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RW&A is featured this month on the cover of Accounting Technology magazine - the article is reprinted here in its entirety:
Improving the communication lines with vendors and customers can improve the bottom line as well.
by Richard McCausland
If you lined up all the hotdogs served at the Toronto
SkyDome in one year, they would cover the distance of 3,241 stolen
bases. It’s probably not so surprising, then, that the stadium also
boasts as many as 24 warehouses for Blue Jays souvenirs. But how about
this: some of those warehouses are walking around!
That’s right. “Bob on the 200 Level,” who’s hawking
Blue Jays caps and T-shirts to fans already in their seats, is tied
into the inventory control and sales analysis modules of BusinessVision
32, effectively making him a portable warehouse, notes Michael
Andrejek, director of merchandising for TBJ Merchandising. In all,
BusinessVision is closely tracking product dispersed among one
full-fledged store, fifteen retail kiosks, and as many as eight roving
vendors.
With the aid of Rowie Walker & Associates, a
Toronto-based BusinessVision reseller and software development partner,
TBJ is discovering all the efficiencies that flow from Supply Chain
Management. That may not have been the catchphrase TBJ used when it
first approached Rowie Walker five years ago with a fairly
straightforward business objective. As Andrejek recalls, “We wanted to
do two things: minimize the dollar amount that’s tied up in inventory,
yet maximize our sales.”
Tying what comes in with what goes out is pretty much
the essence of SCM, which encompasses everything from working with
suppliers to ensure just-in-time inventories, through automating
internal business processes, to delivering goods in a timely fashion.
To meet this need, middle-market accounting software publishers are
patching together end-to-end software suites.
“SCM is a recognition that companies have to manage
more than their internal business processes,” says David Butler,
executive vice president for Customer & Channel Operations, Best
Software Mid-Market Division, based in Irvine, Calif. It means thinking
beyond one’s own four walls and pro-actively communicating with
suppliers and customers, he suggests. “It’s a facilitating technology”;
an attitude toward how to run a business.
Pleasanton, Calif.-based Accpac International
explicitly promotes its Web-enabled Advantage Series as comprising
end-to-end business management applications, well suited to SCM. It
takes in not only back-office financial management, but also CRM, HR,
warehouse management, business intelligence (Insight), e-commerce
(Exchange and eTransact), and more. It has to do all this, since “SCM
is a big beast,” says product management vice president Craig Downing.
It certainly involves making it easier for the company
to interact with vendors and customers. As Downing points out, “There
are very few companies today that aren’t an integral part of some other
company’s success. Therefore, they have an obligation to be good
corporate citizens”—that is, to furnish their partners with accurate
data, provide timely service, and be easy to do business with. This is
more than a matter of professional courtesy; it’s essential these days
to business survival since, as Downing points out, “If you’re not the
best partner I can find to be part of my supply chain, then I’ll find
someone else.”
Microsoft Business Solutions offers extensive supply
chain functionality within its Great Plains, Solomon, Navision, and
Axapta business management packages. Over the past eighteen months, it
has continued to fine-tune its overall SCM strategy with the
introductions of Microsoft Customer Relationship Management, Demand
Planner for forecasting, and Business Network for automated
communication among trading partners.
And there’s even more work to be done, according to
Bjarne Schon, director of supply chain strategy and planning for
Redmond, Wash.-based Microsoft. The company recently conducted a survey
of 85 mid-market companies related to “what pains and challenges they
had,” he says. The most common complaint was “poor base data” because
of a “lack of visibility” into precisely how trading partners were
performing. This was resulting in unbalanced inventories and shaky
sales forecasts. “Things would sometimes go wrong, but they didn’t know
until it was too late to fix it,” comments Schon.
MBS hopes to remedy this by offering tightly integrated
solutions within the emerging .Net/BizTalk framework to ensure
around-the-clock connectivity among trading partners, as well as
implementing new technologies such as Radio Frequency Identification.
Schon points to a pilot program in Denmark as an indication of where
Microsoft is heading on the SCM front (see sidebar, page 18).
When TBJ first contacted Rowie Walker & Associates,
the merchandising firm had a big inventory headache. The independent
contractors that were running the SkyDome kiosks would typically not
close their books until the completion of each series of at-home games.
“We might be looking at three to three-and-a-half weeks before we knew
what [inventory] those guys had left. Only then would we know if we had
to re-order supplies,” says Andrejek. The result was that TBJ might be
out of stock on fast-moving items—thereby losing sales—or would
belatedly find itself glutted with some merchandising duds. There was a
crying demand for real-time data.
RWA stepped to the plate with BusinessVision 32,
running on the Pervasive Btrieve database. Multiple warehouses were set
up in the Inventory module, whose Receiving function allows for the
rapid data entry of changes in quantity, location, cost price, and
selling price as new shipments arrive. The Point of Sale module—fully
integrated with Inventory, A/R and GL—displays a “ListView” of SKUs for
quick browsing and selection. The package also lends itself to
Customized Reporting, such as payment method reports for cash balancing
by location.
“The approach taken for implementation was hands-on,”
says Samantha Walker, RWA’s director of software development. “We were
on-site to assist with setting up the general ledger, customers,
suppliers, and inventory.”
During a second phase, RWA installed its proprietary
InBridge module, which can automatically replicate inventory
descriptions (product code, pricing, etc.) throughout the multiple
warehouses, as well as facilitate stock transfers. “Before each
[sports] event, vendors visit the main warehouse to retrieve inventory,
now easily tracked through InBridge, which groups the transfers for
reconciliation after the event,” explains Walker.
“It is important to know exactly where inventory is,”
she notes. “For example, during a game, when a [kiosk] vendor is out of
stock on an item, the customer can easily be directed to the closest
location that has it” once the vendor consults the ListView of SKUs.
RWA also has upgraded the database engine to Pervasive
SQL Workgroup, “achieving greater stability for the many users who had
been added since the original implementation,” notes Walker. And TBJ’s
own IT staff put in a wireless network last year to allow for
additional real-time retail locations. RWA provided the POS hardware.
Already looking ahead, Walker anticipates gaining
greater operational efficiencies for TBJ by tying BusinessVision into
the Geac business management and Hyperion reporting tools used in the
head office. She also sees room for improving the data output afforded
by UPC bar-coding technology.
TBJ’s Andrejek, meanwhile, is thoroughly pleased with
what BusinessVision 32 has given him thus far—not least, scalable
functionality into which his company can grow. He’s considering the
adoption of e-BusinessVision to facilitate remote communications—for
instance, equipping the roving vendors with handheld devices.
Recalling the glory days of 1992-93, when the Blue Jays
won back-to-back World Series and were drawing in more than four
million fans a year, Andrejek wistfully remarks, “If we had had
BusinessVision then, we would be so much farther ahead.”
Underscoring the importance of supply chain management
in the mid-market, Microsoft Business Solutions has embarked on a pilot
program that seeks to exploit the promise of Radio Frequency
Identification (RFID) technology.
Microsoft is working with KiMs, a Danish manufacturer
that ships approximately 100,000 pallets of snacks annually, to extend
the client's existing Axapta functionality in the areas of demand
planning, event management, trading partner collaboration, and
RFID-enabled warehouse management. The project went live in late
December.
Viewed as an alternative to bar-coding, RFID-tagged
items do not require direct contact or line-of-sight scanning. Rather,
items-still in their carton-can automatically transmit all relevant
information (batch number, expiration date, etc.) as they approach a
reader. In the KiMs project, tags are monitored at storage, loading,
and shipment, with the data continually fed back into Axapta.
"We expect this solution will offer users near
real-time visibility into the location of products in the supply
chain," comments Satya Nadella, MBS corporate vice president of
development. This should result in tighter inventories.
With annual revenue of $67 million, KiMs implemented
Axapta last June for manufacturing, raw materials procurement, sales
order management, and warehouse management. However, the company was
seeking an enhanced ability to monitor pallets of finished goods as
they moved from production into a third-party warehouse. To ensure
product availability, they also wanted real-time data as to where
product was at various points in the supply chain.
With the pilot program, Axapta warehouse management has
been integrated with the RFID platform. The total solution also
comprises Microsoft Business Network for trading-partner collaboration,
including the exchange of business documents, and Microsoft Demand
Planner for forecasting and marketing campaign management.
With the aid of Categoric Software, a U.K.-based
Microsoft development partner, the KiMs install also includes an Event
Management module for purchase order confirmations, supplier delivery
reminders, and in-bound supplier delivery monitoring. Aston Business
Solutions, with global headquarters in Copenhagen, contributed
implementation consulting.
Exact Software product manager Glenn McPeak believes
Web technology is a critical ingredient toward successful supply chain
automation. “With the advent of supplier and customer portals,
companies could really provide online interaction and visibility
throughout the supply chain,” producing “tremendous efficiencies,” he
says.
Andover, Mass.-based Exact provides such linkage
through a combination of its proprietary Macola-ES business management
software and e-Synergy for online sharing of information. While some
companies partner with “best-of-breed” developers to fill out their
business-processes automation, “The optimal approach is to provide
native functionality that is ‘built from the ground up’ to work
together for obvious reasons,” says McPeak.
He offers this analogy: “Synchronizing a supply chain
solution from different vendors is a little like installing a General
Motors engine into a Ford car. While it might work, the car will likely
never run properly,” says McPeak.
Tight, “native” integration may go a long way toward
ensuring a successful SCM deployment. However, it’s also crucial that
the implementation partner has an extensive business background—”actual
hands-on knowledge of business processes,” contends Hugh Riddle, senior
consultant and partner with Triangle Partners, an Exact VAR based in
Glendora, Calif.
As Riddle sees it, “The typical reseller is very
task-oriented, and therefore is quite good at automating an HR process
or making a sales report. But the much larger task of solving the
complete supply chain issues is more than most resellers can handle.”
Of course, it helps to pay close attention to what the
customer is saying. McPeak cites the case of Phantom Screens, a
supplier of retractable door and window screens, which was simply
looking to implement a Customer Relationship Management system to
better manage customer inquiries and account data. The customer also
wanted the CRM to link up with their accounting so that sales personnel
could more readily access billing information and customer financial
histories.
Phantom Screen, however, relies on a national network
of distributors. Triangle was able to show the client that, by setting
up an e-Synergy distributor portal, distributors could access product
manuals for real-time availability and pricing data, which they could
access while still at customer sites. E-Synergy also would allow for
online distributor training.
Meanwhile, NetSuite 9.0 encompasses a wide range of
online business operations including CRM, accounting, payroll,
warehousing, product assembly, and HR. It easily accommodates customer
and vendor portals, and features UPS shipment integration. It’s
targeted to mid-sized enterprises with fewer than 500 employees.
These companies are discovering, like it or not, that
their largest business partners are demanding that they become part of
an online supply chain, notes Sean Rollings, senior director of product
marketing at San Mateo, Calif.-based NetSuite. Oftentimes strapped for
cash and/or IT resources, they are “struggling” to keep up with these
demands—a situation NetSuite is looking to remedy with its monthly subscription fee schedule.
Integration is the key, according to Rollings. Too many
companies have disparate pieces of software, each addressing a
different aspect of the supply chain. Successful SCM, however, requires
“not only having the information available, but making it easy to use.”
Earth Computer Technologies, a manufacturer and
distributor of LCDs and related products, based in San Juan Capistrano,
Calif., was out shopping for “an all-inclusive solution” a couple of
years ago, recalls general manager Steve Cipolla.
It had just moved into a 30,000-square-foot building
with office, lab, and warehouse areas, and was expanding its sales,
management, and engineering staffs. Annual revenues had reached $5
million, yet the company was getting by on a mixture of Peachtree for
business management, Act and TeleMagic for customer support, and the
Wells Fargo eStore service.
“We do a lot of small transactions, and we have a lot
of new customers each month,” says Cipolla. However, because there was
next to no systems integration, “We were duplicating a lot of
[customer] entries.” Also, orders submitted over the Web had to be
re-keyed into Peachtree.
Clearly, “We needed to better track profitability”—what
was selling, and to whom. The situation was complicated in that LCD
inventories needed to be identified not only by part number but also by
condition (used, untested, scratched, etc.). Additionally, the company
required an online solution since management wanted to be able to
access financial information remotely.
Enter IT4MyBusiness.com, a NetSuite solution provider
headquartered in Rancho Santa Margarita, Calif. “We pretty much did a
full conversion for them, except for the Web storefront”—and that’s in
the works, notes managing partner Erik Ellsworth.
What Earth Computer is getting is a full-blown SCM
solution, which will save them “tremendous amounts of time,” he says.
He offers this advice: “The key to running a supply chain logistics
system is planning up-front.” He might also have mentioned patience.
After much discussion with the client, IT4MyBusiness would run a series
of pilots, and then “readjust and re-evaluate” what was needed, in a
carefully phased approach.
To illustrate Best Software’s commitment to SCM, Butler
offers the example of Kellogg Garden Products, a $40 million supplier
of organic soil additives and fertilizers, which has four warehouses
and a distribution subsidiary. Using MAS 500, it can track inventory
vouchers against receipts, and record goods when sold. “Inventory
replenishment at our distribution site is so much more efficient that
we’ve reduced our workload by 80 percent,” says assistant treasurer
Janet O’Neal.
But that’s not all. With the assist of Best reseller
NexTec Group, headquartered in Houston, Kellogg can now capture the
overhead costs associated with each of 300 different products due to
MAS 500’s Advanced Manufacturing module. “Whereas before we had to
guess about profitability, now we have detailed information,” comments
O’Neal.
MAS 500’s Business Alerts module, meanwhile, notifies
sales reps via their cell phones whenever a customer has an urgent
problem, such as a credit hold. “We also use the module to flag the
management team on especially large checks or purchase orders,” notes
O’Neal. Plans call for adding the Web-based eExecutive, giving
management a real-time snapshot of financial status, and eSaleforce, so
the sales staff can access account data on their laptops.
“There seem to be as many definitions of SCM as
companies utilizing it,” states Ruth Menter, president of Macdonald
Consulting Group, a Best reseller headquartered in Atlanta. “A common
thread, however, is the careful tracking and management of inventories
as closely tied to sales. And since most constituents in a company’s
supply chain are global and operating their businesses on disparate
systems, Web technology is a critical tool.”
She cites one customer, a “technology-savvy” textile
distributor, which recognized they needed real-time inventory data
(shipment dates, locations, etc.) to stay competitive in the
“fast-paced” apparel industry. Menter continues, “Their goal was met
with the development of a Web-based portal through which the
constituents in their supply chain could update specific inventory and
order information.” This portal, in turn, links with the back-office
distribution modules to further cut down on redundant data entry.
Accpac business partner Joe Santoro, president of
Synergy Plus Solutions with headquarters in Troy, Mich., says Web
enablement is becoming a critical element in most SCM installs. “It’s
an important component now because a lot of our clients have customers
who are requiring the ability to order products over the Web,” he says.
Other customers recognize the efficiency—and contribution to the
balance sheet—of being able to process an order remotely while still at
the customer’s site.
Santoro sums up: “The advantage for the client in having a fully integrated solution is a huge return on investment.”
Richard McCausland is Senior Editor of Accounting Technology and can be reached at richard.mccausland@thomsonmedia.com
February 2004
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