The benefits from ERP do not come from simply having the software; they result from being able to leverage its integrated capabilities to deliver better information to key decision makers. This leads to improved decisions, effective execution of business strategy, and better-served, more satisfied customers.
Below are four companies who have learned to leverage their ERP data, and in some cases CRM, to their advantage.
Reily Foods Company
New Orleans, La.-based Reily Foods Company is a 110-year-old food and beverage manufacturer. The company has manufacturing facilities in New Orleans and Knoxville, Tenn. It is the second-largest manufacturer of iced tea in the country with its Luzianne brand, and makes other consumables such as mayonnaise and coffee.
“When we decided to get in with an ERP system, we hired a third-party consultant to review all our business processes and technology,” says Chris Foucheaux, director of business analytics and development at Reily Foods. A key metric that showed up as needed in all departments was timeliness of data. That was a significant challenge, because without the proper data, they couldn’t make appropriate decisions. “So when we looked at an ERP solution, that was the overarching goal for us: to get timeliness of data across the organization for one true picture,” says Foucheaux.
The company also felt the need to implement newer technology, ultimately choosing Microsoft Dynamics AX. With the timely ERP data that the solution delivered, Reily improved inventory turns and the management of its inventory. Further, they were able to better supply customers and support them with the proper service levels.
Reily strategizes around five key initiatives on an annual basis. Two of these are improving the processes and technologies the company has in place, and food safety and sustainability, which is increasingly important as markets expand and global certifications are required. “Part of the rationale for the initiatives is to assure we can pull data from our systems for informed decision making,” says Foucheaux. “Dynamics AX has done a very good job of this.”
One of the goals that Reily is striving for with their process technology initiative is to be predictive with their business. “We need to make accurate forecasts, understand them, and be able to produce to meet them,” he says. “When key fires strike up and we’re reactive, we’re not as effective and efficient as we could be.”
The British Retail Consortium (BRC) certification has become essential in the food and beverage industry, and Reily leverages its ERP data to have full traceability of its product across the supply chain. A case in point occurred with the company’s last BRC re-certification, an annual requirement. “A mock recall is one of the requirements of certification,” he explains. “With our old systems, both IT and the warehouse would have been involved to produce this report—a time-consuming effort. With Dynamics AX, we created the report in less than an hour, without requiring IT support.”
When first implementing the ERP solution, Reily was able to continue to ship and receive on time, as well as execute billing without disruption. “The process turned out to be smooth and anti-climatic, and that was very enjoyable, indeed,” concludes Foucheaux.
Heritage Bag Company
Dallas, Texas-based Heritage Bag Company, the nation’s largest producer of industrial trash bags, has six manufacturing facilities across the United States and produces 350 million pounds of product annually. Heritage implemented Microsoft Dynamics AX as its ERP solution in 2006; according to Sheffield, not only Heritage, but also its customers have benefited from the company’s improved ability to leverage its ERP data. “We know our customers better now, so we can service them better,” he says. “We often are able to tell them about sales trends in advance. That information alone, really that data flow, has been the selling point of our customer service. It’s pretty interesting when we can go into a customer and tell them more about their business than they know themselves.”
For Heritage, the visibility provided by ERP data impacts virtually every aspect of the business. “We’re able to do more with less,” explains Sheffield. “We’re much more efficient, and it all goes back to that data stream. Besides AX, we can also serve up that stream through our wholeMicrosoft platform—whether Excel, SharePoint, Reporting Services, and so on—to get that information to the appropriate user at the appropriate time in the appropriate way for maximum benefit.”
New Berlin, N.Y.-based Chobani, Inc., is a manufacturer of Greek yogurt, the top-selling brand in the country. Since its inception in 2005, the company has grown from five employees to almost 2,000 strong. It started out with one truck of milk a day and now uses over 4 million pounds daily. Today Chobani products are available nationwide as well as in Australia, Canada, and the UK.
“Our customers benefit from how we use ERP data because it allows us to take raw materials in, right down to the finished good. But also because it helps us enhance the whole process,” says Maureen Hurley, vice president of IT at Chobani. “Our slogan is, ‘nothing but good.’ Our use of ERP allows us to deliver that ‘nothing but good’ quality through our processing facilities, through the distribution channel, and right to the shelf.”
The business challenge when Chobani was a start-up was to move from manual, paper processes to automated ones. “As we grew, we knew we needed a more robust ERP system for inventory control, supply chain management, warehouse management—all the way through our operations,” says Hurley. Chobani’s selection of Microsoft Dynamics AX was influenced by the familiarity of its personnel with other Microsoft technologies (e.g., Excel, Outlook). “Our users picked up the interface really quickly,” notes Hurley. This made for easy handling and understanding of ERP data, which facilitated the implementation of solutions as Chobani continued to grow at a rapid pace. “Change in the manufacturing facility was challenging enough,” says Hurley. “That our ERP information came in a format we were familiar with was an advantage.”
The benefits the company has experienced since coming online with the Dynamics AX ERP solution include:
- Lower costs of products and processes
- Better control of inventory
- More efficient financials, including issue of payments and receipts
- Faster time-to-market
“We’re big process people,” says Hurley. “We knew that we didn’t do anything differently than most ERP users from a general ledger, accounts receivable, accounts payable and supply chain perspective. What we did differently was process; so we engaged Fullscope to work with us in implementation because they wrote the processing module that was purchased by Microsoft. They had the most knowledge to help us integrate our core competencies with the software solution.”
A further advantage Hurley cites is the tight integration of Microsoft Dynamics AX and Microsoft Dynamics CRM. “The integration was already there, which meant we could get to market very fast while implementing the modules at our own pace,” she notes. “It was a logical choice to go this route.” It was cost effective—the total cost of ownership was compelling when compared to other solutions—and the power of the ERP/CRM data to efficiently run Chobani’s growing business was essential. “In the end, it was basically a no-brainer for us,” Hurley concludes.
Montreal, Quebec-based Eureka Lighting is a North American leader in decorative lighting solutions manufacturing. The company provides a wide range of flexible products designed to meet the needs of architects and designers and to enhance contemporary working and living environments.
Founded in 1987, the company grew very rapidly, and a number of issues developed: inventory proved increasingly difficult to track effectively, and order fulfillment and customer satisfaction rates fell short of management expectations.
With millions of product possibilities, Eureka’s dependence on precise inventory figures is impossible to overstate. The company relied on staff to manually track inventory, patrolling the warehouse with pen and paper in search of needed parts. This made it difficult to estimate delivery times. Orders took longer to fulfill, and customer delivery times became less predictable. Business reporting was also nonexistent. Plant floor staff, managers, and partners lacked a clear, centralized view of the number and status of orders, and the means to easily adjust them on the fly.
To address these challenges, the company implemented an ERP solution (Microsoft Dynamics AX), and then leveraged ERP data to reduce inventory, cut delivery times, and dramatically improve customer satisfaction rates. The result: greater operational efficiency and a better bottom line. Now ERP data provides an exact picture of stock positions to help sales staff make correct delivery assessments for customers, give plant floor staff insight into what is needed, and smooth the processes of accounts payable and receivable.
“Using the data from Microsoft Dynamics AX, we can leverage the market experience we’ve accumulated to be more flexible and responsive,” says Patrick Foley, president of Eureka. The resulting business improvements include:
- Lower inventory load and reduced customer service time
- Real-time visibility of stock and order information
- Better customer access to Eureka’s online quote configurator, driving up satisfaction rates
- Reduced operating costs:
- Dedicated staff for inventory cycle count, procurement, and distribution reduced by 50 percent; staff reallocated to more strategic areas.
- Inventory costs reduced by $2M.
- $800K in obsolete parts eliminated.
- Administrative tasks reduced by 20 percent.
- Faster turnaround times, extremely fast for a make-to-order business
RESOURCEFULNESS BY EXTENSION
It is ironic that many companies running ERP forget that the idea of resource is at the center of the application. Those who remember and therefore leverage ERP as a resource find themselves at a competitive advantage. “Intuition becomes increasingly valuable in the new information society precisely because there is so much data,” said the author and futurist John Nesbitt. Implicit in this idea is the fact that while data holds power for its users, the imagination and expertise of its users is what unleashes that power. This holds true for ERP data, and is one of the reasons that the ability to extend ERP by integrating other technologies with it is such a powerful tool: it provides more opportunities for individuals to leverage their own capabilities in using technology.
As the above cases show, Microsoft Dynamics AX is particularly well suited to unleash the power of data because of the ability to extend its value through other Microsoft technologies. This integration provides people with the information and tools necessary to work more productively, communicate more effectively, and find, share and make greater sense and use of information.
In the end, ERP (including its data) is an enabler of better business processes; it helps us move towards excellence by providing the basis for greater understanding. Of course, that understanding must involve the users’ intuition, leadership, intelligence, and culture to attain change and positive growth. Then our resources can attain their maximum value, including our Enterprise Resource Planning systems.
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