MICROSOFT GREAT PLAINS ENHANCES SUPPLY CHAIN VISIBILITY FOR MEGA LOGISTIC HOLDINGS


SITUATION
Mega Logistic Holdings (M) Sdn Bhd (MLH) is one of the top five logistics solutions companies in Malaysia. It was incorporated in 1985 to bring together the various logistics services provided by different specialist logistics companies.
MLH handles freight of all sizes and weight for delivery anywhere in the world from its 10 offices nationwide, offering its customers multi-modal transportation options – air, ocean and land transportation.
Its business is based on the concept of total logistics which encompasses logistics management, integrating various freight management services from freight forwarding, customs brokerage, warehousing, inventory management to distribution.
MLH, which has five subsidiaries, co-ordinates its services under four main business units, namely freight forwarding (air freight services and ocean freight services), warehouse and distribution, customs brokerage and trucking services.

The company is well aware that efficient on-time delivery services are a major concern for the manufacturing and marketing sectors today. “We recognized the needs of our customers and have built our resources into logistic-led distribution centers capable of providing the quick response to our customers’ requirements,” says Bobby Teh, MLH’s Director of Logistics and Projects.

This commitment to providing quality services to customers has prompted MLH to be IT focused and invest substantially in information systems over the years. The development of IT systems was undertaken on a rather ad hoc basis as the various business units deployed their own solutions.

These systems catered to managing the business operations of the various units such as air freight services, ocean services and customs brokerage. For financial management, the subsidiaries deployed their own accounting systems.

Eventually, the tasks of managing these disparate systems became an administrative nightmare for MLH. “In the course of expanding our businesses, we ended up with 19 systems which didn’t talk to each other,” Teh explains.

“Eventually, I needed to have 5 or 6 PCs on my desk just to manage the operations as these systems were not integrated,” Teh remembers.

This meant that sharing information between business units was a major problem as many processes were manual such as re-keying in of financial information. The management also did not have access to real-time business information because of the long lead times needed to prepare reports.

“Management was handicapped because we often found out about problems after the fact. Most of the time we were engaged in fire-fighting rather than prevention,” Teh explains.

MLH saw it was imperative to upgrade and consolidate its IT operations if it wanted to become a highly efficient world-class logistics company. This prompted it to look at replacing its obsolete business solutions.

SOLUTION
MLH wanted to replace its locally developed DOS-based accounting systems with a single enterprise-wide solution running on a common platform. It evaluated various solutions ranging from high-end systems like SAP to lower-cost solutions developed by local software houses.

It finally chose Microsoft Business Solutions – Great Plains running on Windows Server 2003 and Microsoft SQL Server 2000. “In order to provide better services to our customers, we decided centralize our backend accounting by deploying Great Plains,” says Teh, who adds he was impressed by the capabilities of Great Plains during a demo by Dynamic Business Solution Sdn Bhd, a Microsoft Business Solutions Certified Partner

The migration to Great Plains was handled by Dynamic Business and was deployed at the MLH headquarters in September 2004. MLH currently uses the Accounts Receivables, Accounts Payable, General Ledger and Fixed Assets modules of Great Plains.

Great Plains also integrates seamlessly with the Windows-based eFulfillment Suite, an integrated supply chain solution for logistics providers from NDT Software Consulting Sdn Bhd. eFulfillment’s Warehouse Management System (WMS) was implemented almost concurrently with Great Plains as part of MLH’s plan to consolidate its IT operations on the Microsoft Windows platform.

“Because Great Plains runs on the Microsoft platform, it is easier for MLH to integrate it with the new solutions it will be deploying to replace the aging business systems,” says David Chew, Chief Operation Officer of NDT.

NDT is in the process of deploying the transportation management and freight management modules of the eFulfillment system for MLH. Just like WMS, Great Plains will easily integrate with these new systems so that all the financial data generated will flow back into Great Plains for backend processing.

For MLH, deploying its key business systems on the Microsoft platform is compelling because the platform is easy and cost effective to manage. “Technical and support staff familiar with Microsoft technologies are readily available and affordable,” says Teh.


BENEFITS

Enhancing Supply Chain Visibility
The adoption of Great Plains provides MLH with real-time access to business information and greater visibility into the Group’s extensive nationwide operations.

“We now have real-time information and that makes it easier for us to manage our business operations. With Great Plains, we can drill down and see how every area of our business is performing and where the problem areas are,” he adds. Previously, it took almost a month to get reports on the subsidiaries’ performance such as the tonnage handled.

“With access to current information and the array of reports available from Great Plains, the management no longer feels that we are fire-fighting all the time,” remarks Teh.

“By consolidating financial information from our business units, Great Plains gives us a single view of customers, especially since a particular customer may be using services from different subsidiaries,” he says. This allows MLH to better manage and serve its customers better.

According to NDT’s Chew, MLH plans to develop Business Intelligence capabilities by consolidating all of the Group’s accounts into a central database or platform.

Closing of Accounts Speeded Up
The centralization of MLH’s financial backend processing on Great Plains has brought added dividends in the form of faster preparation and completion of financial statements and reports.

In the case of the company’s closing of accounts, Great Plains has enabled the Finance Department to slash the time taken to close accounts by about 10 days. Previously, the senior management could only expect to get the complete set of accounts for the previous month on the 25th of the current month.

“Great Plains has enabled us to get the accounts out by the 15th of each month,” says a satisfied Teh, who adds that the management is happy that Great Plains has helped achieve such impressive productivity gains.

Improving Business Efficiency
The deployment of Great Plains has helped MLH enhance the efficiency of its business processes and customer service. For example, with a centralized accounting system, MLH is able to speed up the billing process and thus improve cash flow management. “Collection is always a major concern for any business, so it is vital that invoices are issued faster,” Teh says.

Previously, individual subsidiaries needed to send the required documents to the accounting department which would then issue the invoices.

“The cycle time for invoicing then was five days. With Great Plains, we have pushed the billing responsibility back to operations (at the business units) where they can do it on the spot,” he explains. The billing information from the business units’ systems will immediately be ‘pushed’ back to Great Plains for consolidation.

By eliminating the paper flow to the backend, errors in re-keying in information has also been reduced. Teh says the improvement in the billing process is possible because Great Plains is able to integrate with the business units systems’ under the Microsoft platform.

This has also improved communications with customers and enhanced customer loyalty in the process. Where previously customers used to call the accounting, operations or sales departments on various issues, MLH has now centralized communications by handing the responsibility to customer services. “The customer just needs to call our customer service if they have any queries. Great Plains has enabled us to do this,” Teh says.

Rationalizing Manpower Requirements
By implementing the Great Plains solution, MLH is able to dramatically rationalize its manpower resources for accounting functions. Previously, because each subsidiary was operating its own accounting system this meant it also had to set up its own accounting units.

By centralizing its accounting platform on Great Plains, MLH has effectively made redundant the positions of four branch accountants and six accounts clerks.

“This means that our group Financial Controller can manage the group’s accounts from our headquarters here. For example, she doesn’t need to call up the accountant at our Penang office to get the latest financial information. It is all available in the Great Plains system,” he explains.

Teh also points out that MLH’s mission is to “exceed our customers’ expectations by providing excellent quality services in all aspects of our business.” To achieve this goal, MLH realizes it needs to shift its focus from managing assets and moving cargoes to managing information.

And Great Plains will be a vital building block of the new integrated IT infrastructure which MLH believes will help it become a major logistics company in the region.

End.