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ERP and the business of recycling

Teng Fang Yih | April 28, 2011
How a Norwegian provider of recycling services avoids costs and maximises growth potential just by implementing the right ERP system.

Last November saw the official opening of Metallkraft’s brand new recycling plant in the western industrial district of Tuas. By then the Norway-based provider of material recovery services to the solar photovoltaic (solar PV) wafer manufacturing industry–particularly, the recycling of cutting slurry used in the solar PV production process–had already been running its US$100 million facility for almost half a year. Eric Esser, Managing Director of Metallkraft Singapore, granted Computerworld Singapore, an interview in late July last year–as operations were ramping up from 25 percent of the plant’s capacity–and shared with us how the implementation of the Kingdee’s K/3 enterprise resource planning (ERP) helped his organisation obviate the risks and costs that could well come with manually tracking and managing 40,000 tonnes a year of slurry.

Below is the expurgated transcript of the interview. To read the rest, set your browsers to www.computerworld.com.sg and search from there.

Computerworld Singapore: What IT challenges are unique to your business?
Eric Esser: Metallkraft is a slurry recycling company. We provide services to the solar PV wafer industry. What that means is we provide the service where we take off a kind of waste that is generated when solar PV wafers are cut or made and we reprocess that material back into slurry, which can be reused by the solar wafer manufacturer.

The value proposition there is to significantly reduce the cost of producing solar PV wafers for the manufacturers. We are a Norwegian company, so our headquarters is in Norway. We have a small factory there, and then we have a factory that opened in early 2009 in China, and we are here in Singapore with our largest factory to date.

When we talk about the size of our factories, we describe that in terms of the volume of material, the slurry, that we can produce per year, and here in Singapore we process 40,000 tonnes per year of this slurry. We are a relatively new business although we have three operations around the world now. We have really been on this industrial expansion track for more than three years, and for us, the challenges around growing a new industrial business and dealing with very large volumes of material mean that we need the kind of systems that allow us to really understand the business from the beginning, and really ensure our businesspeople constantly have access to good information about how material is flowing through our processes and our factories. I think that is the main IT challenge from our perspective.

Tell us about your costs before and after implementation.
In Singapore, we were the first of the three factories for Metallkraft to implement a Kingdee ERP [enterprise resource planning] system. We started operations on April 1 [2010] here in Singapore and at the same time we went ‘live’ with Kingdee. In fact, we implemented Kingdee right out of the gate. From my perspective, here in Singapore, with the volume of material that we’re handling, the idea was really cost avoidance and operational efficiency. We would not be able to manually keep track of the operation on the scale that it exists here in Singapore. So for us it was less about a goal around cost reduction per se from an existing operation, but more about setting up an environment that allows us to be successful. We’re still in the middle of ramping production. We reached about 25 percent [as at late July 2010] of our total capacity here in Singapore, and we’re using the Kingdee system actively to understand the business as it is growing and developing here in Singapore.

Talk about your three facilities.
Our Singapore operations are held by Norway. We report directly to headquarters in Norway, but the interesting thing is about 90 percent of the revenue for Metallkraft comes from Asia. And much more than 50 percent, probably about 70 percent, of our revenue is from Singapore now. So just in the short period of time that we’ve been operating here, we’ve grown to be the largest operation in Metallkraft worldwide. And that will be the case for some time. In fact over the long-term, we see that the majority of our business will be done here in Asia. But we are not a regional office at the moment. So here in Singapore we serve one customer, i.e. REC [Regional Energy Corp.]. They have an integrated solar manufacturing facility here which means they start from silicon and they wind up with solar systems. We serve a part of their business, the wafering part of their business.

 

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