Shenzhen Yitoa Intelligent Control Speeds up Cost-Accounting by 60% to 100%, Shortens Financial Settlements by Five Days
 
 

Shenzhen Yitoa Intelligent Control Speeds up Cost-Accounting by 60% to 100%, Shortens Financial Settlements by Five Days

Shenzhen Yitoa Intelligent Control Co., Ltd. designs, develops, manufactures, and distributes intelligent-control products, such as printed circuit-board assemblies, headlight ballasts, and light-emitting diodes. The company develops more than 300 new products each year and sells over 14 million items. Its intelligent-control products are mainly used to manufacture portable digital equipment and industrial control equipment.

As a rapidly growing supplier of intelligent-control products for the global, household, small electrical-appliances market, Yitoa Intelligent Control needed to improve the efficiency of its operations. The company implemented Oracle E-Business Suite Release 12.1 to develop an integrated enterprise resource planning (ERP) system that would optimize the company’s financial management and improve the efficiency and accuracy of its supply chain management.

Yitoa Intelligent Control has accelerated its cost accounting processes by 60% to 100%, shortened the financial settlement cycle from six days to one day, increased the efficiency of nonproduction employees by 20%, and reduced departmental expenses by an average of 7% to 8%.

 
The Need to Strengthen Financial and Supply Chain Management

A word from Shenzhen Yitoa Intelligent Control Co., Limited

  • We chose Oracle E-Business Suite Release 12.1 because Oracle has an excellent global reputation in the small-appliance market, and we were impressed by the product’s flexibility and low maintenance costs. The integrated ERP platform has sped up our cost accounting processes by 60% to 100% and cut financial settlement time from six days to one day.” – Gu Yuandong, Vice-General Manager, Shenzhen Yitoa Intelligent Control Co., Ltd.

Listed company Yitoa Intelligent Control is growing rapidly, and it now makes intelligent-control products for numerous international, electrical product manufacturers, such as Black & Decker, Conair, Delonghi, Huaqi Information, Midea, Philips, Skyworth, and Tefal.

To support this growth, Yitoa Intelligent Control wanted to strengthen and standardize its financial accounting and auditing processes at its headquarters and subsidiaries, enable management to make faster and more informed business decisions, and reduce operational costs. The company also wanted to better coordinate its supply chain management to ensure it could quickly and efficiently produce and deliver its high-performing electrical products.

“We needed to increase the speed and accuracy of cost accounting for work orders and finished products,” said Gu Yuandong, vice-general manager, Shenzhen Yitoa Intelligent Control Co., Ltd. “We also needed a system that would track work orders through the supply chain and better monitor ordering, purchasing, inventory, production, and customer delivery processes to improve turnaround times and avoid human error.”

 
Financial Settlement Time Cut by Five Days

 
Cost Accounting Processes Accelerated by 60% to 100%

 
Improved Operational Efficiency and Reduced Expenses by 7% to 8%

 
Improved Inventory Turnover and Reduced Holding Costs

 
Automated Work Order Processes Reduce Human Error

 
 

 
 

Challenges

  • Establish an integrated business and financial system to enhance risk control and ensure companywide compliance with listed company disclosure requirements
  • Strengthen financial accounting and auditing processes to reduce operational costs associated with the design, development, manufacture, and sale of intelligent controls
  • Increase the accuracy and speed of cost accounting for work orders and finished products
  • Align production and purchasing plans to improve customer delivery times and minimize costs for redundant inventory
  • Process work orders and optional component orders automatically to eliminate human error

Solutions

  • Increased the speed of cost accounting by 60% to 100% for work orders and finished products, by attributing production costs to different manufacturing processes and providing accounting information in real time
  • Shortened the financial settlement cycle from six days to one day by automating financial accounting processes across departments and locations
  • Controlled operational costs more efficiently, reducing departmental expenses by an average 7% to 8%
  • Enhanced corporate cash flow, by improving the efficiency of accounts receivable and accounts payable checking processes by 30%
  • Increased the efficiency of nonproduction employees by an average of 20%
  • Enabled managers to make better business decisions by providing faster access to accurate, up-to-date business and financial information
  • Identified the cause of differences between standard and actual production costs by automatically calculating separate costs for materials, labor, manufacturing, and outsourcing
  • Improved warehousing and order delivery times by accessing consolidated, real-time production and purchasing data in an Oracle-based material requirement planning platform
  • Reduced dead inventory, improved inventory turnover ratio, and reduced inventory holding costs by integrating production and purchasing plans with inventory status
  • Minimized human error by automating previously manual processes required to record information about optional components, such as color choices
  • Reduced the number of bills of materials in the digital business department, and the number of items on each bill of materials
  • Met stringent listed company disclosure requirements by improving the accuracy and efficiency of financial data and creating an audit trail

Why Oracle

According to Gu, Yitoa Intelligent Control selected Oracle E-Business Suite Release 12.1 because of Oracle’s strong global reputation in the household, small-electrical-appliance market.

“One of our customers, Midea, a China-based, global consumer appliances and air conditioning systems manufacturer, is already using the system,” he said. “Based on its and other customers’ experience and wide-ranging market surveys, we believed Oracle E-Business Suite’s expandability, flexibility, and openness, as well as low maintenance cost and ease of use, would meet our ERP requirements.

“Additionally, Oracle E-Business Suite Release 12.1 complies with the different reporting requirements of listed companies, such as financial audit reporting,” said Gu. “This makes the solution ideal for our rapidly growing organization. Oracle E-Business Suite Release 12.1 has also been highly praised by our auditing company, China Audit International Certified Public Accountants Limited.”

Implementation Process

Yitoa Intelligent Control began implementing Oracle E-Business Suite Release 12.1 at its headquarters and subsidiaries in April 2011. The company implemented Oracle Financials, Oracle Inventory Management, Oracle Purchasing, Oracle iSupplier Portal, Oracle Order Management, and Oracle Discrete Manufacturing.

The system went live on November 11, 2011.

Partner

Yitoa Intelligent Control engaged Oracle Specialized Partner AdvancedTEK Technology to implement Oracle E-Business Suite Release 12.1.

“AdvancedTEK Technology installed, configured, and tested the system and provided staff training and online maintenance,” said Gu. “We chose to work with AdvancedTEK Technology because the company has an excellent reputation for completing large-scale Oracle implementations. We were very pleased with their work on this project.”