AT A GLANCE
- Automotive parts warehouse & distribution
- Eliminate poor 3rd party integrations
- Rationalise ERP environment
- Improve alignment of ERP system with business requirements
- Eliminate spreadsheet reporting/planning.
- Re-implement and upgrade SAP BusinessOne using Agile methodology project by Oxygen
- Thoroughly assess business needs by engaging with users through series of requirements gathering workshops
- Retire existing third party software and incorporate core production processes within SAP functional footprint.
- Vastly improved inventory management
- Better sales and order forecasting
- Improved overall business performance visibility
- Time and cost savings thanks to more automated business processes.
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Saddled with an ineffective and poorly implemented ERP solution, automotive component assembler Dana Australia didn’t lose faith. Instead, it did some more homework and engaged another solution provider to optimise its systems and as a result, today enjoys a high-performance SAP Business One system, supported by Oxygen which underpins ongoing success.
A software implementation executed correctly, compared to one done poorly, is the difference between night and day, according to Andrew Moore, CFO for Dana Australia. “We should know because we have experienced the results of both,” he says. “What we have at our fingertips now, thanks to Oxygen, is vastly different to the weaknesses in our original SAP Business One implementation.”
With 23,000 staff around the world, and over US$6 billion in sales last year, Dana is recognised as a leader in both original and aftermarket automotive drivetrain parts and related sealing and thermal management technology.
The quality and performance of an ERP system depends to a very large extent on the manner in which it is implemented, as Moore has made clear. He says the original project was poorly conceived, led by finance and IT, with insufficient consultation with end users. Lack of ownership and poor training doomed the ambitious implementation.
“Unfortunately that implementation suffered from a number of issues, and we ended up having to heavily customise the system – as well as incorporate several third party software packages – to make our production and reporting work,” Moore confirms.
“We had to develop a lot of processes outside the core ERP system, and we were heavily reliant on external consultants for support because no-one within the business had a good grasp of the entire environment. As a result, no one had any faith in the numbers and reporting.”
“They had a radically different approach. They took the time to understand the fundamentals of our business from the bottom up.”
In 2014, Dana made the decision to re-implement its SAP Business One system in order to solve its IT predicament. Notably, Moore and Dana Australia didn’t blame the software, recognising that this was not the seat of the issue: “We wanted to continue with SAP, because globally that’s what Dana has mandated. But first, we needed a systems integrator that could peel back the original project and then deploy the latest version of SAP Business One in a way that matched our core needs.”
Moore says Oxygen was recommended as the right partner for the job. “They had a radically different approach. They took the time to understand the fundamentals of our business from the bottom up. They engaged at all levels of the organisation and they challenged users to re-examine how things were done in order to adopt best practices throughout the company.”
Oxygen commenced the project in 2014 and set about upgrading and rationalising Dana’s SAP Business One software. Part of that process was the removal of poorly conceived third party software integrations that plagued the initial 2011 implementation.
“After an extended but valuable period of consultation with all users, we had a defined implementation plan. It stripped out all of the third party software add-ons we originally implemented, which meant it removed our ongoing training issues with those products,” says Moore.
The first evidence of the success of Oxygen’s intervention was in the deliverables: the project was completed on time and within budget. But that’s not primarily a measure of value; instead, Dana Australia now has a fully integrated business management platform that is saving it time and money.
Moore says the latest version of SAP Business One is a mature product and accommodated all the functionality Dana needed. “Very little modification from the base system was needed. We took time to understand the solution and how it was going to be used and we made sure everyone within the business was 100% sure of what they were signing up to.”
A properly configured solution is proving its worth in many areas across the business; Moore says inventory management has improved to the point that it has delivered ‘a very significant cost saving for the business’. “Whereas previously we didn’t have visibility of materials, we now have complete awareness of the inventory – from overseas suppliers, right through to availability of parts on the assembly line,” he confirms.
Spreadsheets are eliminated, with all reporting done within the system, and Dana now has robust sales ordering and forecasting, enhancing material requirement planning processes. “Given the lead time for some of our materials is 16 weeks or more, we need to know exactly how much of our stock is allocated to existing orders. It’s a constant balancing act, between long lead time for inflow and fast outflow of assembled componentry,” says Moore.
Stock control has advanced significantly, with reduced inventory, revised stock categories and a substantial reduction in the need to air-freight. “Over the last two stock takes we have had very little in the way of loss. It has been a huge improvement,” he notes.
From a struggle with a curmudgeonly IT system, the company’s SAP Business One has quite literally gone from zero to hero, thanks to Oxygen: “Our global IT group now hold the project up as an example of excellence,” Moore concludes.