4-page Case Study
Posted: 5/23/2011
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Borroughs Corporation Commercial Shelving Manufacturer Aims for Competitive Edge with ERP Solution

Borroughs makes steel storage systems for libraries, retail stores, and warehouses that range from hundreds of dollars to millions of dollars. With 65 percent of the company’s orders requiring some customization, Borroughs sought an ERP solution that would help it design and manufacture those custom orders more efficiently. The company worked with Microsoft Gold Certified Partner First Tech Direct to replace its mainframe-based system with Microsoft Dynamics AX, following best practices from Microsoft for engineer-to-order operations. Borroughs now has a real-time view into production and engineering operations, which helps the company plan more effectively and provide customers with more accurate quotes. Managers at Borroughs can access and manage information easily, without requiring help from IT. In addition, the company reduced its ongoing software and hardware costs by two-thirds.

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* With Microsoft Dynamics AX, we have the insight we need to quote projects with greater accuracy and to plan production accordingly. *

Greg Worsnop,
Vice President Finance and Administration, Borroughs

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Situation

Since 1937, Borroughs has designed and manufactured top-quality steel storage systems and filing equipment in Kalamazoo, Michigan. The company’s orders range from office cabinets costing hundreds of dollars to multimillion-dollar customized warehouse systems for leading retailers. Borroughs primarily does business in North America, bringing in approximately U.S.$45 million in annual revenue. Roughly 65 percent of the company’s sales are for custom orders, requiring careful production planning to ensure timely delivery.

“Most of the time, our shelving units are the last thing to go into a new library, office, museum, or warehouse. This means that our customers’ ability to put those investments into production hinges on us delivering on our promises,” explains Greg Worsnop, Vice President Finance and Administration at Borroughs. “When quoting on these types of projects, we need to be able to predict with a high degree of accuracy how fast we can manufacture and deliver the product. If we’re not fast enough, we risk losing to our competition. And, of course we can’t miss a promised delivery date.”

Despite the critical nature of the planning process, the company’s 15-year-old JBA System 21 enterprise resource planning (ERP) solution hindered managers from getting an up-to-date and consistent view of production capacity. “The old solution required our business stakeholders to use a command-line interface,” recalls Kai Stankey, IT Manager at Borroughs. “And, if the stakeholders needed a report, they had to ask the IT department to help extract the required data because they were unable to do it themselves.” And, because the system lacked support for certain manufacturing capabilities, Borroughs employees managed several of those processes on spreadsheets.

For many years, Borroughs had not kept the system current because it wanted to avoid what it considered were exorbitant software maintenance fees. “The costs of the solution weighed very heavily,” says Stankey. “Besides the software costs, we leased IBM AS/400 servers every five years for roughly $150,000.”

Rather than pay for an expensive software and hardware upgrade, Borroughs business and IT leaders agreed to explore other ERP solutions. “We wanted a solution that would put the very latest information at the fingertips of decision makers throughout the company, and especially those involved in quoting and planning,” says Worsnop.

Borroughs has achieved ISO 9001:2000 certification for its quality assurance processes.
Borroughs has achieved ISO 9001:2000 certification for its quality
assurance processes.
Solution

Borroughs evaluated systems from Epicor 9, Infor SyteLine, and Microsoft Dynamics AX and eventually chose the solution from Microsoft. “We appreciated the fact that Microsoft Dynamics AX is a Microsoft product,” says Worsnop. “Our applications for design and engineering requests and the quote process are also based on the Windows operating system, and of course, people throughout our organization use Microsoft Office on a daily basis. Overall, Microsoft offered a mix of compelling business and technical reasons for choosing their solution.”

Following Best Practices
Borroughs also discovered that standard functionality in Microsoft Dynamics AX covered most of the company’s business requirements. “One of our goals for the implementation was to minimize customization,” says Stankey. “Not only would this minimize the cost of the project, but it would also make it easier to upgrade the solution.”

Working with Microsoft Gold Certified Partner First Tech Direct, Borroughs learned about best practices for using Microsoft Dynamics AX in engineer-to-order operations. Following these guidelines, the company deployed the financial, shop-floor control, manufacturing, capacity planning, and customer relationship management modules in Microsoft Dynamics AX, as well as a shipping add-in from Blue Horseshoe called TRAX.

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* Everyone at Borroughs can see what is happening throughout the company. We can use this information to firm up existing orders and more precisely plan new ones. *

Greg Worsnop,
Vice President Finance and Administration, Borroughs

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The implementation team used the Microsoft Dynamics Sure Step methodology from Microsoft to direct the project. “At every point in the process, the Sure Step methodology helped us see who was responsible for what and when each task needed to be completed,” says Stankey.

Representatives from throughout Borroughs helped plan the implementation, an important factor for the project’s success, according to Worsnop. “We had people on the team from customer service, planning, finance, engineering and technical support, and IT and even our credit manager and plant manager,” he says. “Everyone worked together to figure out the best way to structure the solution. First Tech Direct modeled functionality in Microsoft Dynamics AX so that we could refine how it would work before our go-live.”

Gaining Visibility into Costs and Production
Because machine operators previously had to record their production on paper forms, the information would be unavailable to others in the company until the next day at the earliest. Now, machine operators record their production into terminals on the shop floor as soon as they complete a task. This information is immediately available to sales team members who need to track costs on each project. In addition, operators use Microsoft Dynamics AX to plan their day-to-day routine; they can see what projects they need to work on next, and get started immediately, instead of having to ask the production manager.

When sales team members forward a change request from the customer to the engineering team, they can easily assign the costs for fulfilling that request to the project. “We connected our subsystems for engineering and the quote process to Microsoft Dynamics AX so that information entered into one system is visible in the other,” says Worsnop. “Everyone at Borroughs can see what is happening throughout the company. We can use this information to firm up existing orders and more precisely plan new ones.”

Integrating with Microsoft Office and Microsoft SharePoint Server
Borroughs takes advantage of interoperability between Microsoft Dynamics AX and other Microsoft products and technology to streamline workflow and extend the reach of the solution. Business managers can easily transfer information from Microsoft Dynamics AX into Microsoft Excel for quick analysis, for example. The solution also works with Microsoft Outlook to send alerts to specific people when an event occurs, such as when a new customer is added into the system or an existing customer reaches their credit limit.

Borroughs designs and manufactures a range of commercial steel products.
Borroughs designs and manufactures a range of commercial steel products,
from retail checkstands to library shelving.
 
Even before deploying Microsoft Dynamics AX, Borroughs used Microsoft SharePoint Server for document collaboration and as part of its engineering change management process. Now, the company plans to integrate both solutions to create portals that will simplify collaboration between Borroughs and its customers and vendors. Borroughs also has plans to create online tools for its sales representatives that will feature functionality and information from Microsoft Dynamics AX displayed through SharePoint Server.

Benefits
Borroughs now has a modern, world-class ERP system that will help it achieve key business goals at a reasonable cost compared to the expense required to update its previous legacy system. “With Microsoft Dynamics AX, we have the insight we need to quote projects with greater accuracy and to plan production accordingly,” says Worsnop.

Real-Time Access to Critical Business Information
The new solution provides a common, up-to-date picture of operations that is necessary to operational improvements. “We have consolidated what had been silos of information,” says Worsnop. “Everyone has a better understanding of how the other groups operate and how we can support each other for the benefit of the company. And, we can see real costs now; we don’t have to make educated guesses.”

Before implementing Microsoft Dynamics AX, the Borroughs team set ambitious operational efficiency goals for the new solution. “We want to sharpen our competitive edge by reducing our lead times by up to 50 percent—from between four to five weeks to between two and four weeks,” says Worsnop. “We’ve only been using the solution for two months, but we can see that we have the tools to get to where we want to be.”

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* The annual software maintenance costs for Microsoft Dynamics AX are roughly one-third what it would have cost for our previous solution. *

Kai Stankey,
IT Manager, Borroughs

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Familiar, Easy-to-Use Solution

Employees at Borroughs find Microsoft Dynamics AX tremendously easy to learn and use compared to the previous system, which used a command-line interface. “Microsoft Dynamics AX looks and feels like other familiar Microsoft software,” says Worsnop. “Decision makers at the company can navigate the solution to investigate situations on their own or pull information into Excel. We were surprised at how quickly people took to the new solution—it’s just that easy to learn.”

Two-Thirds Reduction in Ongoing Hardware and Software Costs
Borroughs found the ongoing costs of maintaining a current version of Microsoft Dynamics AX to be approximately one-third the cost of upgrading its JBA System 21 solution. “The annual software maintenance costs for Microsoft Dynamics AX are roughly one-third what it would have cost for our previous solution,” says Stankey. “Also, the Dell servers we purchased for our new system cost about $40,000, which is less than one-third the five-year lease of IBM AS/400 servers.”

More Manageable Technology
The IT team at Borroughs no longer needs to worry about having staff members with specialized mainframe skills to manage its ERP system. Instead, IT professionals with general skills administering Windows-based systems can manage the new solution. “We are using standard hardware and familiar software,” explains Stankey. “More people have the knowledge and experience required to work with Microsoft Dynamics AX.”

Borroughs also took advantage of the superior flexibility in Microsoft Dynamics AX to reduce its parts database size by roughly three-fourths. “Before, we had to have a separate part number for each color variation, but now it’s a part attribute,” says Stankey. “We reduced our parts database from 280,000 part numbers to 70,000 part numbers.”

Microsoft Dynamics
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.

For more information about Microsoft Dynamics, go to:

www.microsoft.com/dynamics

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 in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. 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 Borroughs products and services, call (800) 748-0227 or visit the website at:
www.borroughs.com

For more information about First Tech Direct products and services, call (248) 291-0138, send an email message to info@firsttechdirect.com, or visit the website at:
www.firsttechdirect.com
Solution Overview



Organization Size: 200 employees

Organization Profile

In business since 1937, Borroughs specializes in steel storage systems for offices, libraries, stores, and warehouses and does business primarily in North America.


Business Situation

The legacy system Borroughs used failed to meet its production-planning needs, and upgrading the system was too expensive.


Solution

Borroughs worked with Microsoft Gold Certified Partner First Tech Direct to implement Microsoft Dynamics AX according to best practices for engineer-to-order manufacturing companies.


Benefits
  • Common, up-to-date picture of operations
  • Familiar, easy-to-use solution
  • Two-thirds reduction in ongoing hardware and software costs
  • More manageable technology

Hardware


Third Party Software


Software and Services
  • Microsoft Dynamics AX 2009
  • Microsoft Excel
  • Microsoft Outlook
  • Microsoft SharePoint Server 2010

Vertical Industries
  • Manufacturing & Resources
  • Automotive, Industrial Equipment & Aerospace
  • Life Sciences, Chemicals; Oil & Gas, Mining

Country/Region
United States

Business Need
  • Business Productivity
  • Financial Management

IT Issue
  • Enterprise Resource Planning (ERP)
  • Manufacturing and Supply Chain Management

Languages
English

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