Success of Business Development is Ensured by Innovative Process Management

Because of the diversity of its IT systems and the incompatibility of processes Eoltas, which is engaged into the wholesale and retail trade of car parts, has faced various problems in the managing of its different branches. When expanding the business to large cities the lack of a centralized information analysis meant that flexible reaction to changes in the market and timely satisfaction of new customer needs proved difficult. The company’s administration realized that innovations are required to ensure the successful development of the company. Microsoft Dynamics AX satisfied the company’s needs.


Eoltas Company began the wholesale and retail trade of car parts in Lithuania almost two decades ago. Only 5 employees were working in the company at the time of its founding in 1993; however, from the very beginning successful business was associated with an ambitious goal of development. Today, over 220 employees work for the company. 16 Eoltas trade centers operate in the biggest towns and cities of Lithuania and there are 8 centers in Latvia.

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*We have selected Microsoft Dynamics AX after having evaluated its functionality and flexibility in satisfying our existing and future needs as well as its complexity which includes the introduction of the ERP system in all branches of the company.*

Marijus Montvilas
Head of IT Department
Eoltas

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Selling spare parts for engines and running gear for motor and commercial cars manufactured in Europe, Japan and the USA, the company is a representative of over 70 car parts manufacturers in Lithuania and neighboring countries. Currently, the number of different products stored in Eoltas’ warehouses amounts to nearly 120 thousand items.

The specific nature of its business conditions, the fact that Eoltas has to offer its customers an especially wide range of items as the number of car models in the world is growing constantly and at the same time the total number of parts used in these cars is increasing at a dramatic rate. Today, Eoltas’ database uses a catalogue with codes for over 2.7 million parts and their substitutes. In the nearest future, the company plans to expand this catalogue to up to 5.6 million records.

“As the company expanded throughout the largest cities of Lithuania and abroad it became difficult to supervise the branches, which were located in ever-increasing distances from each other and to share relevant data. All the enterprises of the group had independently selected and installed IT solutions, used different systems that were not interrelated. It was increasingly difficult to maintain a uniform spare parts price list in the associated companies, to distribute the goods among the companies, to control general demand for the spare parts and to gather a uniform database on all the new spare parts on the market,” said Marijus Montvilas, Head of IT Department at Eoltas.

According to M. Montvilas, in such a situation it was difficult to ensure and maintain a smooth process of trade and ensure the satisfaction of customers’ needs from one center. The customers of Eoltas group consider the company’s branches a unified system and expect the same agreed conditions of trade in each of them.

If the case arose that one trade center did not have a particular spare part in stock, there was no possibility of getting immediate information on which other branches had that spare part in stock or whether it could be delivered quickly. With this centralized information lacking, there was a shortage of objective assessments of the situation, meaning reaction to changes in the market was delayed. Before the unified system was introduced, each company of the group was accounting the same goods in its system separately; therefore, it was especially difficulty to analyze the general demand for particular spare parts, sales volume, and tendencies of sales volume changes.

The company’s managers had been wasting a lot of time making plans on when, how much, which suppliers, and what spare parts needed to be ordered because they were not sufficiently informed on the available stock and demand in their different branches.

Commodity control was complicated as well because mistakes in planning, caused by a failure to evaluate all the relevant factors, conditioned a groundless increase in warehousing and shipment costs.

The customers of Eoltas are car service centers, car parts outlets, and authorized representatives of car manufacturers. “We seek to create a professional system of new car parts sales which satisfies customer needs. That is exactly why we decided to invest in innovations and switch to a centralized information management,” said Marijus Montvilas, Head of IT Department at Eoltas.

Comprehensive system for analysis, planning and control

Eoltas began the project in 2010; however, the decision regarding allocation of investment was not made spontaneously; the decision-making process took two years. Blue Solutions, a certified Microsoft partner, was selected for the project development and implementation.

“It was not an easy decision to make and implement for the group of companies to fundamentally change our process management. Nevertheless, Eoltas was ready for the challenges imposed by these changes. Over less than a year working together we clarified the needs, analyzed business processes, adapted and successfully introduced the new Microsoft Dynamics AX 2009 system,” said Aurimas Uža, Senior Project Manager at Blue Solutions.

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*We seek to create a professional system of new car parts sales which satisfies our customer needs. That is exactly why we decided to invest into innovations and switch to centralized information management.*

Marijus Montvilas
Head of IT Department
Eoltas

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To ensure the smooth operation of the company, the project was developed in several stages. We began from a detailed analysis of the group’s business processes, needs and expectation. Then the solution was designed and the introduction was planned. The system’s prototype was created, which underwent a process of testing and improvement for several months. Microsoft Dynamics AX was first introduced in the main Eoltas branch. Within two months the system was already operating in Vilniaus Eoltas, another branch of the group.

All the processes were included into the system: sales, purchases, pricing, planning, reserves, warehouse management, accounting, human resources, and wage accounting. Thus, the system was used by all employees of the company. Currently, over 90 different users are registered in the system. “At the moment, the system has already been installed in five branches of the group in Lithuania and in the associated company in Moscow. The project is further developed in other branches in Lithuania and Latvia,” commented Aurimas Uža, Senior Project Manager at Blue Solutions.

The created system of business planning, management and analytics allows the real-time surveillance and management of processes in the company. Managers, analysts and directors can analyze the company’s activity at any moment of time by using the information provided by the system and OLAP cubes in different cross-sections.

The cash registers in stores of the group’s companies and e-commerce are integrated into the common system, which ensures immediate and high-quality customer service and efficient resource planning. Orders are sent to the warehouses, where the packaging and shipment of the goods take place.

The managers use the integrated unique solution for planning reserve purchase. The system allows the viewing of charts for 4–5 years’ history of specific sales of goods, giving consideration to the existing demand and planned tendencies. It is possible to group the goods according to features of the spare parts manufacturers, spare parts turnover, trade stability over time and various other criteria and order a part of items in an automated manner. The centralized management of purchase of the company’s reserves allows both the saving of employees’ time and a reduction in costs.

Currently, there are over 4 million records on spare parts for engines and running gear in the car parts and substitute parts search system. Eoltas plan to expand this database to up to 20 million records. "Often times, the same spare parts are offered on the market by several different manufacturers, while some original spare parts can be replaced by others. Accumulation and management of such information in one place is a competitive advantage for us as sellers, because from a wide range of products we can offer our customers different alternative parts satisfying customer needs in terms of quality and price," added Marijus Montvilas, Head of IT Department at Eoltas.

Standard Microsoft Dynamics AX functions are greatly enhanced by a unique system of price list maintenance and control. According to set criteria the system warns when prices need to be adjusted. Moreover, the system maintains different pricing for different markets and customer segments. Also, currency price lists for export markets, wholesale and retail trade price lists of several levels, contract price lists, and price lists valid during discount events are maintained. A part of the price lists are maintained in a centralized manner for the entire group of companies. Both different companies and different stores of the companies can set prices for certain product segments.

We didn’t expect to get the results and return on our investments so quickly

“Over two years we have allocated EUR 1 million for IT infrastructure and new software. Thus, we set the highest requirements for the project. We have selected Microsoft Dynamics AX after having evaluated its functionality and flexibility in satisfying our existing and future needs as well as its complexity which includes the introduction of the ERP system in all branches of the company. Following the beginning of the project’s implementation, we immediately observed the initial results, and the return on our investment began shortly after,” said Marijus Montvilas, Head of IT Department at Eoltas.

According to M. Montvilas, the system update enabled Eoltas Company to obtain better results in improving business processes, increasing work efficiency, and satisfying customer needs more accurately.

Company development
When founding new representation offices and expanding the set of customers, the company faces new opportunities and challenges at the same time. An IT solution which consolidates and standardizes processes creates a foundation for other internal and external projects. A solid, yet at the same time flexible, base of the company’s business turns changes in the market into possibilities and ensures the successful development of the company.

Business processes
With constant changes on the market, the success of a business is conditioned only by smooth and continuous operation in even remote sales points. A unified system for information gathering and processing ensures data integrity and simplifies business processes. "Different branches of the company do not need to take care of system creation, like before. It saves time and money. Moreover, centralized information management provides transparency, clarity and specificity," said Marijus Montvilas, Head of IT Department at Eoltas.

Business efficiency
Directors and employees have an opportunity to offer an outside look on and engage in analysis of which processes previously took place in the company with regards to the achievement of certain results. Multifunctional yet user-friendly IT solutions speed up information analysis, reduce the cost of obtaining information; thus, the employees can spend more time on their direct duties. Consequently, efficiency increases, while smart decisions are always made in time.

Customer service
Information on new spare parts, suppliers’ behavior, constantly changing customer needs, sales results in different regions and which things were obtained in time allows immediate reactions to changes in the market. The prepared technological base allows providing customers with more comprehensive information on spare parts, their use, possible alternatives, a more immediate implementation of customer orders, offering a wide range of services and products, and immediate solutions to any questions and problems that may arise. Clarification of needs and relevant reaction not only ensure a high quality of service, but also provide added value, which stimulates customer loyalty.

Next Steps
Connect with Microsoft Dynamics
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Learn about partner solutions available in the Microsoft Dynamics Marketplace

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Grösse des Kunden: Medium Organization
Branche: Wholesale Distribution
Land oder Region: Lithuania
Lösungen:
  • Microsoft Dynamics AX
  • Microsoft Dynamics AX 2009
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