A Fast Ride

Kids throughout America have delighted in classic WHAM-O brand toys and sports equipment for more than fifty years, including Frisbee, Superball, Hula Hoop, Hacky Sack, and Slip-n-Slide. Yet making toys is not all fun, it's a highly competitive game. Until 1998, WHAM-O was a division of Mattel, Inc., maker of Barbie, Hot Wheels, and other famous brands. As part of a restructuring plan to manage costs and improve profitability, Mattel sold the WHAM-O brands to a group of investment bankers from Brown, Macmillan, & Company, and Charterhouse in December 1997.

"Our return on investment period from consolidating our voice and data WAN networks was three months. We've virtually eliminated international toll charges by using the network to route calls from Mexico to the United States before linking them to the public telephone network."

Scott Eggers
Director of Information Systems
WHAM-O

Challenge
The newly independent WHAM-O had just six months to design and deploy an entirely new network for its sites in San Francisco and Torrance, California, and manufacturing facility in Tijuana, Mexico. The new systems needed to enable WHAM-O to meet its business goal of rapidly expanding revenues 150 percent each year. The company determined that the new network must support a mission- critical enterprise resource planning (ERP) system, a supply-chain management (SCM) system to key customers, a Web site, Internet access, and an international telephone network.

Solution
WHAM-O selected QAD, a leading supplier of ERP software, for its ERP system and deployed it on centrally accessible servers in San Francisco. The company also selected Cisco as its networking vendor. The new wide-area network (WAN) between the three WHAM-O sites connects via Cisco MC3810 Access Routers to support Enterprise Resource Planning (ERP) data transactions and voice calls over a Frame Relay network to San Francisco. WHAM-O uses Cisco 1600 series access routers and a telephone connection via standard modem as a backup WAN. A standard electronic data interchange (EDI) system to its large retail customers is an initial step toward integrated Statistics Collection Manager (SCM).

Results
With the QAD ERP system successfully on line and tested before the end of the six-month period, it was assured a smooth transition from the Mattel ERP and SCM systems. The Cisco network is easily extensible to meet the anticipated requirements of WHAM-O's ambitious business expansion plan. Because Frame Relay services in Mexico are unreliable, Cisco 1600 routers provide a critical capability as a backup WAN that lets WHAM-O sustain mission-critical ERP communication. Toll bypass savings through combining voice and data over the WAN from Mexico to San Francisco resulted in a return on investment in just three months.

As demand on the network grows, WHAM-O can add Cisco routers and switches as needed, shifting existing equipment to less-central roles for maximum return on investment. Cisco IOS software and technologies of Cisco routers and switches enable a straightforward migration path.

Background

From the start, WHAM-O established an ambitious plan to rapidly grow revenues through acquisitions and aggressively building the current brand portfolio.

WHAM-O started with less than 100 employees, with sales, marketing, design, and development in Torrance, purchasing and manufacturing in Mexico, and corporate headquarters in San Francisco. The Mexico facility houses the majority of WHAM-O employees, and its manufacturing activities directly drive revenues. The Tijuana WAN is therefore mission critical because it connects the manufacturing facility to the ERP system housed in San Francisco.

Challenge

As part of the transition agreement, Mattel supported business transactions over its network and systems for the first six months, while WHAM-O designed and deployed an entirely new network and server-based ERP system. The six-month timeframe proved aggressive. Scott Eggers, Director of Information Systems at WHAM-O, heads the technical team tasked with deploying and maintaining the new network and ERP system. While he had the luxury of starting from scratch with no legacy systems, Eggers and his staff had to provide a telephone system, ERP, e-mail, Internet access, and a separate SCM system to key customers. WHAM-O needed a robust, reliable, and scalable network to support these applications. It also needed a network that could expand easily to support accelerated company growth.

Solution

WHAM-O hired Coopers and Lybrand consultants to manage a cross-functional team of WHAM-O executives and IS staff to evaluate and select a new ERP system. The team recommended QAD as ERP vendor because of its experience with other toy manufacturers, focus on improving speed, and agility of operations and customer-demand functions. WHAM-O chose Cisco as its networking vendor based on product breadth, quality, and service and support. The Cisco experience at Mattel proved it a strong vendor partner. "I think Cisco has the best support in the industry," Eggers said.

WHAM-O also hired two systems integrators to assist with the ERP system rollout: Business Systems Specialties, Inc. (BSSI) in Newport Beach, California, and JDW Consulting. Each has extensive experience with QAD and other toy companies, allowing them to understand market demands specific to WHAM-O.

WHAM-O needed a reliable, cost-effective WAN that could support both voice and data traffic. Orange Coast Data Communications in Southern California assisted WHAM-O with its network design. Based on the consultant's recommendation, WHAM-O installed Cisco MC3810 Access Routers, configured for Frame Relay between San Francisco and Mexico, and Integrated Services Digital Network (ISDN) between San Francisco and Torrance. The Torrance office later moved to San Francisco into an annex across the street from the corporate headquarters and data center. A Cisco 1600 in a San Francisco annex now connects via a T1 line to the Cisco MC3810 at the headquarters office. A separate Cisco 1605 router and firewall in San Francisco provides secure Internet and public Web site access.

WHAM-O Deploys ERP over Cisco WAN
The new ERP system is centrally located in San Francisco, and its rapid deployment was WHAM-O's top priority. During the transition period, the Mattel ERP system handled all transactions, sending WHAM-O hardcopy reports of orders taken and shipped. The WHAM-O network went live one month before the Mattel network support agreement expired--in time to resolve any system glitches. A distributed QAD deployment in all three offices would have protected WHAM-O from delays due to WAN network outages, but would have taken far longer to deploy.

Having a central ERP system places a heavy responsibility on the WAN to enable high availability to users in Mexico. If the ERP system is unavailable, business stops. "The wide-area network is extremely mission critical," says Eggers. It didn't take long to discover that Frame Relay service in Tijuana is not as dependable as it is in the United States. It can go down for minutes or even weeks--at a time.

To keep the ERP system highly available, WHAM-O installed Cisco 1600 routers in Mexico and San Francisco to provide a backup WAN network. "Before we put the backup network in place, we had to send people home when the Frame Relay network failed," Eggers says. "The router senses the health of the Frame circuit. If the circuit fails, the router initiates a call back to San Francisco. It works flawlessly. Just like clockwork." Now the backup system takes just seconds to take over--with no session loss.

A Cisco 1605 router at headquarters provides the access point to the data center from the backup router in Tijuana. It also provides secured Internet access for the entire company and connects the external Web site on a separate LAN segment to assure security.

Voice over Frame Relay Dramatically Reduces Telephone Bills
As Eggers explored how people use the network, he found that the Tijuana purchasing team was using the phone, not the network, to conduct purchasing. The team made most of telephone calls to the United States; at $0.82 per minute, this averaged $8,600 per month in long-distance telephone charges from the Tijuana facility alone. Eggers realized that if WHAM-O used the Cisco MC3810 for a voice-over- Frame-Relay network, its Mexico office could substantially reduce the phone bill to .07 a minute--and actually pay for the new network with the savings.

"Our return on investment period from consolidating our voice and data WAN networks was three months," Eggers says. "We've virtually eliminated international toll charges by using the network to route calls from Mexico to the United States before linking them to the public telephone network."

At first, WHAM-O deployed voice/data Frame Relay links between offices, but latency issues made it difficult to maintain consistent voice quality. Directing split voice-and-data traffic into separate circuits stabilized the WAN network, without requiring extensive quality-of-service (QoS) adjustments. Most importantly, users don't notice the difference between the new voice system and standard telephone connections. In fact, Eggers says, "The quality's been amazing."

SCM and Internet access connect WHAM-O to Its Customers.
The lion's share of WHAM-O's business includes very large retailers such as Wal-Mart, K-Mart, and Target. To successfully conduct business with "the big guys, WHAM-O installed a separate electronic data interchange (EDI) system, which handles transactions and documentation related to ordering, invoicing, and inventory management. EDI is a form of SCM that leverages technology solutions to automate business transactions between manufacturers, suppliers, and customers. In general, supply chains enable direct interaction with database systems to speed and simplify order fulfillment, product life-cycle management, and post sales service. An SCM system directly contributes to customer satisfaction and helps control operational costs. Unlike many medium-sized companies, WHAM-O does not outsource its EDI services, instead using an application developed by EC Bridges to translate incoming EDI data and upload it directly to the QAD system. This gives WHAM-O rapid access to customer orders and queries, and has proven less expensive than outsourcing.

Results

With its QAD and Cisco solutions, WHAM-O's robust IS infrastructure can sustain the rapid growth called for in its business plan. The company has grown almost 75 percent since its spin-off from Mattel. WHAM-O thrives in an intensely competitive industry because its information system delivers what it needs.

WHAM-O's new ERP system rollout was the fastest in the history of QAD--an aggressive seven and a half weeks from order to online. Eggers says the rapid rollout schedule required many sacrifices, but both QAD and Cisco quickly responded to his needs. QAD awarded WHAM-O a "Rapid Achiever Award" for the effort.

The return-on-investment period for the voice-over-data network was three months. The savings from toll bypass help justify the cost of future application development and network expansion. With Cisco IOS software in Cisco devices the IS team can easily add larger devices and relocate existing ones as the network grows. With a stable, scalable, and secure network in place, WHAM-O is preparing to roll out IP extranet services to key suppliers and is exploring ways to better leverage its Web presence.