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Ophir Optronics: Optics Manufacturer Sets Sights on Leaner Manufacturing with SAP ERP

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Quality is a core value for Ophir Optronics Ltd. With its products used in a range of …

Quality is a core value for Ophir Optronics Ltd. With its products used in a range of
precision applications, accuracy is key. But in a competitive industry, offering attractive
prices to customers is also an important priority. SAP® software deployed extensively
across a rapidly growing business helps the company offer the best quality at the best
price. Says CIO Gil Cohen, “Thanks to improved operational efficiency, supported by
SAP solutions, we are now a major player in the market.”

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  • 1. SAP Customer Success Story | High Tech | Ophir OptronicsOphir Optronics: OpticsManufacturer Sets Sights on LeanerManufacturing with SAP® ERP
  • 2. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Company Ophir Optronics Ltd.Company Industry High tech – OpticsVision Products and ServicesWhy SAP Precision infrared optics, laser measurement instrumentation, and 3-D noncontact measurement equipmentImplementation Web SiteSolution www.ophiropt.com SAP® SolutionsBenefits SAP® ERP applicationFuture plans Quality is a core value for Ophir Optronics Ltd. With its products used in a range of precision applications, accuracy is key. But in a competitive industry, offering attractive prices to customers is also an important priority. SAP® software deployed extensively across a rapidly growing business helps the company offer the best quality at the best price. Says CIO Gil Cohen, “Thanks to improved operational efficiency, supported by SAP solutions, we are now a major player in the market.” 2
  • 3. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Growing from strength to strengthCompanyVision Established in 1976, Ophir Optronics develops, manu- Ophir Optronics has grown steadily with revenue factures, and sells products for the electro-optic market, showing an impressive increase of over 200% inWhy SAP including precision infrared optics, laser measurement the last five years – rising from US$45 million to instrumentation, and 3-D noncontact measurement $108 million. The company’s strong market positionImplementation equipment. Applying the most advanced technologies has been further enhanced by its recent acquisition in its production processes, the company is renowned by U.S. precision component manufacturer, Newport for quality and reliability. Corporation. The merger is currently in progress.Solution The company runs three production plants in Israel 200%Benefits and three in the United States, employing 856 people in total. As well as working with a network of interna- tional distributors, over 80% of sales are made directlyFuture plans to overseas customers across a range of industries, Revenue increase from including defense, healthcare, and industrial machinery 2005 to 2010 and components. 3
  • 4. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Providing world-leading qualityCompany at a competitive priceVision To stay competitive in a crowded market, To run more efficient operations, the company needed Ophir Optronics wanted to drive down customer pric- to achieve two objectives. First, it had to replace theWhy SAP ing without compromising the company’s reputation company’s Hebrew-language process management for reliability. “We knew we needed to work smarter – software with a global solution that would connectImplementation with leaner processes across the organization,” says all eight sites – in Israel and the United States – on a Cohen. “In this way, we could reduce production costs single unified platform. Second, it required a compre- while maintaining – and improving – process quality hensive enterprise resource planning (ERP) solutionSolution throughout the company. We could then pass these that would support process workflows across the savings on to our customers.” rapidly expanding organization and provide visibilityBenefits of any problem areas. This would enable managers to identify issues quickly and make necessary changes to improve process quality.Future plans “By reducing deviations in our processes, we could manufacture our products in a more efficient and cost-effective way. Ultimately, this would allow us to drive down our pricing.” Gil Cohen, CIO, Ophir Optronics Ltd. 4
  • 5. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Establishing best practice–basedCompany process supportVision Ophir Optronics looked at a number of software The positive reputation of SAP software in Israel was solutions to find one that would fulfill its requirements. another deciding factor. “SAP has an excellent repu-Why SAP After a thorough market review, it selected the SAP ERP tation. There is a strong local SAP team – and we were application. “The solution provides end-to-end support also impressed by a reference from another companyImplementation for every stage of our operations,” explains Cohen. “In that had installed SAP ERP,” says Cohen. addition, we were keen to leverage the best practice– based structure provided by SAP ERP to enhance andSolution improve our own processes.”Benefits “Not only would SAP ERP provide end-to-end support for ourFuture plans operations, it would also provide us with a best practice–based structure used by some of the world’s most successful organizations. We wanted that.” Gil Cohen, CIO, Ophir Optronics Ltd. 5
  • 6. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Deploying across five business unitsCompanyVision In 2007 the company commenced a comprehensive implementation of SAP ERP. Conducted by the OphirWhy SAP Optronics IT team in-house, with help from SAP part- ner Ness Technologies, the rollout saw the solution >500Implementation deployed across five business units in four different languages.Solution The 16-month project included specialist training Users for 25 IT personnel in addition to user training forBenefits 300 employees across the organization. The number of employees using the solution has now grown to over 500 and is expected to rise further in the near future.Future plans 6
  • 7. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Turning complex reporting to advantageCompany with SAP ERPVision With SAP ERP in place, Ophir Optronics can rely on the high-caliber products that they expect, but also the solution to support every area of the company’s so that we can address any issues and make neces-Why SAP operations – from purchasing and sales to manufactur- sary improvements to ensure faults don’t reoccur.” ing and quality management. Workflow managementImplementation features guide users through each task to comple- Using SAP ERP staff can now run a report that auto- , tion, while comprehensive reporting functionality matically checks whether product measurements enables managers to pick up on any issues quickly fall between set parameters, highlighting any itemsSolution and take steps to resolve them. that fall outside agreed limits. This report is then sent to the customer as part of the shipping papersBenefits Quality management is just one area where SAP ERP accompanying each order. According to Cohen, SAP is making a difference at Ophir Optronics. “From ERP makes this complex reporting challenge straight- receiving raw materials from suppliers to shipping forward, helping staff to meet it efficiently. “For manyFuture plans finished products to our customers, and at every of our customers, it is a mandated requirement that stage in between, we must constantly check materials we provide detailed quality verification, so the fact against numerous detailed parameters,” comments that SAP ERP supports the efficient creation of these Cohen. “It is essential that any defects are picked reports is a huge advantage,” he says. up – not just so that we can provide customers with 7
  • 8. SAP Customer Success Story | High Tech | Ophir OptronicsExecutive overview Increasing productivity, reducing costsCompanyVision Thanks to timely, detailed reporting, managers at product design. In this way, we can increase our Ophir Optronics now have better visibility of perfor- yield while cutting costs.”Why SAP mance across the company’s operation. They can react faster to rectify faults and improve processes. Supported by SAP ERP, this culture of continuousImplementation process improvement is now prevalent across the As Cohen explains, this ability to spot problems and entire organization. Detailed reporting enables take action to solve them quickly yields tangible finan- staff in every function in every business unit in everySolution cial dividends for the company. “Every time we have country to identify issues and take steps to help to scrap a product or rework it, we lose money,” he make processes leaner and more cost-effective.Benefits comments. “But if we know we have an issue, we can “Ultimately, it is the customers who benefit from adapt processes as necessary – by providing more more attractive prices – and that makes us more training, replacing equipment, or even changing competitive as a company,” says Cohen.Future plans “Supported by SAP ERP, we have introduced a culture of continuous process improvement across the entire organization.” Gil Cohen, CIO, Ophir Optronics Ltd. 8
  • 9. Ophir Optronics Executive overview Employing a road map Company for success Vision Since the implementation of SAP ERP, Ophir Optronics has further extended its SAP software footprint by Why SAP deploying the SAP Customer Relationship Manage- ment and SAP Product Lifecycle Management appli- Implementation cations. The company also plans to install new finance functionality to improve accounting efficiency. Solution As well as adding to its SAP solutions, Ophir Optronics has implemented the software at all its foreign manu- Benefits facturing plants and subsidiaries. By 2015, the com- pany plans to be running SAP software in every part of the business for over 800 users. Future plansCMP21491 (12/08) Copyright/Trademark | Privacy | Impressum 9

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