach
Hawke first came to Brady in
meant a serious examination of what the new company
Dave Schroeder
1979. He was appointed
should change into—and what information systems were re-
President, Brady
General Manager of the
Technologies
Industrial Products Division in
quired to get there.
CFO, Brady Corp.
1985. He also served as
The result was a project called Eclipse—a transforma-
Role: Schroeder is the exec-
Managing Director, European
utive sponsor of
Operations and took his cur-
tion-tinged acronym standing for Earning Customer Loyalty
the Eclipse proj-
rent post in March 1995.
through Integrated Processes and Systems Everywhere. The
ect team. He
Eclipse project would wind up affecting every employee and
joined Brady
Corp. in 1991 as
OUTSIDE PLAYERS
every customer the company had.
general manager
When company executives walked out of the meeting to
of its Industrial
Ray Bogart,
return to their jobs in the U.S. and overseas, the first and most
Products Division. He be-
Executive Consultant
came chief financial officer
IBM Global Services
important job was clear: educate key managers and employees
after serving for more than
Role: Led a team of 15 con-
on the importance and means of change. Prepare them.
five years as vice president
sultants who worked to inte-
for the Identification
grate Brady’s new process
Hudson says, “We linked arms and said, ‘OK if we’re
Solutions and Specialty
design with the proper SAP
going to do this, we have to do it according to best prac-
Tapes Group.
platform modules. He trained
tice, and we have to understand all this stuff, because we
Brady employees how to run
Richard (Dick) Fisk
the systems and then, as
can’t expect everybody else to follow us if we don’t under-
Senior VP, Strategic
Brady took the process in-
stand it.’”
Development
house, moved on.
Hudson’s team took courses, scheduled meetings and at-
Role: Fisk has been instru-
mental in creat-
Morton Arbe,
tended seminars. Among them were sessions with reengi-
ing and guiding
Executive Consultant
neering guru Dr. Michael Hammer at Enterprise Resource
the Eclipse team
IBM Global Services
from framing
Role: Worked to make
Planning. And it was there that the initial decisions became
the original
sure Brady’s reengineering
clear concerning the sweep of the organization that would
initiative to
of sales and distribution
be required.
rollout. He was
processes were made to
Vice President of the
work efficiently with existing
“In a lot of companies, there are a few people who get
Direct Marketing Group from
SAP software.
into it [digital reengineering], and the rest are spectators,’’
1987 until being named to
Hammer, who was coauthor of the business process redesign
his present position in
Cindy Kirchner
August last year. Before
Sr. Consultant
bible Reengineering the Corporation (HarperCollins, 1993),
1987, he served as
IBM Global Services
would later say. “At Brady, a larger fraction of the managers
General Manager of the
Role: The main liaison with
Seton Nape Plate Co., a
Brady’s logistics staff to try
really got into it. It wasn’t a handful trying to push it down
Brady subsidiary.
to transfer warehouse, man-
the throats of the rest.”
ufacturing and distribution
Turning heads around, as Hammer would put it, began in
Keith Kaczanowski,
tracking processes into SAP’s
VP, Business Process
means of managing logistics.
May 1999. Hudson and her executive team went after what
Development, Brady;
they felt would be the most creative leadership they could
Project leader,Eclipse
Andreas Trueck
find in the company.
Role: As project leader for
Consultant, SAP Practice
Eclipse, Kaczanowski drove
IBM Global Services
“We turned to our best and brightest,” Hudson says.
the redesigns of processes
Role: In effect, a technical
First on the list was Keith Kaczanowski, the vice pres-
and their integration with
accountant. Trueck worked
SAP software. Individual
with Brady’s accounting de-
ident of business process development. He had come to
process leaders reported to
partment to make sure its
Brady out of the University of Wisconsin as an account-
him. Prior to Eclipse,
methods of tracking costs
Y 2002
ant, and moved up
Kaczanowski managed
and transactions fell in line
PROJECT PLANNER
Brady’s Australian
with SAP’s controlling
through the company
operations.
module, which tracks costs.
IF YOU’RE OVERHAULING
ranks over 22 years. He
YOUR PROCESSES, BETTER
had experience in de-
OVERHAUL YOUR DATA FIRST.
To protect their privacy, roster members’ e-mail addresses are
BASELINE MA
omitted. Direct inquiries to BASELINE@ZIFFDAVIS.COM. Your mail will
OPEN THE FOLDOUT (RIGHT).
ploying the company’s
3 6
be forwarded.
Pansophic system, which

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HOW BRADY MEASURES PERFORMANCE
would give him a leg up on the
technology his team would even-
MEASURE
CURRENT GOAL
tually be reviewing.
Kaczanowski had broad experi-
Sales growth
-0.9%
15% a year
ence, most recently as general man-
Net income growth
-41.6%
16% a year
ager of the company’s operations
Operating expenses
$491.9 million
Cut 10% a year
in Australia. But he had another
qualification, in Hudson’s eyes. He
Sales conducted online
15%
50%
had a “wacky sense of humor.”
Inventory turns
5.0 times a year
15 times a year
That’s a plus at the once-staid
Days of sales outstanding
48 days
42 days
company. Hudson had worked con-
SOURCE: BRADY CORP.
sistently to get the company to
loosen up. Before her arrival, the
most revolutionary change at the company had been to allow
That effort—division managers relinquishing their best
employees to drink coffee at their desk. That tectonic shift
people for the indefinite future of the project—was one of
for the company, founded in 1914, occurred in 1989.
the hardest things to do, says Hudson. “If it didn’t hurt to
give up these people, then we probably were not getting the
right people for the project.”
Eventually, 35 individuals were handpicked to work on six
Eclipse groups: New Prod-
uct Development, Cus-
MICRO MINIATURE LABELS
tomer Value Creation
BRAND NAME: Custom
(order generation), Order
product
to Cash efficiency, Strategic
INTRODUCED: Mid-1980s
Planning, Finance and
Change Management.
Among the new leaders included were Chris McElfresh,
the global order-to-cash process leader; Maureen Casey,
global process leader for training; Elizabeth Belmonte,
global leader for customer value creation; and Linda Dean,
(ACTUAL SIZE)
global leader for new product development. Later, David
Gohlke joined the team as launch director, the guy in
charge of keeping Eclipse on schedule. He was previously
director of knowledge management for Brady. John Cullen,
process leader for customer and order acquisition, was
WHAT THEY DO: Micro labels are used in pace-
among the first picked—and the one who came up with
makers, hearing aids and other medical devices
the Eclipse acronym.
to identify parts.
WHAT’S UNIQUE: The legibility of print on their
They opened office space in Milwaukee, a few miles from
miniature sizes. The labels also may be printed
Brady’s headquarters, and set to work establishing some
on specialty materials, in order to withstand
clear-cut goals—most of them financial, and some of them
high temperatures. At the same time,
practical.
the labels cannot interfere with the operation of
For instance, converting orders to cash meant reducing
the medical device itself.
the number of days worth of sales that, on average, remained
to be collected to 42 days, from 54.
And sights would be set high. The company was only
On her first days on the job, Hudson wore a bright purple
“turning” inventory into sales every three months, or 4.39
business suit and matching purple running shoes as an anti-
times a year. “The team suggested that we double them from
dote to any gloom around her. She drives a 4x4 pickup truck
4 to 8,’’ says Hudson. “I said that wasn’t enough.’’ The com-
and a license plate that reads “YO”—a constant reminder of
pany settled on 15 turns a year—meaning anything that came
her effort to change the company’s culture from “no to yo.”
out of one of its plants would be turned into a sale in less
She’s not afraid to be photographed with her executive team
than a month.
posing with Groucho Marx glasses on. The point: Excelling
Among the toughest goals was conducting 50% of all
in making bar code products, die cut parts and identification
sales electronically by 2003. So far, only 15% of all the
systems of all types doesn’t have to be boring.
company’s sales are now conducted over the Web, the
company says.
ONLY THE BEST WILL DO
That 50%-online goal signals, though, how much Brady
Y 2002
But getting Eclipse off the ground would take no nonsense. In
wants to save money and improve operations through the
November, senior members of the business board were called
use of the Internet and information systems. The compa-
back to the American Club in Kohler, to formally launch the
ny also is expanding its use of the Net to help deal with
Eclipse project and to start its most important phase—pick-
suppliers more easily, to standardize processes through
BASELINE MA
ing the best process-change managers in the company.
its many divisions, to bring consistency to pricing and
4 1

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BRADY ATTEMPTS A COMPLETE OVERHAUL: THE IMPACT C a s e 0 2 1
98 99 00 01
July: Top executives decide
February: Brady executives
March: Brady acquires
January: Brady reports net
to revamp Brady's processes
meet at the American Club
Data Recognition Inc. and
income of $47M on sales of
August: Initial meeting with
in Kohler, Wis., to tackle
Imtec Inc. for $33 million
$551M for fiscal year 2000
the board of directors to
reengineering strategy
October: First Eclipse
February: Eclipse goes live
discuss reengineering
November: Key managers
switchover goes live at
in Belgium and U.K.
September: Executive team
meet for second time to
smaller divisions in U.S.
April: Data conversion
participates in seminars with
develop strategy
December: Remainder of
begins for rest of Europe
reengineering guru Michael
November: Project dubbed
Eclipse systems in the U.S.
Hammer
Eclipse
go live
BRADY HOPES TO GAIN FROM DIGITIZING ALL ITS PROCESSES—BUT HAS YET TO ENJOY THE RESULTS
SALES Sales were to grow 15% a year. They were picking up steam, until recession
$684M
intruded last year.
$650 M
BASELINE
211851364675232564851956357363544859326434563954653057
$546M
$550 M
211851364675232564851956357363544859
Actual
2118513646752325648519563573635448593264344511
$450 M
NET INCOME The company wanted to increase profits by 16% a year. That
bottom-line goal was being achieved—until last year.
$44M
$45 M
$40 M
$35 M
$30 M
2118513646752325648519563573635448593264345639546530657736756125436274579231521185136462118513646752325648519563573635448593264345639
$25 M
$27M
The company wants to turn its inventory over 15
INVENTORY TURNS
2118513
times a year. It’s still a long way from that goal.
BASELINE
Actual
9.29
7.86
6.43
5
64851
648519563
4.39
4.4
4.7
4.8
SOURCES: U.S. BUREAU OF CENSUS, OSRAM SYLVANIA, BASELINE ESTIMATES
211851364675
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2118513646752325
2118513646752325
Brady’s new processes are designed to cut down the number of days’ worth of its
DAYS OF SALES OUTSTANDING sales that are waiting to be collected and turned into cash in the bank.
54
55
54
53
52
49
48
47
648519563573635
64851956357363
648519563573
64851956357
Y 2002
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4 2
SOURCE: BRADY CORP.

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C A S E
0 2 1 A
D I S S E C T I O N
delivery times, and, critically, to find ways to encourage
just $250. Not bad, given they’re selling labels and signage; but
sales of different products to the same customer, from dif-
it meant they were selling to lots of customers in small volume.
ferent divisions.
Their new processes would centralize price lists, eliminate
the use of isolated computer systems and make prices available
FILLING GAPS
electronically. Many of these new “To Be” practices would be
In September 1999, Brady made the decision to use plan-
worked into the Sales and Distribution module of SAP.
ning and operations software from SAP as the platform
The goal was to customize SAP as little as possible, to
for the massive digitization effort. Kaczanowski says the
avoid additional expense and headaches, even in the heart of
company considered
what Brady calls its “cash conversion cycle.”
Baan and JD Edwards,
This is the process of moving a product from raw mate-
but finally chose SAP
rial, to production, to delivery, to paid invoice. Before
because of its long his-
tory in enterprise re-
source planning and
SAFETY TAG
its leadership in that
INTRODUCED: 1950s
WHAT IT DOES: Helps customers comply with
market.
regulatory standards and keep workplaces safe.
WHAT’S UNIQUE: Has to meet exactly all
For integration
standards for this type of product, as established
help, Brady tapped
by the Occupational Safety and Health
IBM Global Services,
Administration, including typography and color.
but there was never
any intention of keep-
ing consultants on
hand to run Eclipse in
Eclipse, the cycle was disjointed. Since its different infor-
perpetuity.
mation systems could not communicate with each other,
Kaczanowski made
data needed for billing couldn’t be drawn from manufactur-
sure the staff at IBM’s
ing and delivery systems. The result was missed orders, late
SAP practice, led in
orders and often the duplicated manufacturing of the same
Milwaukee by execu-
labels under different part numbers.
tive consultant Ray
The global process team focused diligently on how to con-
Bogart, trained Brady
vert orders into cash and streamlined the process into six phas-
personnel to the point
where the company
could run the SAP
platform by itself.
W H O ’ S
Today, the company
runs Eclipse in-house on four IBM AS400 machines.
Figuring out how the company’s processes would fit into
NUMBER 1
SAP’s building-block approach to companywide software
would take 15 “fit-gap” workshops across the company. To
stay on track, the Eclipse team gave the workshops a five-
IN LINUX®
week time limit.
Here’s how they worked:
Individuals from the company’s divisions were picked as
W O R L D W I D E ?
“subject matter experts,’’ whether on how to cut signs or ap-
ply new layers of adhesives. They would be brought to work-
shops in Milwaukee where the Eclipse team would spend a
week examining the business processes, and break each
down into its component parts.
In the first two days, the experts would diagram each
process, with large sheets of paper taped to the walls.
“We would look at the sequential activities, going
horizontally, and then, vertically, we would identify their
roles in the businesses,” Cullen recalls.
From there, they began designing the new processes,
bringing in consultants from IBM Global who were spe-
cialists on SAP.
In examining the sales and marketing process, several things
quickly became apparent about pricing to Brady’s distributors:
Brady was remarkably inefficient in handling orders, with lit-
tle consistency in methods across divisions and too many in-
formation handoffs. Brady also found its average order size was

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es: order management, plan, source, make, repair, and move.
Kaczanowski
pushed his senior
ASSET IDENTIFICATION
team to ignore in-
TAGS
formation systems
WHAT THEY DO:
Identify business
BRAND NAME:
and bear down on
equipment.
Duragard
the actual process-
WHAT’S UNIQUE: Barcoded
INTRODUCED: 1990s
es involved in
versions can be scanned so
making a Brady la-
information about the product
bel. Unifying
can be updated, without
processes for SAP
changing the label. May also
had a simplifying
leave tamper-evident residue
effect, cutting out
to deter theft and identify
steps—and phone
the owner.
calls, since sales
reps didn’t have to
call factories to get
answers for customers. They were simply on screen.
And that made more than a few line managers unhappy.
They were being told to scrap decades of work habits in fa-
HABIT REFORMING
vor of a common, shared system of operating.
In fact, Brady’s mantra became “vanilla is a good flavor,”
“Common and shared is good as long as it’s mine that
says Kaczanowski.
gets shared” was the mood, recalls Linda Dean, global
process manager for new product development.
211851364675232564851956357363544859326434563954653065773675612543627457923151
But habits had to die. In the old system, users asked any
question they wanted about orders and the stage of manu-
facturing and distribution they were in. The custom queries
BASE TECHNOLOGIES
often jammed the system. Under new processes, standard-
ized responses are generated on queries about orders.
Manufacturing Engineer Mike Sweeney found the new SAP
Brady Corp. decided it
software an overall improvement, but not as precise as the old
needed a complete digital
software. According to Sweeney, SAP is set up to calculate all
overhaul. So it replaced a
costs based on a single unit. But since Brady’s products—la-
bels—can be very low cost, that can cause a problem. If the unit
10-year-old Pansophic
of cost turns out to be less than 1 cent, the reported cost be-
resource management
comes zero. To fix the problem, Brady now multiplies its cost
system with a series of
by 1000 units, which forces all costs above a penny.
Forecasting the number of labels, signs and other prod-
software modules from
ucts that must be manufactured also was difficult, because
SAP; and adapted its
Brady’s executives and managers were not used to the rigor
of planning for demand.
processes to conform.
“I don’t know that we put enough study into reporting
issues,” Sweeney says. “There was a lot of figuring about
Software
Product
Vendor
what went in [but not what came out].” Only now is the
Financial reporting
R/3 Finance
SAP
company getting used to planning its production through
the SAP system.
Cost accounting
R/3 Controlling
SAP
The order-process management team ended up with too
Materials control
R/3 Material Management
SAP
much new information. The SAP platform deluged customer
Production
R/3 Production Planning
SAP
representatives with hitherto unfamiliar data as purchase
order histories, raw materials schedules and accounting fig-
Quality assurance
R/3 Quality Management
SAP
ures. Brady responded by training employees to know where
Marketing
R/3 Sales and Distribution
SAP
to find information and creating shortcuts to find impor-
tant answers, such as the current status of an order.
Data intelligence
R/3 Business Warehouse
SAP
A key goal was to ensure that 60% of pricing and prod-
Hardware
uct questions could be answered on a customer’s first call.
Previously, it could take up to a week to quote a price. That’s
Terminal server
Citrix MetaFrame v. 1.8
Citrix
Y 2002
because sales reps relied mainly on hardcopy charts and ta-
Database server
DB2/400
IBM
bles. Often, potential orders had to be walked around to dif-
ferent offices to complete quotes.
Data Processing
AS400
IBM
and Storage
“It left room for a lot of error,” says Pam Schirm, process
BASELINE MA
owner for contact and payment. “We didn’t have an entire
SOURCE: BRADY CORP.
4 4
view of the customer and there were no smooth handoffs.”

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2118513646752325648519563573635448593264345639546530657736756125436274579231576922118513646752325648519563573635448593264345639546530657736756125436274579231571
GOTCHA! WHERE THE PROCESS OF CHANGING PROCESSES FAILS
workforce. Not so. After a bumpy first launch, it became clear
Did you know that:
that many employees were taking short cuts with data entry, or
ignoring chunks of the new processes altogether. Most Brady
?Picking the wrong parties to carry the
employees received about 60 days of training prior to the first
new-process message leads to poor-quality
launch. It was too little, too late.
implementation
“We didn’t engage early enough,” says Chris McElfresh,
Brady spent much time reworking business processes with
order-to-cash process leader. “SAP requires quite a bit more
upper and middle management, but in some cases the wrong
discipline than they’re used to.”
“subject-matter expert” was chosen to work it through on the
The result was a nasty domino effect, where if one piece
front lines. Make sure the person has full decision-making power
of data was left out, workers all the way along the line couldn’t
over the process in question, enough time to change things and
do their jobs. Brady went back to the line workers and retrained
the right knowledge. One particular subject expert in Brady’s fin-
them, with particular emphasis on how their own data impact-
ished product and shipping area got overwhelmed with her new
ed the rest of the system.
duties and fell behind in her regular work. The result: Packages
didn’t get shipped to customers.
The answer: Brady carved out part of her process-changing job
?Data cleanliness
is next to godliness
and gave it to someone else.
True to its Teutonic roots, SAP wants data neat, clean and
buttoned-down. This issue came into high relief in the first
?Timing
“go-live,” when the software used to track data delivery-times
is everything
was filled with inaccurate information by production workers. For
Brady cut it too close in converting data and was in deep water
instance, some data was put in that stated a particular label was
because of it during the first Eclipse rollout in 2000. Master data
in stock when it was not. A rep would promise delivery within
conversion was completed at the last minute, as was the auto-
48 hours and the order wouldn’t show up for three weeks.
mated sales software called a Variant Configurator. The rush re-
The answer? More intensive training emphasizing the impor-
sulted in incorrect formulas that led to some erroneous pricing
tance of data accuracy. Otherwise, a massive amount of new
of parts of the Brady product line.
code must be written to stem all individuals’ attempts to do end-
For its second rollout, Brady took the problem to heart and
arounds on the system.
created a replica of its production system seven months prior to
launch and populated it with a complete set of master data, well
in advance of cutover. It also updated its cost data three weeks
?High backlogs
are hell
prior to going live and double-checked its pricing in the Variant
The first Eclipse launch was marred by a performance dip—back-
Configurator. The result was a smooth flow of products through
logs went up 25% and on-time shipping dropped to 80% from a
the manufacturing and distribution process.
norm of 95%, compounded by high backlogs in production, order
management and quoting.
?Successful process change =
Brady disciplined itself to make sure all orders were picked,
Training, Training, Training
packed and shipped before the lights went out. That meant
Massive change isn’t easy, and Brady thought it had done
many Brady employees worked weekends for the first 60 days
enough training to drive home the importance of Eclipse to its
after the launch to get things back in order.
—R.B.
So Brady redesigned its pricing to distributors. A uniform
system of price breaks was created. Minimum orders were
eliminated. A customer can now buy one single Brady label,
W H O H A S
but it will cost $19.82. A thousand will cost 79 cents each.
And the SAP Sales and Distribution module locks the new
policies throughout the production process.
2 000 LINUX
By preloading SAP’s Variant Configurator with product
and pricing information, sales reps could develop prices on
the fly. Reps input information on type of tag, material de-
SPECIALISTS
sired, size, color and layout, and the Configurator automat-
ically gives a quote.
Brady also fired up SAP’s Available to Promise (ATP)
O N
platform, which allows customer reps to see where a prod-
uct is in the manufacturing or warehousing process and how
THE GROUND?
long it will take to ship.
The improvements are working, Belmonte says. Brady
now provides more than 60% of its quotes on the first call,
and is shooting for 90%.
But getting there hasn’t been easy. Sales reps had two new
software systems to learn and the curve was steep.
“There was a ‘this isn’t my job’ mentality,” says Belmonte.
“It has taken a year to 18 months to get to the point where
they are now comfortable.”
Jenny Pody, customer-service team leader, agrees and says
the learning curve was steep: “It was really hard to get used
to.” SAP required phone number verification, e-mail ad-
dresses and other data—things the reps had not had to think
about before.
www.compaq.com/linux1
Reps struggled with screens that were crammed with
new quoting, ordering and tracking information, much of

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