Eureka Lighting
Lighting Manufacturer Uses ERP Solution to Shine Light on Inventory, Reduce Costs
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Company Overview
For many homeowners, interior decoration once meant little more than choosing a paint colour. But times have changed. Today, home decorating is a national pastime, evidenced by the countless television shows, magazines, and books available to help style-conscious homeowners give their rooms a facelift.
Business Challenge
Few know the popularity of home décor better than companies that manufacture household goods and services. Among these companies is Eureka Lighting, a fast-growing supplier of designer light fixtures to architects and interior design firms. As a relative newcomer to the industry, Montreal-based Eureka prides itself on being different, offering its customers “European design for a North American price.” Eureka also strives to be more flexible and customer-friendly than its competition.
“Our true value lies in delivering quality and attractive products to customers as quickly as possible. Because we specialize in made-to-order products and can literally sell whatever a customer wants us to make for them, we need to be flexible, innovative, and have an ability to deliver quickly,” says Patrick Foley, Vice President of Operations, Eureka Lighting.
After opening its doors in 1987, Eureka soon saw results. At one point, sales revenue jumped 40 percent in a single year. But with that growth came new pressures on its inventory requirements. With millions of different product possibilities, Eureka’s dependence on precise inventory figures is impossible to overstate. Despite this, Eureka had no reliable enterprise resource planning (ERP) software solution in place that could accurately track what it had in stock. As a result, inventory was steadily growing, with much of it sitting unused so long that it had become obsolete. Eureka relied on staff to manually track inventory, patrolling the warehouse with pen and paper in search of needed parts. This made it difficult to estimate delivery times. Orders were also taking longer to fulfill, and customer delivery times became less predictable.
Business reporting was also nonexistent. Plant floor staff, managers, and partners lacked a clear, centralized view of the number and status of orders, and the means to easily adjust them on the fly.
“Staff on our shop floor had to rely on our customer product catalog and static bills of materials or assembly drawings printed on paper. Given the number of product changes or improvements that occur, employees had to literally guess what the components of a particular order would be. Then they would ask staff to pick inventory. But that picking wasn’t being tracked. This had an impact on everyone from our accounting staff to our employees on the floor. We managed all this as best we could when we were a small company, but as we began to grow, it became increasingly difficult,” Foley says.
When Eureka’s impressive revenue growth began to stabilize, the company decided to modernize its entire business process workflow. After considering a range of software options from companies like SAP and Epicor, Eureka turned to Fullscope, a Microsoft® Gold Certified Partner, to help it implement a Microsoft software–based solution.
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Solution
Fullscope analyzed Eureka’s needs and saw that the company needed a system that would automatically track Eureka’s workflow. Since Eureka’s business hinges on inventory, the system would have to give everyone an exact picture of its stock. This would help sales staff to make correct delivery assessments for customers, give plant floor staff insight into what was needed, and even smooth the process of accounts payable and receivable.
To achieve this, Fullscope implemented a new companywide solution based on Microsoft Dynamics AX, formerly Microsoft Business Solutions–Axapta®. Dynamics AX is an ERP software solution designed to serve the needs of the manufacturing and wholesale distribution industries.
“We were impressed by how easy it was to customize Microsoft Dynamics AX. ERP is a major investment and a very serious decision for a company like ours. We needed to make sure the solution we chose worked exactly the way we wanted. Using Microsoft Dynamics AX, we can leverage the market expertise we’ve built over 15 years and make it flexible and responsive to our needs,” says Foley.
Fullscope employed the Microsoft Dynamics AX financial, customer relationship management (CRM), and supply chain management features, including the Product Builder and Enterprise Portal applications, on a single server. In addition Fullscope installed a module of its own design for quality reporting and nonconformance tracking, called Total Quality Management. The Microsoft Dynamics AX application currently handles 50 concurrent users. Microsoft SQL Server™ 2000, which runs on the Microsoft Windows Server™ 2003 operating system, was set up to act as the central data repository. SQL Server and Windows Server are both part of Microsoft Windows Server System™ integrated server software.
The portal and tracking system integrates with a range of critical third-party solutions, most notably those that link to courier and shipping firms for shipment status tracking. With it, dealers can also log on to a secure transactional Web site to generate personalized quotations, build their own configured lighting fixtures, and receive a picture of the end product with the price.
Near-seamless integration with the Microsoft Office Outlook® messaging and collaboration client software also enables order updates or status reports to be sent by e-mail to the appropriate contact’s desktop.
Business Benefits
Since implementing the Microsoft Dynamics AX solution, Eureka has been able to cut its inventory load and reduce customer delivery times. Employees are able to view up-to-date stock and order information and make adjustments based on real-time information, not on calculated guesses. This has led to much faster order fulfillment times. That, plus the ability for customers to now access the same real-time order data and configured quotation capabilities from Eureka’s Web site has greatly increased customer satisfaction rates.
Streamlined Operations
When Eureka staff receives an order, the order immediately goes into Microsoft Dynamics AX. Production personnel can instantly view the order details and know exactly what to do. The customer can easily track the order status from that point forward through a Web link into the system. Commercial invoices are automatically generated at the time of product shipments. Using the document management module for Microsoft Dynamics AX, staff can also arrange for invoices to be automatically sent by e-mail or fax, depending on the customer’s wishes.
“Today, everything we do is automatic. Every time we find a manual process, we turn to AX to simplify it—to help make it easier and to avoid the chance for error. Even staff that has no insight into a particular order can move it forward. It’s bulletproof,” says Foley.
Reduced Operating Costs
Prior to implementing the Microsoft Dynamics AX solution, eight dedicated staff members were needed to manually oversee the inventory cycle count, procurement, and distribution process. Four of those staff members have since been reassigned to more strategic areas of the company.
With the clear view of inventory that Microsoft Dynamics AX helps to provide, Eureka has also been able to shave nearly CDN$2 million in inventory costs since the solution went live, including permanently ridding itself of CDN$800,000 in obsolete parts. The company has also been able to reduce its staff time spent on administration tasks such as hunting for inventory and tracking orders by 20 percent.
“[Microsoft] Dynamics AX has helped to make our organization much more efficient, and that saves us time and money. We’ve been able to focus more attention on growing our company and helping our customers,” says Foley.
Faster Turnaround Times
Eureka worked hard to fulfill customer orders within 10 days—a yardstick that was becoming nearly impossible for the company to measure itself against. Today, Eureka is shipping 85 percent of its made-to-order items in less than 10 days, even faster for ready-made items. These are figures that are rarely achieved in the made-to-order business.
“We used to have to engage in a lot of dialogue with our customers, explaining why orders were going to come in late. But in recent months, our sales and customer meetings are a breeze. The emphasis has shifted away from customer order times to increasing our sales and adding value for the customer,” says Foley.
Microsoft Dynamics
Microsoft Dynamics is a line of financial, customer relationship and supply chain management solutions that helps businesses work more effectively. Delivered through a network of channel partners providing specialised services, these integrated, adaptable business management solutions work like and with familiar Microsoft software to streamline processes across an entire business.
For more information about Microsoft Dynamics, go to:http://www.microsoft.com/canada/dynamics/default.mspx
For More Information
For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: www.microsoft.com
For more information about Fullscope products and services, call (256) 771-7050 or visit the Web site at: www.fullscope.com
For more information about Eureka Lighting products and services, call (514) 385.3515 or visit the Web site at: www.eurekalighting.com
