The Latin American division of Hunter Douglas is applying its spirit of innovation to manufacturing business management. By implementing Microsoft Dynamics AX, the company streamlines and consolidates production, helping workers ensure on-time delivery and continued success in the face of dynamic competitive pressures.
|We have some products that we are delivering in as few as three days, as promised, and Microsoft Dynamics AX is making it possible.|
| Gustavo Mattedi|
Regional IT and Operations Manager
Hunter Douglas Latin America
Ever since it invented the aluminum window blind in 1946, Hunter Douglas has defined the industry with products that deliver revolutionary style and functionality. Its legacy includes the creation of entirely new categories of award-winning window coverings, such as the first honeycomb shade and a remote-control system for controlling one or more shades at once. Its expertise in customization helps keep its customers at the forefront of design in the home and office.
As with any fashion or home décor company, rapid changes in customer preferences (such as style, color, and features) add to the volatility of the business, and customers expect extremely rapid fulfillment of their orders. “We promise delivery of most of our products in five days,” says Gustavo Mattedi, Regional IT and Operations Manager for Hunter Douglas Latin America. “There simply isn’t any cushion. Window coverings are made to order, so they need to go into production the same day we receive an order.”
The Latin American division used eight different enterprise resource planning (ERP) systems, one per country. Working with eight different systems required manual steps that delayed getting orders onto the production floor, making it difficult to deliver products within the promised timeframe. “Our manufacturing software absolutely must be a business enabler, and it wasn’t," Mattedi adds. "We replaced several disparate systems with Microsoft Dynamics AX because we had difficulty communicating across countries, sharing reports, and responding when orders were changed.”
In addition, maintaining multiple ERP systems and modifying them to fit ever-changing needs became prohibitively expensive. Mattedi explains, “When we had to multiply the software development, implementation, and training by eight, the costs racked up and soon became insurmountable.” Hunter Douglas sought a way to consolidate its manufacturing and business management and reduce costs for ERP.
Applying Innovation to ERP with Microsoft
After considering several ERP solutions, including SAP, Hunter Douglas Latin America adopted Microsoft Dynamics AX. Currently, 400 people in Chile and Mexico use the manufacturing management software, and implementation is underway in Argentina. These will be followed by sites in Brazil, Colombia, Venezuela, Peru, and Panama. By early 2016, the single Microsoft AX implementation will have replaced eight separate ERP systems, and virtually everyone at Hunter Douglas Latin America—1,300 people—will use Microsoft Dynamics AX for manufacturing, fulfillment, and tasks related to customer service, accounting, production, sales, operations, logistics, and inventory.
Mattedi and other decision makers considered the requirements of the local Latin American offices and compared ERP software products including SAP and software from companies based in Colombia and Chile. The Latin American division wanted a solution that would match its needs in the following areas:
Features and functionality. Standard ERP functions plus strong support for the company’s made-to-order production methods.
Future-proof. “We wanted to work with a solid company like Microsoft that would continue to invest in its products and solutions,” says Mattedi.
Cost. Having observed SAP implementations that required a lot of expensive consulting, Mattedi was particularly interested in a software solution that his team could manage and customize by using existing or readily learned skills. “Our production style is nonstandard enough that most ERP solutions, like those from SAP, off the shelf, will not suit our needs without extensive, expensive customizations,” remarks Mattedi.
The choice came down to SAP and Microsoft Dynamics. “We think Microsoft Dynamics can do everything SAP can do but at a lower cost after customization,” says Mattedi.
Customized and Integrated by Using Internal Resources
Mattedi has eight direct reports responsible for Microsoft Dynamics AX implementation, including deployment, customization, and integration. He augments this team, as needed, with Microsoft Dynamics experts from Microsoft partner AlfaPeople, one of the largest Microsoft Dynamics partners in the world. For the Microsoft Dynamics AX implementation, the team deployed all new Dell servers at the company’s data center in Chile.
|We are paying for the Microsoft Dynamics AX project essentially within the same budget we have always had. I hope that in the future I can show a very good return on investment.|
| Gustavo Mattedi|
Regional IT and Operations Manager
Hunter Douglas Latin America
Onsite, Microsoft Dynamics AX interoperates with various off-the-shelf and custom-built solutions for specific uses, including a legacy system for pricing and custom-built payroll systems for each country. On the production floor, Asprova software helps the organization calculate the impact of changes in orders and passes data back to Microsoft Dynamics AX.
“We implemented and connected our existing systems to Microsoft Dynamics AX with no problem,” remarks Mattedi. “In a fairly short time, we became familiar with Microsoft Dynamics AX, and the customizations got easier to do. Considering how easy it is to customize Microsoft Dynamics, my group can do almost everything without any help from outside vendors.”
One example is the online order entry screen, which Mattedi’s team decided to develop on its own to match the experience that customers and dealers are accustomed to. “It was very easy to create and connect to Microsoft Dynamics AX,” Mattedi remarks. “People don’t feel any difference between the new system and the old.”
Hunter Douglas has also found that the availability and ease of discovery of third-party add-ons for Microsoft Dynamics AX streamlines implementation of specific manufacturing functionality. “I like the fact that if Microsoft Dynamics AX doesn’t provide for a unique need, there are a lot of ecosystem partners that offer interoperable point solutions. These add-ons allow the solution to work as if it’s a single system because it’s all integrated,” says Mattedi.
Overcoming Reluctance to Change
Overcoming organizational inertia required listening, involvement, and training. Before deployment, Mattedi and his team spent time meeting with users in various departments to understand their unique viewpoints and needs. “There are tremendous variations in how people think and work across eight countries and eight cultures,” says Mattedi. “We made sure they felt heard.”
Mattedi ensures that people from business groups across the company are engaged during the implementation. “With each deployment, we are involving more people more deeply in the implementation,” Mattedi elaborates. “As a direct result, each implementation has gotten easier and more successful than the previous. Now, rather than experiencing a lot of animosity when I visit a deployment site, I get invited out for a glass of wine after work.”
Software that Streamlines Made-to-Order Manufacturing
Although the company is only halfway through the implementation, Hunter Douglas is already realizing the benefits of Microsoft Dynamics AX. “In Chile and Mexico, we have improved control over made-to-order stock and other production processes, responding quickly to customer changes,” says Mattedi. Because of its initial success, Hunter Douglas has decided to move forward with a deployment of Microsoft Dynamics AX, which will allow them to support multiple languages and local business requirements from a single installed base.
Hunter Douglas is also implementing the module for intercompany transactions, anticipating that transactions among the regional subsidiaries will flow more smoothly and efficiently. “In the past, there were a lot of high-touch steps, for example, sending files via email,” explains Mattedi. “With Intercompany, the entire transmission of an order will happen in the same software.”
Software Fits Made-to-Order Model
Microsoft Dynamics AX meets Hunter Douglas’s need to centralize the configuration of products. In the past, one or more people from each of eight countries would configure products in their own system. The Product Configurator enables product managers to configure custom products with a unique bill of materials and routing.
“Today, we have four or five product managers creating products for the entire region, so we don’t need a different department in each country,” says Mattedi. “Everybody was worried about this one thing because it’s so crucial. With the Product Builder in Microsoft Dynamics, we’ve met the need. It’s working perfectly.”
Cost-Effective Solution Delivers New Deployment Within Existing Budget
Microsoft Dynamics AX not only fits the Hunter Douglas manufacturing model, so far it has proven to be an affordable solution. While it’s too early to calculate final cost reduction or ROI, Mattedi has watched his budget closely and—despite the initial outlay for hardware, software, implementation resources, and training—he hasn’t seen any rise in regional IT costs. “We are paying for the Microsoft Dynamics AX project essentially within the same budget we have always had,” Mattedi enthuses. “I expect that in the future I will show a very good return on this initial investment.”
Single, Consolidated System Ensures On-Time Delivery
By automating a process that used to be done by hand, the Product Configurator has helped Hunter Douglas accept an order and send it to the production floor the same day. This helps the company ensure timely delivery and keep its competitive edge. “Microsoft Dynamics AX helps us produce to order,” says Mattedi. “It helps us automatically check credit and inventory, forecast materials needs, and submit an order to buy what we need to satisfy future orders.”
With Microsoft Dynamics AX, Hunter Douglas Latin America is well-equipped to compete amid stiff competition, respond to market dynamics, and reduce time-to-delivery. “We have some products that we are delivering in as few as three days, as promised, and Microsoft Dynamics AX is making it possible,” concludes Mattedi. Next Steps
This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Document published January 2013