Avanade Deploys Business Management Solution that Delivers Competitive Edge for ShoreMaster

Transcription

1 AVANADE CASE STUDY Avanade Deploys Business Management Solution that Delivers Competitive Edge for ShoreMaster With Microsoft Dynamics AX, Dock Manufacturer Gains Business Insight, Unifies Operations, and Cuts Costs to Deliver Unique, Customized Products ShoreMaster has a complex business model that includes different products, locations, and manufacturing facilities. Its original enterprise resource planning solution lacked the flexibility to map to these operations, resulting in a fragmented picture of global financial health and a poor understanding of inventory, supplier goods, and customer orders. After partnering with Avanade to deploy Microsoft Dynamics AX business software, ShoreMaster consolidated operations under one cost-effective solution. Staff can perform strategic planning based on consolidated accurate data, reduce inventory costs, and streamline operations to build customized installations that give ShoreMaster a competitive advantage. OVERVIEW Industry Manufacturing Geography Americas Solution Summary ShoreMaster partnered with Avanade to replace an outdated financial management solution with Microsoft Dynamics AX. Technology Microsoft Dynamics AX 4.0 Benefits Consolidated disparate operations under one business solution Avoided approximately U.S.$500,000 in costs by meeting deployment deadline Gained valuable business insight Reduced inventory costs Cut month-end closing by 2 business days Improved project management Enabled strategic business planning 1

2 CUSTOMER BACKGROUND SHOREMASTER Headquartered in Fergus Falls, Minnesota, ShoreMaster offers a line of residential docks and lifts to help people enjoy the waterfront. The company offers a range of boat lifts, lift accessories, docks, and dock accessories, and water toys, such as swim rafts, inflatable slides, and hydro bikes. Commercial marina systems built by ShoreMaster are found throughout the Americas, and its custom-built dock installations range from local fishing piers to 300-slip marinas. Today, it operates manufacturing facilities in Fergus Falls and Pine River, Minnesota; Camdenton and Montreal, Missouri; and St. Augustine, Florida. ShoreMaster is owned by Otter Tail Corporation (OTC) and has 315 employees. In 1992, the company was worth U.S.$7 million. Today, it is valued at $70 million. BUSINESS CHALLENGE ShoreMaster began operations in 1972 in Carlos, Minnesota, selling aluminum boat lifts. Since then, the company has grown rapidly and now consists of three business segments: residential, which manufactures and sells docks and boat lifts to homeowners; waterfront, which sells towable products, water trampolines, and other inflatable equipment; and commercial, which manufactures and installs large marinas. The residential and waterfront businesses fall under a discreet manufacturing model, with products sold by more than 260 dealers. The commercial side is handled by seven sales representatives, with products strictly engineered to order. ShoreMaster grew by acquisition, resulting in an array of financial, manufacturing, and supply chain business applications. Residential and commercial products are manufactured in both the Camdenton and Fergus Falls locations, while St. Augustine is only commercial. However, each business segment had its own method of numbering parts and naming customers and suppliers. A residential dock manufactured in Fergus Falls would have one set of assigned numbers, while the same dock in Camdenton would have another, even though both docks were built in Fergus Falls. ShoreMaster implemented an enterprise resource planning (ERP) system in 1992 called Intuitive ERP, but expanding product lines, increasing facilities, and diverse business models proved too complex for the software. We simply outgrew our original ERP solution, says Dennis Kostrzewski, President of ShoreMaster. It wasn t flexible enough to incorporate our multiple locations and businesses. Our large marina project required advanced integrated project management and billing functions. Quite simply, we had lost faith in its ability to carry our business forward. Consequently, ShoreMaster did not have an integrated, efficient method of managing financial results, inventory, supplier goods, or customer orders. With so many businesses to manage, closing the books at the end of each month required a protracted manual process of compiling and consolidating spreadsheets. We had little control over inventory costs on the residential side and our materials resource planning was rudimentary, says Jackie Edwards, Software Implementation Inventory Management for the ShoreMaster Camdenton facility. We only accounted for parts and labor, so our inventory evaluation was inaccurate, and we didn t use forecasting or strategic planning. We even experienced negative Our first meeting with Avanade confirmed that they were a great group of people. They did many demonstrations and were more than willing to bring all the information to the table. We were impressed with their deep expertise and experience. Dennis Kostrzewski President, ShoreMaster 2009 Avanade Inc. All Rights Reserved. The Avanade name and logo are registered trademarks in the US and other countries. 2

3 inventory at our Camdenton facility. On the commercial side, ShoreMaster staff devised manual methods for project accounting, which involved consolidating spreadsheets of materials to create purchase orders. Staff also manually tracked hours and labor costs for installation crews, and then imported the data into a separate payroll solution. The management team at ShoreMaster wanted to grow the business, but it was clear they needed a new ERP solution. Costs associated with inventory management and materials resource planning were unreasonably high. Even customer estimates were difficult to determine with accuracy. For any major software investment, we look at our own business practices and evaluate how the software fits, says Kostrzewski. We determined three critical factors when we started looking for a replacement ERP solution. We wanted software that would be flexible enough to encompass all our businesses at all our locations. We are a small IT staff of 3, so we wanted a solution that we could manage ourselves. And we wanted to partner with a vendor that would continue to push the envelope and develop new functionality that would give us long-term value. Avanade did a great job in helping us manage change, at the same time configuring the software to meet our needs. Their deep functional knowledge of Microsoft Dynamics AX meant they always had an answer to our questions, or a recommendation for best practices based on market experience. Jesse Swenson IT Director, ShoreMaster THE SOLUTION After considering several solutions, including ones from SAP and Oracle, ShoreMaster chose to partner with Avanade to implement Microsoft Dynamics AX business software. The ShoreMaster team felt comfortable that Microsoft would continue to innovate the software to keep pace with the company s growth. Oracle was the most expensive to maintain, and we saw SAP as an older technology, says Kostrzewski. By contrast, Microsoft Dynamics AX is a flexible, easy-to-use solution with a lower total cost of ownership. ShoreMaster s decision was bolstered by a successful deployment of Microsoft Dynamics AX in another OTC company, also implemented by Avanade. ShoreMaster met with Avanade to talk about deploying a single instance of Microsoft Dynamics AX to help manage the company s operations collectively, while still supporting individual business lines across multiple locations. Our first meeting with Avanade confirmed that they were a great group of people, says Kostrzewski. They did many demonstrations and were more than willing to bring all the information to the table. We were impressed with their deep expertise and experience. Our 10-member executive team voted unanimously for the Microsoft Dynamics AX solution with Avanade as the integration partner. For this project, Avanade faced a spring deadline to ensure that ShoreMaster would be up and running on the new business management solution before the company s busy summer season, starting in March. The Avanade team began the implementation in mid-september 2007 and the project went live in March We were concerned about the deadline because if we weren t ready, we would have to forfeit the project, write off the costs, and start again the following spring, says Kostrzewski. But early on, the Avanade team demonstrated a willingness to get the resources required to achieve our objectives. We started with our two biggest operations, Fergus Falls and Camdenton. We had originally asked the Camdenton team to come up to Fergus Falls for the training and migration, but this proved too disruptive. So Avanade stepped in and added extra resources to split the team and work concurrently in the two locations. We got the job done on time Avanade Inc. All Rights Reserved. The Avanade name and logo are registered trademarks in the US and other countries. 3

4 In just seven months, Avanade and ShoreMaster accomplished a great deal configuring, testing, and deploying 25 different Microsoft Dynamics AX modules. These include Financials, Intercompany, Project, Production, Sales Management, and Master Planning modules. They also introduced the Dynamics AX intracompany transfer methodology. Avanade worked with the ShoreMaster implementation team members to help them understand the software and analyze how to align the company s business processes with the best practices built into Microsoft Dynamics AX. Avanade did a great job in helping us manage change, at the same time configuring the software to meet our needs, says Jesse Swenson, IT Director at ShoreMaster. Their deep functional knowledge of Microsoft Dynamics AX meant they always had an answer to our questions, or a recommendation based on market experience. This helped us achieve the right amount of business change required to optimize the capabilities of the software. AVANADE VALUE Partnering with Avanade brought market-proven expertise in Microsoft Dynamics AX integration to ShoreMaster, driving an efficient engagement that delivered the maximum amount of functionality within a short time frame. And the close connection between Avanade and Microsoft ensures that ShoreMaster will remain at the forefront of that product s ongoing development. Results Realized Since going live with Microsoft Dynamics AX in March 2008, ShoreMaster has better control and understanding of its inventory. Now we include the labor and overhead that it takes to build a product in inventory evaluation. We have a better idea of the value of our inventory and the cost to build a product, explains Kostrzewski. With better control over our inventory and supplier goods, we expect to cut inventory costs. Finally, we can practice strategic sales planning based on accurate resources and inventory levels! At Camdenton, Edwards reports that the facility no longer goes into negative inventory. We use the alerts within Microsoft Dynamics AX to let us know when to take action. All it takes to get an accurate inventory picture is one click of the mouse, she says. ShoreMaster has also reduced month-end closing by two days using the integrated financials within Microsoft Dynamics AX. The commercial side of the business has implemented project-based accounting to improve efficiency and gain advanced project management and billing functions that integrate with the company s general accounting and payroll systems. Now the plant manager can build a bill of materials and drive purchase orders all from one system, says Edwards. The Project module tracks costs, labor, goods received, and what s completed, all through one interface. Innovative Solutions Every ERP deployment has its own unique challenges, some expected, some not. In this case, the ShoreMaster team encountered a seemingly impossible disconnect between the capabilities built into Microsoft Dynamics AX and the company s business processes. Luckily, the Avanade project lead was prepared with a solution. Microsoft Dynamics AX calculates the percentage of completion of a project based Our Avanade lead came up with a workaround that added one step to the process and we were back on track. It was a great example of creative thinking under pressure and underscores the level of expertise that Avanade brought to the table. Dennis Kostrzewski President, ShoreMaster 2009 Avanade Inc. All Rights Reserved. The Avanade name and logo are registered trademarks in the US and other countries. 4

5 on shipment, and we record percentage of completion based on production, not necessarily what we ship, says Kostrzewski. For 10 minutes, I thought this was a show stopper. Then our Avanade lead came up with a workaround that added one step to the process and we were back on track. It was a great example of creative thinking under pressure and underscores the level of expertise that Avanade brought to the table. Customer Focus Throughout the engagement, the Avanade team remained dedicated to the project, a commitment that ensured the solution went live by March 2008 for the busy season. By meeting this deadline, ShoreMaster saved approximately $500,000 in costs that would have been required to start the project over again the following year. The team put in a lot of extra hours; many nights we were up to two in the morning, recalls Edwards. And that support didn t stop at the end of the project. Even though Avanade had done a great job of bringing us up to the point where we could take on the deployment for our three remaining facilities, they were available by and phone when needed. Even though Avanade had done a great job of bringing us up to the point where we could take on the Microsoft Dynamics deployment for our three remaining facilities, they were available by and phone when needed. Jackie Edwards Software Implementation Inventory Management, ShoreMaster RESULTS Since deploying Microsoft Dynamics AX, ShoreMaster has evolved from a reactive, fragmented company with no integrated financial processes to a cohesive, efficient organization. Today, the company enjoys fully-integrated accounting that brings together its different manufacturing processes, locations, and product lines under one holistic management solution. The end result is that managers are no longer making business decisions based on gut feeling. Instead they are using accurate, up-to-the-minute data. With the Balanced Scorecard highlighting key metrics, including inventory levels, costs, purchases, and sales orders to provide a daily snapshot of global operations, management gains unprecedented visibility into the company s health. The scorecard is a huge part of our competitive advantage because we can watch operations daily, says Kostrzewski. It forms the basis of our Monday management meetings and alerts us to any anomalies so that we can fix them before too much damage ensues. The Avanade team was instrumental in helping ShoreMaster understand the benefits of how the system unifies the company s business operations. To optimize these benefits, it was important that the Camdenton and Fergus Falls staffs came to an agreement on the company s master data. Avanade consultants helped us overcome established, territorial ways of thinking between the residential and the commercial sides of the business so that we could focus on the benefits of a common operating model, says Swenson. We ve automated intracompany sales so that it s a straight inventory transfer. When Camdenton creates a purchase order for Fergus Falls, it automatically generates the same sales order on their side because the part numbers are the same. With a single instance of Microsoft Dynamics AX, ShoreMaster can manage the company s manufacturing business collectively, while supporting individual product lines across multiple locations. On the commercial side, we have three different plants that make three different products, says Kostrzewski. For example, Camdenton could produce a steel floating dock with aluminum gangways from Fergus Falls and concrete floating breakwaters from St. Augustine. With our newly normalized data and intracompany processes, Microsoft Dynamics AX will help us 2009 Avanade Inc. All Rights Reserved. The Avanade name and logo are registered trademarks in the US and other countries. 5

6 account for it all and stay in control. From a competitive standpoint, we can take advantage of this integration to offer a mixture of products and configurations that our competition can t. That s a long-term benefit that will take us through these tough times and into the future. About Avanade Avanade is a global IT consultancy dedicated to using the Microsoft environment to help enterprises achieve profitable growth. Through proven solutions that extend Microsoft technologies, Avanade helps enterprises increase revenue, reduce costs, and reinvest in innovation to gain competitive advantage. Avanade consultants deliver value according to each customer's requirements, timeline, and budget by combining insight, innovation, and the talent of our global workforce. Avanade, which is majority owned by Accenture, was founded in 2000 by Accenture and Microsoft Corp. Avanade has more than 9,000 professionals serving customers in 22 countries worldwide. Additional information can be found at Avanade Inc. All Rights Reserved. The Avanade name and logo are registered trademarks in the US and other countries. 6