Avoiding the dreaded IT data bottleneck

Walter Wilowski has high expectations for his company’s growth. As controller at Cartier Kitchens of Brampton, Ont., he is part of a new management group that hopes to turn this small firm from a niche player into a big-league competitor.

Cartier has long been a competitor to Canac Kitchens, North America’s leading kitchen cabinetry manufacturer. In 2003, some key Canac employees left that company and took over the reins at Cartier.

Under the leadership of the new Cartier president and owner Frank Converso, the management team aims to leverage what now totals 85 years of cabinet-making experience to expand Cartier’s market in Canada and the United States in direct competition with Canac.

The skill and craftsmanship at Cartier had already been enough to earn the quality kitchen cabinetry firm a market niche in North America. Now, nearly 20 years after the company was established, its management is focusing on data management to get the firm ready for growth.

Wilowski said the business started with a largely paper-based environment. Few processes were automated, and those that were computerized ran on Microsoft Corp. Office software and were not integrated with each other. Business management and accounting software from BusinessVision comprised the core computing system, supporting primarily manual procedures that required error-prone, repetitive re-keying of parts numbers.

For example, work orders were completed by hand, with three hard copies filed in individual binders, each managed by the corresponding sales, design/build and accounting departments. Following up on a customer query relating to an order status was onerous, with immediate responses close to impossible.

Yet, the company ran a remarkably complex operation. Every kitchen is different because every order is customized according to specifications. The company sells through several showrooms in southern Ontario and serves three separate customer bases — builders, retailers and dealers — each with different processes and needs with regard to orders, pricing and invoicing. “It’s like having three mini-businesses,” said Wilowski.

Even billing is complicated because of the industry practice that requires a job completion slip from the buyer before the kitchen cabinetry can be fully invoiced.

Wilowski recalled that his firm used a six-inch-tall binder with pages of five or six columns to represent job status through ordering, measuring, colour selection, etc. It was a full-time job for one person to keep that book up to date.

The new management team believed that an integrated ERP solution was the answer. Guided by Andreas Mueller, president of Mississauga, Ont.-based consulting firm Socratec, Cartier implemented a Linux-based Oracle Corp. E-Business Suite, including HR, order management, procurement, sales contracts and financials, to streamline its work-order processing, financial management and human resources functions.

At press time, order management was the only component Cartier had yet to implement. Just days away from going live, the implementation was slowed by the need to integrate the pricing and specifications of 6,000 items in Cartier’s cabinetry catalogue with computer-aided design and sales software from Montreal-based 20-20 Technologies Inc.

When fully implemented, the new system will replace Microsoft Access to track orders, production and shipping.

Already, the kitchen manufacturer claims to have doubled the work order capacity of its staff.

Mueller noted that it was easy to adapt the Oracle system to automate the complex completion slip process. Wilowski added, “We get the best of both worlds where we can invoice the customer based on completions when the kitchen is actually fully finished but we record sales based on shipments.”

Further, the system generates a report every morning on the sales until they are com- pleted, flagging any service issues or other reasons for incomplete installations.

The company said it also optimized its cash flow and improved forecasting, scheduling and fulfillment control of builder contracts. “One of the reasons we picked Oracle is that we want a system we can grow and not have to switch systems in four or five years’ time,” said Wilowski. “We are doing more than 30 kitchens per day but we have the capacity to do a lot more.”

Eventually, a virtual private network will transfer orders and customers will use the Cartier version of 20-20 Technologies’ software to place their orders. Wilowski said he is confident that Cartier’s data management capabilities now fit the goals of his firm, which is not content to stay small.

Fast forward a few years and Cartier just might be as expansive as Polytech Products Inc., a Calgary-based manufacturing company that specializes in hydronic heating and potable water products.

Established in 1991, the firm originally developed its HeatLink radiant floor heating and snow melting product, its TwistSeal distribution manifolds and its AquaLink potable water systems for the North American market.

Polytech manufactures about 60 per cent of its products in Canada, with the remainder produced in the U.S. and about five other countries.

Although it currently takes in about $15 million in annual sales, selling and purchasing in a global market presents considerable challenges.

“The intricacies of our business for a company our size presents tremendous problems in managing data,” said CFO Gary Thompson.

An IT department of four supports the 80-employee company. Until recently, the business had a homegrown IT system based on FileMaker Pro database software. Four stand-alone packages “had been developed and tailored by someone in-house basically to make their job as simple as possible,” said Thompson. “There was no reporting and no controls. We couldn’t manage the sales we had, let alone add any.”

As shipments left the warehouse, the inventory package would export data to the accounting package. But the accounting system sometimes didn’t import that information or, if it did, it was not a clean import.

Thompson said it would take several months to “flush out invoicing” that had not been completed and by then it would be difficult to collect payment.

Another problem was that the physical inventory never matched the cost of inventory or transactions. Synchronizing those systems was a massive undertaking.

In an effort to update its infrastructure and integrate its warehousing, financial and sales management systems to facilitate company growth, Polytech hired a third party consultant, Calgary-based EnCompass Solutions Inc. to present several choices in integrated software that handled multiple languages and currencies.

In June 2002, Polytech chose Navision’s Axapta, which Microsoft subsequently acquired and rebranded Microsoft Business Solutions Axapta. Implementation began the next month and the system went live the following December, including financials, CRM, inventory management, master planning, production management and HR management.

The company runs Axapta on HP Compaq Proliant DL360 servers in Calgary. A branch office in Mississauga and a separate manufacturing facility in Calgary are linked to head office by a multi-site connection with a DSL connection entering via Windows Terminal Services.

Thompson said the company discovered in the go-live stage about $140,000 in unbilled receivables hung up in the export from the inventory package to the financial package.

Axapta helps Polytech make better decisions, he said. He calculated $50,000 in labour savings due to error correction.

Thompson predicted Polytech’s expected 30-per-cent sales growth this year will lead to a 50- to 70-per-cent growth in sales in the next three to five years. He is confident Poly

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