Published on the 17/08/2017 | Written by
AT A GLANCE
- Warehouse, Distribution, Retail
- Gain visibility across the full business
- Full systems modernisation and replacement
- Eliminate paper and manual processes
- SAP Business One ERP, Accellos Warehouse Management and Magenta POS implemented by Inecom Technology Partners
- On-time, on-budget big-bang cutover
- Reduced administrative resourcing
- Significant gains in DIFOT
- Ongoing improvements building system longevity
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Unlike fine wine, business systems don’t tend to get better with age. That’s the fundamental reason why Lombard The Paper People, a Melbourne family-owned business with interests in party and food packaging supplies and display merchandise, went to market to find better software to run its national operations. It found the answer to its challenges with Inecom and SAP’s Business One solution, which, after a practically flawless implementation, has transformed the business from paper-heavy, to digitally slick. Unafraid of a challenge, the company didn’t just change its back-end systems, but simultaneously upgraded its warehouse and point of sale solutions, too.
Lombard The Paper People is an Australian family owned business which was founded 1969. It specialises in hospitality food packaging products, party supplies and exclusive licensed display merchandise and decorations for all major events. It handles a hugely diverse product range from Wonder Woman costumes to official bunting packs for the State of Origin series to bathroom supplies for the Olympics.
Remarkably, the 50-year old company found itself still relying on a 40-year old legacy system at its core, explains Michelle Kevill, special projects manager at Lombard The Paper People. “We just hadn’t updated for a very long time, but the business had grown substantially from its early days. We have a warehouse, where pickers would put orders together with nothing more sophisticated than a piece of paper. We have four distribution centres across Australia, and each of those was operating somewhat independently, with no central integration. And on top of that, we have 14 retail outlets which were working on an altogether separate system.”
What that meant in practice, she says, was a lack of visibility across the enterprise – and, providing insight into the complexity of the business, Kevill says some 10,000 invoices per month were being processed each month on paper on the distribution side. There were a further 45,000 per month through the retail system. “You can imagine what that meant. Lots and lots of spreadsheets, lots of manual calculations and a lot of administrative work.”
This situation was effectively placing a stranglehold on Lombard, restricting its ability to move forward. “We knew it was time for a change, so we went to market to see what was available,” she relates.
The process of seeking a new solution was, in many respects, akin to interviewing for a new employee. Kevill says a comprehensive approach was taken, including assessing the latest offering from the incumbent vendor, as well as the broader market.
What stood out for Lombard The Paper People when Inecom made its pitch, wasn’t the SAP Business One software – at least not initially. “More importantly, at that stage, was that Inecom demonstrated an understanding of our business. We are quite complex, with distribution and retail shops, as well as other quirky things that combine into the greater whole,” says Kevill.
However, she adds, with a 40-year legacy, and an expectation that whatever replacement was selected should offer similar longevity, the software choice soon ascended the priority list. “We wanted to see the software in action, something Inecom was able to facilitate. After spending some time at reference sites to make sure Business One would suit our company, we made the decision to go with it.”
This process took the better part of a year, reflecting the care which must go into entering a long-term relationship; Kevill also stresses the necessity for careful choice of implementation partner. “That’s essential. If you don’t have that partnership and a clear understanding of the level of support needed for a major systems overhaul, it just won’t go very well.”
Just because one major systems upgrade isn’t already hard enough, Lombard decided to upgrade its warehouse management system and point of sale (POS) systems at the same time.
Kevill agrees that this was an ambitious plan. “In addition to Business One, we wanted to bring the warehouse up to date with Accellos; modernise POS with Magenta POS; and have the lot fully integrated with SAP. The scope was huge. Most would do it in stages, but we thought, ‘why not do it all in one go’. A lot of that confidence came from working with Inecom, which provided and stuck to strict timelines and milestones for the combined project.”
Inecom handled both the SAP Business One and Accellos implementation, integrating these solutions as well as working closely with the Magenta team to ensure integration of the POS solution with the ERP and warehouse management systems.
Remarkably, the projects were brought together on time and within budget, over the course of the better part of a year. “That’s testament of the Inecom team’s willingness to make themselves available whenever it was required, for as long as required to meet deadlines,” Kevill adds.
There are precious few ERP implementations on which the ‘go live’ is a completely smooth process. Yet, despite the scope, Kevill says that’s just precisely what happened at Lombard, when the system went live. “We switched it on and with a few minor tweaks, it was operating. All processes were working – POS, ERP, the warehouse. We’d gone from being an intensely paper-centric business, to practically paperless in one year without a hitch and with no downtime at go-live.”
The keys to success lay in preparation, says Kevill, and in a sharp focus on change management which ensured every staff member knew how the system works (and why it works that way) from day one. “We have some people who have been with us for 30 years. A lot of internal and external, at Inecom, courses were taken to make sure that everyone was comfortable with the move.”
What’s changed for Lombard The Paper People, Kevill says, is that business processes are executed reliably and with repeatability. “SAP drives discipline within the business. Once a business process is set up, you can’t work around it. That’s good because it means things are done the proper way.”
This is an essential consideration for companies which want to scale. It also provides assurance and traceability of all actions and transactions. Kevill also draws attention to data integrity. “This improved greatly once SAP was implemented. Accurate on-hand inventory was something our sales staff struggled with but with the new system in place, trust in the data was embraced.”
“[Data integrity] improved greatly once SAP was implemented. Accurate on-hand inventory was something our sales staff struggled with but with the new system in place, trust in the data was embraced.”
But perhaps most crucially, the company’s operations have gone from practically opaque, to entirely visible across the entire business. “From the warehouse, to the distribution centres, to reps on the road, everyone can see everything that is relevant to the tasks they are busy with. The integration of our systems has delivered a huge benefit. There is no need to collate information into spreadsheets, it is all there in a single system, with full reporting capabilities to see inventory, margins, sales, sales history for individual items,” Kevill enthuses.
While she says extra hands were needed on deck at go-live, once the system settled in, staffing requirements have dropped; meanwhile, the similarity in the Business One system for various roles within the business means workers can perform multiple roles with no retraining required. “That means we are saving on ongoing overheads. What’s more, the flexibility of the system allows for the company to grow as we no longer encounter issues with adding users – and we’ve seen that with Inecom, we can tweak the system to suit growth or changes in circumstances.”
Pinpointing the warehouse, which Inecom has brought into the 21st century with Accellos, she says the benefits of a paperless process cannot be extolled highly enough. “By scanning items, we’ve eliminated errors and credit notes, picking is far more accurate and our ability to hit DIFOT [delivery in full on time] targets has shot up dramatically.”
Across the entire system, Kevill says the overall result is a system, now well proven, which equips the business to operate more efficiently and effectively. “We can set and manage KPIs across the organisation as we can see what is going on, whether that is pick rates, processing times for purchase orders, or tracking the movement of goods from suppliers through to customers. Before, those metrics just weren’t available. Now, we can run reports with complete insights. It’s incredible.”
Inecom, says Kevill, has remained integral to the success of Lombard’s business systems. “Their continual involvement is invaluable and has seen the introduction of multiple innovations and tweaks over the years, including a client portal and EDI systems so they can send files directly into our SAP system. Because they know our business so well, they come up with ideas of what can work for us. That’s an evolution which we expect to continue for the life of the software – and we expect the software to last a good long time. Maybe the next 40 years,” she concludes.