Connecting CRM to ERP delivers end-to-end value for Heritage Bag

Producer of more than 400 million pounds of bags a year, Heritage Bag Company knows the ins and outs of competing successfully in a market that is highly competitive. Heritage Bag deployed Microsoft Dynamics AX in 2006, implementing core ERP functions, including manufacturing controls and financial management. After successfully managing its manufacturing operations on Microsoft Dynamics AX for seven years—and undergoing several upgrades—Heritage Bag Company began looking at ways to extend the solution to support other functional areas, including sales.

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*It has been extremely important to have tools like Microsoft Dynamics AX and Microsoft Dynamics CRM, which allow us to improve one part of the business and then, as we move onto another part, know that we still have the tools in place to do that—we won’t have to go out and find another system.*

Doug Sheffield
Vice President of Supply Chain Management and IT
Heritage Bag Company

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What does it take to be the largest manufacturer of institutional/industrial trash bags and can liners in the United States? Ask Heritage Bag Company. Producer of more than 400 million pounds of bags a year, Heritage Bag Company knows the ins and outs of competing successfully in a market that is highly competitive. And one of the keys, Vice President of Supply Chain Management and IT Doug Sheffield points out, is fostering customer relations. “Most of our competitors go to market using broker representatives,” he says. “We do that as well, but we also maintain an internal sales team that works directly with our local distributors and national accounts, so we can learn how best to market our product to the end customer.”

Sheffield goes on to note that because Heritage is in a competitive business, it must also work hard to control its margins. This means timing the markets—strategically buying raw material that goes into its manufacturing process when the price is low—while maintaining tight control over operations and harnessing the business insight needed to fuel strategic decision-making.

Recognizing that to thrive in the face of these challenges the company needed to be able to grow and change, Heritage decided to replace its homegrown business management system with an end-to-end enterprise resource planning (ERP) system. “We simply knew that with our current technology, we weren’t going to be able to get to where we wanted to be as a company,” explains Sheffield.

Connecting Operations to Sales

Heritage Bag deployed Microsoft Dynamics AX in 2006, implementing core ERP functions, including manufacturing controls and financial management. After successfully managing its manufacturing operations on Microsoft Dynamics AX for seven years—and undergoing several upgrades—Heritage Bag Company began looking at ways to extend the solution to support other functional areas, including sales.

“We had spent a lot of time focusing on the operational side of the business and rolling out an ERP system,” explains Sheffield. “Once we had matured in that area, we began to look at sales. We found that we had many of the traditional issues and challenges in terms of organizing our sales efforts and understanding how to capture that information and get better information about our customers and prospects.”

Realizing that these issues could be addressed using a customer relationship management (CRM) system, Heritage reviewed its options. Says Sheffield, “We looked at Salesforce.com, but we chose Microsoft Dynamics CRM because it fit with our existing environment and offered middleware—the Connector for Microsoft Dynamics—that made it easy to integrate with Microsoft Dynamics AX. The decision was really a no-brainer.” As with Microsoft Dynamics AX, Heritage Bag Company found that ease of support and customization made Microsoft Dynamics CRM a good fit for Heritage Bag.

Supporting End-to-End Business Processes

With full-featured ERP and CRM system in place, Heritage now supports its entire range of business functions from a fully integrated solution. While Microsoft Dynamics AX provides functionality for everything from production and supply chain management to human resource management and financials, Microsoft Dynamics CRM supports sales force automation, pipeline management, and contact tracking. Sales and product information flow between the CRM and ERP systems through the Connector for Microsoft Dynamics, and Microsoft Dynamics AX serves as the system of record.

Sheffield explains, “Sales staff create all their prospects in Microsoft Dynamics CRM, then—as a contact becomes a customer—the record moves to Microsoft Dynamics AX so we can perform operational tasks like assign accounts payable contacts and perform invoicing.”

Extending the Solution

Heritage has developed a mobile application for Android and IOS, which allows sales staff to view product, sales, and operational data on a smartphone or mobile device while they’re onsite with a customer. Through the mobile interface, sales people have access to customer information (for example,, sales history, orders, and invoices) and item-level information (item details, sales volume, inventory levels, and other customers purchasing the item), in addition to general product information and company performance measures and KPIs.

Heritage has also developed a new pricing module in Microsoft Dynamics AX that allows for rebates, and they have tailored a number of interfaces to the exacting needs of staff.

Benefits

Although its ERP and CRM systems have each driven their own efficiencies, together they have enabled the company to connect operational data with sales and garner newfound business insight. In addition, the company has been able to support and customize both systems by using similar skill sets, easing the IT workload while boosting agility.

Inventory Optimization

In a competitive business sector, Heritage has been able to compete effectively by keeping its inventory aligned both with the needs of its customers and with fluctuations in the price of resin.

Says Sheffield, “Using Microsoft Dynamics AX for scheduling and to monitor our inventory levels, we have been able to decrease our inventory by as much as 20 percent in the last nine months. And, while it won’t always be the case that we want to do this, we know we have the tool in place that will get us to where we want to be.”

Business Agility

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*We looked at Salesforce.com, but we chose Microsoft Dynamics CRM because it fit with our existing environment and offered a connector that made it easy to integrate with Microsoft Dynamics AX. The decision was really a no-brainer.*

Doug Sheffield
Vice President of Supply Chain Management and IT
Heritage Bag Company

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With the ability to grow and change as the primary factor for choosing an ERP system in 2006, Heritage now has the capability to be agile and responsive to market demands. And it’s a capability that adding Microsoft Dynamics CRM to the environment has only boosted.

“With a project like this, you’re never really done,” says Sheffield. “You’re always improving. So for us, it has been extremely important to have tools like Microsoft Dynamics AX and Microsoft Dynamics CRM, which allow us to improve one part of the business and then, as we move onto another part, know that we still have the tools in place to do that—we won’t have to go out and find another system.”

Most recently, the company has used the systems to extend its line of eco-friendly bags, which have seen enormous success particularly on the West Coast of the United States.

Cost-Effective IT Support and Customization

Because both Microsoft Dynamics AX and Microsoft Dynamics CRM rely on a common skill set, Heritage is able to support these mission-critical systems using in-house IT staff, which is an important consideration for the company.

“As a part of our company culture, we like to do things in-house and avoid spending money on consulting,” says Sheffield. “And with Microsoft Dynamics AX and Microsoft Dynamics CRM, we have been able to do that. To support the systems we have only one developer and three other IT staff, including myself.”

Productivity

With a standardized, fully integrated business solution supporting all facets of its business, Heritage has seen considerable improvements in productivity. Most notably, the training time for new warehouse staff—such as a picker—has gone from four months to about four hours. Says Sheffield, “Before we had Microsoft Dynamics AX, staff only knew where items were based on their experience. Now our warehouse is fully location-controlled. You can give someone a pick ticket and it will tell him or her exactly where to go and what quantity to pick. A new picker can be proficient from day one.”

In the back office, the company has been able to reduce staff in customer service. Sheffield says, “While it wasn’t what we set out to achieve, we now have less staff, just through normal attrition, while processing more transactions than ever before.”

Real-Time Business Insight

What has been most beneficial for Heritage, however, has been its ability to capture, in real time, all operational and sales information in a single database. “We’re seeing production reporting as it’s happening today,” enthuses Sheffield. “That used to happen at the end of the shift or the end of the day.”

But even more importantly, Sheffield adds, “What’s really changed our business the most is the reporting capabilities we now have, as well as the depth of information we can draw on. With information that spans both operations and sales, we can see more than just our productivity and efficiency but also our margins by customer. And, ultimately, it’s having access to that kind of information that enables us to make business decisions.”

Next Steps

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published July 2013

Taille de l'entreprise du client: Medium Organization
Secteur: Life Sciences, Chemicals; Oil & Gas, Mining; Consumer Goods
Pays ou région: United States
Solutions:
  • Microsoft Dynamics AX 2012
  • Microsoft Dynamics CRM
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