Luxasia speeds up sales processing by 70 per cent with Microsoft Dynamics™ NAV

“Luxasia is expanding fast and we need to face the challenges of globalization with agile business strategies. Microsoft Dynamics™ NAV has supported us in many situations that require real flexibility to adapt to changes in our business environment.” - Robyn Lim, Financial Controller, Luxasia (M) Sdn Bhd.


Luxasia, a leading distributor of global fragrance and cosmetics brands, had been using a DOS-based accounting solution at its Malaysian office. The ageing system could not cope with business growth and many business processes were manual. It also did not have a computerized inventory management system in place.

Realizing it needed an integrated enterprise solution, Luxasia chose Microsoft Dynamics™ NAV. With Dynamics, Luxasia is able to efficiently consolidate information between the head office and its warehouse, access real time business information and automate inventory management. Luxasia’s Singapore-based headquarters was impressed with Dynamics that it decided to roll it out to all its Asian offices.

Luxasia is a leading distributor of renowned global fragrances and cosmetics brands in Asia. Luxasia carries some 50 brands including Yves Saint Laurent, Guerlain, Bvlgari, Burberry, Calvin Klein, Davidoff, Salvatore Ferragamo, Carita and Decleor.

Established in 1986 in Singapore, Luxasia has expanded across the region employing at least 900 staff in 10 countries, namely Singapore, Malaysia, Indonesia, Thailand, Philippines, Taiwan, Hong Kong, China, India and Vietnam.

The regional headquarters in Singapore is the nerve centre for the group’s marketing and distribution activities, serving as the warehousing and support hub to all the other affiliates in the region.

In the Malaysian office, Luxasia has about 70 staff operating out of its office in Kuala Lumpur and a warehouse in Subang Jaya. The Malaysian office had been using a DOS-based accounting solution since the late 1990s, and it also did not have a computerized inventory management system in place.

As its business expanded in Malaysia, Luxasia realized that its existing solution had outlived its usefulness and needed to be replaced by a fully integrated enterprise solution.

“Being a wholesale distributor, we process an average of between 80 to 100 transactions a day. The previous system was based on batch processing could not cope with increasing sales orders as the process requires manual confirmation on stocks availability,” says Robyn Lim, Financial Controller, Luxasia (M) Sdn Bhd.

This process was “administratively clumsy” as there would be a flurry of faxes and telephone calls between the headquarters and the warehouse, she explains. Often, invoices had to be amended several times because of changes in stock availability confirmation. “It was time consuming and very stressful for the staff,” she adds.

The system also could not provide detailed nor timely reports and analyses, and this handicapped the management in terms of effective decision-making. “It could not meet our reporting needs, especially for our sales and management team,” Robyn adds. “Often, to extract the information that we needed was a tedious and time consuming process.”

For a company like Luxasia, which distributes over 10,000 fast moving items, having a highly efficient inventory management system is critical. Warehouse operations were then managed on a manual tracking basis. Warehouse staff would typically bin (or store) items received based on memory. This meant only certain pickers were aware of the location where specific items were binned.

Due to high volume transactions, the binning and picking activities soon became very inefficient. In many cases, items available in the warehouse could not be located, and the situation was exacerbated with staff turnover.


Solution

Luxasia essentially needed a new solution to efficiently consolidate information between the head office and the warehouse; provide real time business information and to automate inventory management.

After evaluating several offerings, Luxasia chose Microsoft Dynamics™ NAV, a business solution used by over 35,000 small to mid-sized companies in over 50 countries. Rolled out at the Malaysian office in September 2003, the Dynamics modules deployed included General Ledger, Accounts Receivables, Accounts Payable, Cashbook, Inventory, and Warehouse Management System.

The implementation was undertaken by Microsoft Certified Partner Advance Infosys Sdn Bhd. “Advance Infosys handled the customization of specific reports as well as provided training and technical support. They helped ensure a smooth implementation,” says Robyn.

“The Singapore headquarters saw what we had and was impressed by Microsoft Dynamics™ NAV. The management decided to deploy it in Singapore as well,” Robyn says. Navision has subsequently been implemented for the Hong Kong, Philippines, Indonesia, Taiwan and Thailand offices, and is scheduled to be rolled out to the rest of Luxasia’s offices in Asia by mid 2006.

According to Robyn, Dynamics was selected because it was a fully integrated Windows-based solution which caters for future expansion.

Navision is also able to support Luxasia’s changing requirements as its business grows. “For example, we will be opening our own salon in Starhill Gallery, Kuala Lumpur and we want to capitalize on the opportunities for cross-selling. Navision’s Customer Relationship Management (CRM) module will enable us to do this,” she adds.

“As Dynamics is a Microsoft product, we know it will be compatible with our other Windows-based applications such as Microsoft Office. For example, Navision can easily export to Excel,” Robyn explains.


Benefits

Sales Processing Faster by 70 per cent
With Navision, Luxasia has integrated its financial, sales and warehousing operations, resulting in improved efficiencies and less errors. Sales order processing and sales invoicing lead time has improved tremendously – by over 70 per cent, says Robyn. “By processing orders faster, we are able to reduce the warehouse activities lead time compared to the DOS-based Accounting system.”

Unlike the old system which operates on batch processing, Navision provides for real-time processing. Previously, items and quantity in a particular sales order would often need to be changed several times before the order can be confirmed to the customers. “Now, with real-time stocks availability verification, an order can be processed and finalized almost instantly.”

“Navision has definitely helped improve inventory control. This translates into efficient management of items availability and delivery, resulting in better planning of inventory level,” Robyn adds.

Enhances Efficiency of Warehousing Processes
Dynamics’ Warehouse Management System (WMS) has automated several manual warehouse processes, resulting in greater efficiency and productivity. According to Robyn, put-away and picking activities at the warehouse are now more systematic as a result of the WMS implementation.

Previously, warehouse staff had to depend on their memory when they were asked to pick the items. Not only did this cause delays but often the pickers could not locate the items as they had forgotten which bins the items were in. This adversely affected the performance and efficiency at the warehouse because they could not fulfill orders even though the required products were available somewhere in the warehouse.

“With WMS, the system tells you exactly which bins to go to for the required items. There’s no guesswork involved anymore. Picking items on a 'First-In First-Out’ (FIFO) basis is now made possible with the proper tracking of items received.”
Turnaround time for picking activities has improved significantly. “Now, on average, if an order is received today before the scheduled cut-off time, the staff can finish picking it before day end. Previously, it would only have been ready at the end of the next working day,” she adds.

Robyn also says that with WMS, physical verification works on soiled, damaged and returned items from customers can be managed and monitored more effectively.

Improves Decision-Making
Dynamics’ comprehensive yet user-friendly reporting capabilities has given Luxasia a greater visibility into its operations and enhanced its decision-making process.

Robyn says: “Management reporting is always a challenge as there are many reports required for financial and business decision making.”

“For example, the management needs to have the detailed Profit and Loss Analysis of every brand under us. Unlike the old system, Navision is able to churn out these reports with no issues at all.”

Navision has also empowered the sales and marketing personnel to get required reports by themselves. “The sales personnel need not trouble the accounts personnel anymore for latest information on their sales performance,” Robyn explains.

“The real-time feature in Navision updates the day-to-day processing entries instantaneously. Therefore, any analysis required is made available on real-time and self-service basis to the Sales and Marketing Team.”

Competitive Advantage
When Dynamics is fully rolled out to all of Luxasia’s offices in the region, the Singapore headquarters will have a real-time view of stock levels across the region.

“We are a trading company, so it is vital that we know our inventory cost as well as details such as the aging of the inventory. Being able to get such information from across the region at the touch of a button is highly advantageous for Luxasia.”

“The Navision system enables the Group to monitor and maintain optimum stock levels, and this is absolutely critical for us,” says Robyn.

“Luxasia is expanding very fast and we need to face the challenges of globalization with very agile business strategies. Navision has supported us in many situations that require real flexibility to adapt to changes in our business environment,” Robyn concludes.

Overview
Country: Malaysia
Industry: Retail

Customer Profile
Luxasia is a leading distributor of global fragrance and cosmetics brands. It was established in 1986 in Singapore and has since set up offices in 10 Asian markets.

Business Situation
As its business grew, Luxasia was handicapped by a DOS-based accounting solution at its Malaysian office. Many business processes were manual and it also did not have a computerized inventory management system in place.

Solution
Luxasia selected Microsoft Dynamics™ NAV. The modules deployed included General Ledger, Accounts Receivables, Accounts Payable, Cashbook, Inventory, and Warehouse Management System.

Benefits

• Sales Processing Faster by 70 per cent
• Enhances Efficiency of Warehousingd
• Improves Decision-Making
• Competitive Advantages

Software and Services

Products

• Microsoft Dynamics™ NAV
  
  

For More Information
To access information using the World Wide Web, go to: www.microsoft.com/malaysia

For other case studies in this series, visit www.microsoft.com/malaysia/business/ casestudies

For more information about Advance Infosys Sdn Bhd’s products and services, call +603 7723 2278 or visit the Web site at:
www.advanceinfosys.com

For more information about Luxasia’s products and services, call
+6(03) 2162 8899 or visit the Web site at: www. luxasia.com