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organisation - Enterprise Resource Planning (ERP) Buyguide
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A Case Study in ERP Implementation |
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Summary: A look at an ERP implementation and the benefits it brought a rapidly expanding kitchen appliance manufacturing company.
Our case study is a medium-sized manufacturer of kitchen appliances. Two years of unprecedented growth saw it move part of its production to China and enter new growth markets, including India and East Europe. As a result, a business that was traditionally producing, marketing and selling in one country now has operations in four different countries.Costs are lower thanks to better communication of information, which also means staff time is used more efficiently.
On top of the usual cultural and organizational re-engineering challenges, the company needed to cope with large amounts of information from different sources. Its existing database application could not integrate with other software or compile information to produce meaningful business reports. In addition, the distributed operations also meant that each location needed regularly updated information to make effective decisions. This was having a detrimental effect on profitability.
To solve the problem, the company took the following steps:
- It hired a new IT project manager and tasked him with evaluating vendors, products and internal company needs for a new ERP initiative.
- The company purchased the Sage 500 ERP package, which uses Microsoft SQL Server database.
- It implemented the CRM, Financials, Logistics and Supply Chain modules of the package.
- Each marketing outlet was equipped with a thin-client terminal that fed information to the main database.
- Information was frequently updated across continents through a secure and cost-efficient connection.
- Custom reports and forms were designed to produce meaningful data that employees could easily understand.
- Customized links to third-party business intelligence applications that analyze historical trends and help make decisions about future marketing strategies were developed.
Some specific benefits that occurred as a result were
- Costs are lower thanks to better communication of information, which also means staff time is used more efficiently
- The same interface is used in all locations, which means staff don't have to learn new processes when they are in different offices.
- The company database now feeds the organization with up-to-date and accurate information.
- Business alerts have been set up in the system to help improve logistics and order tracking. Further, a pre-defined set of rules quickly notifies managers of issues.
- There is greater control over stock levels and more efficient inventory management.
The solution not only meets the company’s current needs, but also allows it room for future expansion. And thanks to economies of scale, every successive expansion will result in lower cost of ownership of the technology. Also, by aligning with an established technology vendor, the company benefits from guaranteed patches and upgrades. |
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