Form-Rite

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Overhauling your core manufacturing, financial and distribution software is a major and critical project.  When it goes wrong, it can severely impact business performance and profitability.

Faced with an outdated ERP system, Form-Rite Australia, re-engineered all its business processes before implementing a new system using Microsoft Business Solutions-Axapta and integrator Eclipse Computing.

Privately-owned Form-Rite turns over $10 million annually and has a full time staff of 50.  The company specialises in general and medical plastic packaging and point-of-sale displays.

Harry Houston, General Manager of Form-Rite Australia holds firm views on ERP implementations.  “To implement a new ERP system without reviewing all your business processes is madness,” he said. “The business landscape is littered with the corpses of failed ERP implementations but companies continue to avoid doing the necessary homework on their business processes before they start an implementation.”

Before beginning its ERP implementation, Form-Rite’s staff worked together to review the company’s business operations.  They analysed, flow-charted and then re-structured the business processes as well as creating a ‘wish list’ of features the new ERP system should have.

Meeting time-critical delivery demands

Before selecting Microsoft Axapta, Form-Rite’s legacy system didn’t provide the company with clear visibility of inventory and product costs and its lack of integration created considerable additional planning and administration work.

“We work to at least 95% of all orders being delivered on the promised date.  Our competitive edge is that we consistently deliver on-time and at agreed quality levels.  With our old system, project management, manufacturing resource planning (MRP) and accounts were poorly integrated.  This made achieving our 95% delivery target labour-intensive at an administrative level,” said Houston.

With Axapta, Form-Rite re-organised its account structures to be more user-friendly and as there was better integration between business functions in the new ERP system, it was easier to streamline processes. 

Houston explained, “There was a significant reduction in sales order processing, purchasing and financial administration times as the new system generates a list of requirements for all orders, invoices and remittances.  We can now give an accurate date for delivery on a job within 24 hours of receiving an order.  We could not do this before.

“Additionally, we used to have eight indirect staff positions managing the administration and now we only have four.  We get our product out the door more efficiently and we’re able to be more price-competitive without sacrificing customer satisfaction.”

Industry understanding vs techno-babble

The project initially went to tender to approximately 15 ERP providers with only six making it to demonstration stage.  With the short list down to two, integrator Eclipse Computing won the contract to implement Microsoft-Axapta.  The decision was made on product flexibility, fit with the business and the manufacturing knowledge of Eclipse’s technical specialists.

“You can assume that all the IT consultants you deal with during the tender process have the technical knowledge to get the job done – regardless of the vendor they represent.  The important factor is whether your tech partner has people with real life logistics, sales and manufacturing experience,” said Houston.

“I wanted someone at the provider end who understood exactly how a business should run and why.  I wanted to deal with people who understood the key reports that a company needs - such as flexible sales analysis tools and actual versus standard product costing - without having to explain each one.  It reduces our workload enormously.

“Eclipse was good in that way as they had experts on the ground with practical manufacturing knowledge,” said Houston.

According to Houston, other key factors in choosing a technology integrator include: that they are big enough to provide adequate levels of service but not so big that you aren’t important to them; that they are easy-to-deal with; and, that they response quickly with the information you want when you want it.

Evaluation – use an external ERP guru

A critical factor in Form-Rite’s success was the use of an external consultant, Ray Atkinson of Raymond D. Atkinson and Associates, to help evaluate the different ERP systems that were tendered.

“A company our size, or even a company four to five times the size of Form-Rite, will not have an ERP guru on board.  We had 15 replies to our tender and having a third-party expert available to help was vital.  An independent consultant can also help you develop a realistic project timeline as they have experience with similar implementations and have no vested interests,” explained Houston.

Not rocket science

Houston identifies the following areas as key to the success of any ERP implementation:

1. Do an in-depth analysis of existing business processes.  Build a flow chart covering every aspect from receiving a customer query to receiving payment and all steps in between.  Review this and build your new model.
2. Choose your new ERP system for the functionality you’ll need in four to five years’ time.  Software cost is only 10-15% of the total project cost so go for the best fit and get the functionality you require.
3. Ensure your IT implementer and service partner has practical knowledge of business processes and manufacturing requirements and is committed to on-going service and training.
4. Have an external, experienced ERP specialist to assist in evaluation and advise on realistic project management, but not to do the work for you
5. Ensure that the senior management champion is totally committed to the project and understands the issues surrounding ERP.
6. Avoid modifications…your business isn’t that different!

Houston concluded, “Form-Rite did a lot of ground-work and planning which I believe led to our success.  A good ERP implementation need not be difficult, but it does take discipline and preparation.  Only four months after go-live, the system had become an invisible element of the organisational processes of our business and Eclipse had become a trusted support provider.  The only difference our staff noticed was that getting the job done was easier.”