How did a manufacturer of spars and rigging for racing yachts improve business efficiencies and enhance its access to valuable, real-time data to inform its critical business decisions? By Vince Randall, Regional Vice-President at Epicor Software, ANZ.
According to a recent survey, nine out of ten organisations across the globe were left exposed to significant business dangers in 2015 due to the impact of unplanned growth. The business leaders surveyed readily admitted that they often fear the consequences of growth.
Some 45% said that they worry their business might take on large or complex projects they do not have the skillset and technology to deliver effectively, as a result of growth that hasn’t been planned for properly. A majority of business leaders believe that in order to adequately prepare for growth they need to have an effective and integrated IT infrastructure in place. This holds true in Australia, with 70% of businesses believing a solid technology system is essential.
These statistics reflect recent comments from, and discussions Epicor has had with, business leaders across a range of industries. One particular customer, a wholesaler that was a ‘power user’ of one of our legacy enterprise resource planning (ERP) platforms dating back to the mid-1980s acknowledged the software had outlived its purpose as far back as 2002. He finally upgraded in 2014.
What this business owner would tell you today is, had he replaced his ERP platform four years earlier it would have already paid for itself multiple times over through increased efficiency, reduced labour and inventory expenses, and improved customer satisfaction. The adoption of new technologies plays a critical role in placing organisations in a position to reap the benefits of newfound efficiencies and pave the way for growth.
Southern Spars, a manufacturer of a unique kind, has a similar story to tell. Headquartered in Auckland, New Zealand, Southern Spars’ operations extend to the USA, Denmark, South Africa, Spain and Sri Lanka.
Preparing for growth
With more than 25 years in business, Southern Spars is a high-tech spar and rigging manufacturer for top racing yachts and the company prides itself on being at the leading edge of technology within its industry. Its expertise was forged during a major industry transition in the early 1990s from aluminium to carbon fibre spars. Southern Spars was quick to make use of the strong yet light material and has since built its company upon an ethos of pushing the boundaries and continuing to innovate.
A few years ago Southern Spars realised it was at a critical juncture and needed to take steps to properly prepare itself for future growth. At the crux of this was a technology upgrade.
“Our old ERP solution was good at the time we selected and implemented it, but we hadn’t upgraded to the latest and greatest available,” said Daniel Malherbe, Group Chief Financial Officer for Southern Spars.
The business had grown to a stage where the management team wanted to leverage the capabilities of new business management tools on the market with more sophisticated features and functionality. Virtually every aspect of a Southern Spars rig is handled in-house, beginning on the design floor where 27 designers and engineers work on each project, so it was critical that they were able to access information as and when needed to operate as efficiently as possible.
“We were making decisions based on the information we were able to get from the outdated system,” said Malherbe. “It allowed us to do our job well and we were still getting it right for our customers, but we needed to be able to make better informed decisions for our own business.
“We found we were basing our decisions on a ‘gut feel’ about certain areas of the business because we didn’t have easy access to all the data. There was information we couldn’t readily access and analyse, or at least to do so was unnecessarily time-consuming and laborious.”
Time to upgrade
The catalyst for the upgrade was combined feedback from across the company. The CFO wanted to delve further into the numbers and records to obtain a thorough overview of operational and financial information but this was taking longer than it should. The wider employee base also fed back that they wanted a new ERP system, as the old one had become a struggle. With employees now asking for a modern ERP system, the push to upgrade was even stronger.
“We investigated a range of options,” said Malherbe. “Epicor was serving us well but we invited a few vendors to do demos, spoke to external consultants to seek their opinions and the general consensus was in favour of continuing with Epicor and upgrading to its latest ERP offering. Deciding that we will continue to use Epicor ERP was a no-brainer for us. It’s not an old legacy-based system. Epicor is always pushing the boundaries and adding more technology to take its customers and their businesses to the next level.”
Unlike transaction-based legacy systems, unlimited access to business data in a modern, open database environment can give employees the ability to analyse, providing real-time information to make better decisions and call out exceptions. This can lead to improved customer service and growth.
“Since the implementation, we’ve been working through phases of automating activities, modernising procedures, and buying additional modules like Advance Print Management (APM),” said Malherbe. “We’re also planning to integrate mobility options in 2017.”
Epicor ERP has given Southern Spars the ability to access the data it wants, when it wants. That, coupled with automation capabilities, has already saved over 400 man-hours a year. The benefits of the upgrade have been enjoyed across the organisation. The design team is excited about what the new system can do for them. The accounts payable team now has a more simplified workflow thanks to a traffic light system showing the status of each line item on a purchase order so they know whether or not to process a specific invoice, saving time and effort. And the finance department is able to create reports and dashboards without needing a programming background.
As for future plans, Malherbe knows that in order to realise the full benefits of its new ERP system and ensure maximum return on investment, Southern Spars needs to continually work with, and explore its capabilities.
“There are components and modules we plan to add over time, when it makes sense to do so,” he explained. “The system is flexible enough to allow us to capture data in a way that is familiar to us; in a way that makes sense for our day-to-day business. Now we know accurate, relevant information is available to staff from the shop floor to the back office.”
In a very real, tangible way, Southern Spars is leveraging upgraded, modernised technology to help it grow effectively and in an intentional way, and in the process the company is becoming better prepared for growth.
Photo credit: ©iStockphoto.com/nikitje.