Coating Excellence International

Manufacturer Gains Real-Time Production Data, Reduces Licensing Costs by 15 Percent

Coating Excellence International (CEI) manufactures high-quality, flexible-packaging products using environmentally friendly practices. To continue to enhance its quality and efficiency, CEI needed to provide its shop-floor operators and business decision makers with real-time production metrics and analysis tools in a solution that was quick to deploy and easy to manage with limited resources. It upgraded to Microsoft Dynamics® AX 4.0, Microsoft® SQL Server® 2005, and Microsoft SQL Server 2008 Reporting Services, deployed Microsoft Dynamics CRM 4.0, and integrated those with its shop-floor application. As a result CEI enhanced its decision making and customer management tools. And by signing a Microsoft Volume Licensing Enterprise Agreement, it cut software license acquisition and management costs, set a predictable licensing cost per desktop, and gained Software Assurance benefits.

 

Situation

In 1997, Mike Nowak and seven other experienced packaging professionals saw a need for a flexible-packaging manufacturer that could deliver innovative products at a competitive price along with superior quality and service. The group formed Coating Excellence International (CEI), which grew rapidly in size and scope. Today, CEI, which is headquartered in Wrightstown, Wisconsin, has more than 650,000 square feet of manufacturing space and approximately 500 employees. The company offers a full range of package-manufacturing processes, including adhesive lamination, electron-beam coating, extrusion coating and lamination, woven bag manufacturing, high-quality water-based flexo printing on paper and film, and offset printing. Its products include everything from copier paper packaging and insulation facing to sugar pouches, for companies all over North America and in Mexico, South and Central America, and the United Kingdom. 

All CEI products are designed and manufactured using environmentally friendly business practices. The company’s use of clean production technologies, renewable resources, and recycling practices makes CEI a market leader in sustainable packaging products. In fact, 95 percent of CEI products are recyclable, which contributed to its being recognized by the state of Wisconsin as a Business Friend of the Environment.

The company’s innovative approach to package manufacturing and service has helped it achieve an average growth in sales of 20 percent a year over the last decade. That growth is leading CEI to add a second factory in the Cincinnati, Ohio, area which it plans to open in fall 2009. “With the additional plant we’re in a better position to service customers in other parts of the country,” says Mike Nowak, Chief Executive Officer for Coating Excellence International.

We estimate that we’re saving close to $45,000 annually in licensing costs with the Enterprise Agreement, which is at least a 15 percent savings over acquiring Open licenses a few at a time. Curt Nassen IT Manager, Coating Excellence International

The company started running its network infrastructure on Microsoft® software from the day it opened in 1997. By 2007 it had 11 servers running the Windows Server® 2003 Enterprise and Windows Server 2003 Standard operating systems. Four of those servers were running Microsoft Exchange Server 2007 in two clusters. It had a separate shop-floor system that collected all the data related to production operations, and CEI stored that data in a Microsoft SQL Server® database. In 2003, CEI implemented Microsoft Axapta 2.5 (now Microsoft Dynamics® AX) as its enterprise resource planning (ERP) system.

CEI employees also used Terminal Services in Windows Server 2003 to access the shop-floor application, Microsoft Axapta 2.5, and Microsoft Office Professional Edition 2003. However, there was no communication between Microsoft Axapta and the shop-floor application.

As part of its work to incorporate lean manufacturing practices, CEI wanted to provide its shop-floor operators and business decision makers with real-time data on production metrics such as run times, tension, and other information that affects the quality of the end product. “We wanted a shop-floor application that integrated an HMI [Human Machine Interface] layer directly with our PLCs [Programmable Logic Controllers] to provide real-time information to ensure that we maintain our high level of quality,” says Curt Nassen, IT Manager for Coating Excellence International.

“Our previous system did a good job of collecting data but then the data went into a box and people didn’t have ready access to it,” says Nowak. “One of the key things that we needed to do was to get real-time data to the people on the floor who are running equipment and making decisions minute to minute so we can do a better job of managing the business from the operators on up.”

In addition, CEI has a 15-person sales force that handles more than U.S.$190 million in annual sales. The company wanted to implement a customer relationship management (CRM) application to make it easier for those salespeople to efficiently take care of existing customers and attract new ones.

Because it had just a six-member IT staff and one onsite consultant from Microsoft Gold Certified Partner Heartland Business Systems, the solutions CEI chose needed to be quick to deploy and easy to manage with limited resources.

As it grew, CEI had acquired Microsoft software licenses a few at a time under the Microsoft Volume Licensing Open License program. By 2008, it had approximately 200 users, and management decided it was time to explore more cost-effective ways to acquire licenses. As CEI worked with Heartland to plan and deploy new technologies, the partner suggested that the company talk to SoftwareONE—a Microsoft Gold Certified Partner with the Licensing Solutions Competency—to learn about the available volume licensing options.

As a Microsoft Large Account Reseller, SoftwareONE offers strategic software licensing solutions, software asset management programs, and proactive account management to small, medium, and enterprise-level customers. The firm represents all the top software publishers and tailors comprehensive software licensing strategies directly to customer needs.

“Going forward we wanted a licensing strategy that would position us for current and future technology needs,” says Nassen. "We wanted to make sure that we keep up to date with products, while reducing the cost of acquiring and managing software licenses." 

Solution

Before deploying Microsoft Axapta 2.5 in 2003, CEI had conducted an in-depth evaluation of ERP systems including J.D. Edwards and Oracle and found that the implementation time and the acquisition cost made Microsoft Axapta the best choice for the company. In 2008, it took a cursory look at alternative solutions before deciding to upgrade to Microsoft Dynamics AX 4.0. “Based on price as well as on implementation time, we found that the increased scalability, performance, and integration with other systems made Microsoft Dynamics AX the best choice for us,” says Nassen.

CEI decided to upgrade to Microsoft Dynamics AX 4.0 in combination with replacing its shop-floor system with the Redhawk data collection system from Operon Systems. It took about four months to plan the upgrade and prepare the systems, including upgrading the server hardware to HP server hardware. By March 2009, the deployment team had added Microsoft Dynamics AX to the environment while continuing to run Microsoft Axapta 2.5 as it gradually transferred data from the old system to the new one. A SQL Server 2000 database cluster supported Axapta 2.5 and SQL Server 2005 database software supported Microsoft Dynamics AX. When the upgrade to Microsoft Dynamics AX is complete, all data will be consolidated on a SQL Server 2005 database.

CEI is also implementing SQL Server 2008 Reporting Services to run reports—based on data collected by Microsoft Dynamics AX—on inventory for the office administration staff, and on factory floor statistics for the operations staff. “Using SQL Server Reporting Services, operations managers will easily be able to track trends, and a range of statistics such as uptime, downtime, and footages of products on the factory floor,” says Nassen.

We can upgrade software that is covered under the Enterprise Agreement at no extra cost, and we can pay for the licenses over three years, which is a huge benefit. Curt Nassen IT Manager, Coating Excellence International

In addition, CEI deployed Microsoft Dynamics CRM 4.0 to provide its salespeople and customer service staff with an easy-to-use tool to access customer and product information in seconds. “We decided to go with Microsoft Dynamics CRM because it will integrate with both Microsoft Dynamics AX and Redhawk and because it gives us a lot of functionality such as consolidating customer contact information, managing new business leads, and more effectively coordinating activities to retain existing business,” says Nassen.

The network also includes two Windows Server 2003 Terminal Services implementations—one for administrative workers to access Microsoft Office applications and Microsoft Dynamics AX data, and one for accessing the previous shop floor application. The second Terminal Services implementation will be phased out when the Redhawk shop floor application is fully deployed. 

The IT department uses Microsoft System Center Configuration Manager 2007 to deploy servers and manage software updates, and it is looking at the possibility of installing Microsoft Systems Center Operations Manager to monitor and maintain the health of the entire IT environment.

CEI has approximately 70 portable computers for senior management. In addition, the company has approximately 80 Wyse terminals for administrative employees and another 50 Wyse terminals for the shop floor, all running Windows Server 2003 Terminal Services. When the current deployment projects are complete, all 200 users will have access to Microsoft Office Professional Edition 2003 or Microsoft Office Professional 2007, the Redhawk shop-floor application, the Windows® Internet Explorer® Internet browser, and Microsoft Dynamics AX.

After the Microsoft Dynamics AX upgrade is complete, CEI plans to deploy Microsoft Office SharePoint® Server 2007 to create a fully integrated portal for sales, customer service, and other key business units to use for access to corporate resources and collaboration tools. The portal will also provide decision makers with access to real-time operations data customized for the requirements of each business unit. 

As CEI made plans to upgrade existing software and implement new technologies, Nassen worked with SoftwareONE to decide on the most appropriate Microsoft Volume Licensing program. “We did a licensing analysis of all the Microsoft software they had in place as well as planned deployments, such as Office SharePoint Server 2007,” says Dave Stangel, Business Development Manager for SoftwareONE. “Then we provided them with a six-year cost comparison between acquiring licenses through a Microsoft Volume Licensing Enterprise Agreement and through the Open License program.”

That comparison showed significant savings with the Enterprise Agreement from the very first year. “It was obvious that the Enterprise Agreement offered the best price point for the range of products and the forecasted growth of our organization,” says Nassen. “With the Enterprise Agreement we got a deep discount on the cost of licenses along with several Software Assurance benefits, which are all included in the price of the agreement.”

Some of the primary Software Assurance benefits that CEI is taking advantage of include:

• The TechNet subscription—to help the staff stay up to date on the latest technology and find solutions to business needs
• “Cold” backups to the Heartland Business Systems site to help ensure disaster recovery
• Packaged Services, including a one-day onsite planning session on Office SharePoint Server 2007, to help expedite transitions to new technology

Under the Enterprise Agreement, CEI licenses the Core Client Access License (CAL) Suite, which provides CALs for Windows Server 2003, Exchange Server 2007 Standard, and a System Center Configuration Manager 2007 Configuration Management License, as well as for Office SharePoint Server 2007 Standard that it plans to deploy within a year. The company’s Enterprise Agreement also covers Windows Server 2003 Terminal Services, Microsoft Dynamics CRM, Microsoft Dynamics AX, and Microsoft SQL Server. CEI also licenses 15 Microsoft Office for Mac users under a Select License. When the company upgrades to Microsoft Office 2007 Professional in early 2010 it will add all Office licenses (including those for Mac users) to the Enterprise Agreement.

Benefits

Through its use of Microsoft technology, CEI was able to provide its shop-floor workers and management staff with real-time, actionable operations data to enhance decision making. It also reduced desktop hardware and software costs. In addition, by signing a Microsoft Enterprise Agreement, CEI saved approximately 15 percent on software licenses, while standardizing its software, and gaining predictable annual costs, simplified licensing management, and compatibility with third-party software.

Enhanced Decision-Making Tools

By upgrading to Microsoft Dynamics AX and integrating it with the Redhawk shop-floor application, CEI will provide decision makers with real-time data to help them make better informed decisions. “With Microsoft Dynamics AX, operators have real-time information on various processes rather than the theoretical times that we had before, which will help us do a better job of managing the business and making necessary production adjustments in a more timely manner,” says Nowak.

In addition, CEI takes advantage of SQL Server 2008 Reporting Services to run both scheduled and ad-hoc reports based on data collected through Microsoft Dynamics AX. Business managers and employees can quickly create reports without requiring help from IT. “SQL Server 2008 Reporting Services helps significantly increase performance,” says Nassen. “A report that used to take 10 hours to run now only takes 30 minutes.

More Cost-Effective Desktops

CEI saves both hardware and management costs by using Terminal Services to provide access to corporate applications and data. “We get a great return on our investment by using Windows Server 2003 Terminal Services because we can provide employees with access to necessary resources through a $300 Wyse terminal rather than have to spend $1,000 to $1,500 on a laptop,” says Nassen. “At that price we can get a lot more Wyse terminals than laptops for the same amount of money and it’s a lot easier to manage Terminal Services than to manage each laptop.”

Predictable Licensing Costs for 15 Percent Less

CEI estimates a significant savings in licensing the Core CAL suite and other Microsoft applications under the Enterprise Agreement. “We estimate that we’re saving close to $45,000 annually in licensing costs with the Enterprise Agreement, which is at least a 15 percent savings over acquiring Open licenses a few at a time,” says Nassen.

Because upgrades are covered under the agreement, CEI can upgrade Microsoft software without budget discussions. “Before, if we wanted to upgrade to a new version, I’d have to ask our CFO for several thousand dollars for new software licenses,” says Nassen. “We can upgrade software that is covered under the Enterprise Agreement at no extra cost, and we can pay for the licenses over three years, which is a huge benefit. Going forward we can make software decisions based more on business need than cost because we’ve already absorbed the cost on an annualized basis.”

Simplified Management, Enhanced Support

CEI administrators are able to easily manage both the Enterprise Agreement and the Microsoft Select License through the security-enhanced Microsoft Volume Licensing Service Center (VLSC). On VLSC, they can view license agreements, download products and product license keys, and manage Software Assurance benefits.

“An additional benefit we get through Software Assurance is a one-day onsite deployment planning session with a vendor of choice, which we’re planning to use to help us deploy Office SharePoint Server 2007 later this year,” says Nassen.

Expanded Flexibility

CEI has also found that the availability of third-party products that integrate easily with Microsoft software helps reduce development time when deploying new solutions. “There are a variety of third-party software packages that work right out of the box with Microsoft technologies,” says Nowak. “With such a wide choice, we can usually find something that fits us rather than having only one vendor to choose from, in which case we’d have to fit our operation to that package.”

Microsoft Volume Licensing
Microsoft® Volume Licensing offers customized programs that are designed to meet the needs of your business. Tailored for companies of different sizes and purchasing preferences, these Volume Licensing programs provide simple, flexible, and affordable solutions that can help you manage your licenses with ease. Whether you have five or thousands of desktop PCs, Microsoft Volume Licensing has the right program for you.

To acquire the latest Microsoft technology at a significant cost savings through Microsoft Volume Licensing, contact your Microsoft Partner or local reseller.

To learn more about Microsoft Volume Licensing, visit: 
www.microsoft.com/licensing 

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 Heartland Business Systems products and services, call (800) 236-7914 or visit the Web site at:
www.hbs.net

For more information about SoftwareONE products and services, call (800) 444-9890, send e-mail to sales@softwareone.com, or visit the Web site at:
www.softwareone.com

For more information about Coating Excellence International products visit the Web site at:
www.coating-excellence.com