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Improving enterprise resource planning with Microsoft Dynamics AX | 01

Leading hydraulics company harnesses the power of customer insight with Dynamics AX.“One of the biggest benefits of the new system is the ability to make smarter decisions based on customer data. Dynamics AX gives us visibility across the company and enables us to take the right product to the right customer at the right time.”Mark O’Leary, Chief Executive Officer, Custom Fluidpower

Custom Fluidpower provides hydraulic and pneumatic products and services to some of Australia’s largest mining, agricultural and industrial companies. The business has grown rapidly since its formation in 2000 and now has around 200 employees located in eight branches across Australia. Custom Fluidpower’s business relied on manual and inefficient processes. The company’s ageing enterprise resource planning (ERP) system treated each site as an independent company, which complicated reporting and data sharing. Consequently, the company was wasting time and resources, and lacked a holistic view of its business. To solve these problems, Custom Fluidpower upgraded its ERP system to the latest version of Microsoft Dynamics AX. It now enjoys a far deeper insight into its customers, sales and overall business. It has also developed more efficient processes, gained tighter control over operations, improved customer service and laid a foundation for continued growth.

Custom Fluidpower

Industry: Manufacturing and services

Location:Australia

Organisation size:200 employees

Organisation ProfileCustom Fluidpower is an Australian-owned company that manufactures and distributes hydraulic and pneumatic products, and designs, installs, commissions, services and repairs hydraulic systems. The company serves the aerospace, agriculture, exploration, industrial, marine and mining sectors.

Business SituationTo support business growth, Custom Fluidpower needed to update its enterprise resource planning (ERP) system to improve processes for stock management, quote generation and warehouse activities. It also wanted to gain deeper insights into its interactions with customers.

SolutionCustom Fluidpower upgraded to Microsoft Dynamics AX and transitioned to Business Ready Licensing. The company deployed modules for supply chain management, data analysis, financial management and warehouse management, and implemented new customer relationship management capabilities.

Benefits• Increased visibility of

company data• Streamlined processes• Required minimal training

to use• Improved customer

service


Business NeedsEstablished in 2000, Custom Fluidpower is an Australian-owned company that manufactures and distributes hydraulic and pneumatic products including pumps, motors, valves and filters. It also performs system design, installation and commissioning, and service and repairs. Custom Fluidpower serves clients in the aerospace, agriculture, exploration, industrial, marine and mining sectors. The company has around 200 employees located in branches in Brisbane, Emerald, Mackay, Melbourne, Naval Base (in Western Australia), Newcastle, Perth and Singleton (in New South Wales). For Custom Fluidpower’s customers, machinery downtime is costly. When customers need products, the company must supply them quickly, and constantly keep clients updated on order status and the progress of projects and repair work. “The parts we supply and services we provide are integral in ensuring a piece of machinery or equipment works,” says Chief Executive Officer Mark O’Leary. “We have to be able to track the progress of products that are coming from overseas and update customers on particular projects and repair jobs. “When we’re solving a problem, time is of the essence, particularly for a large mining company or port facility, as any machinery downtime is worth a lot of money.” Custom Fluidpower previously used an ERP application to monitor and manage its operations, supply chain, inventory and orders. But as the company grew, this system was no longer adequate, and the company wanted to take advantage of the latest technologies.

“We also needed to improve our processes, increase customer insight, and prepare the business for future growth,” says O’Leary. “For example, our warehouse staff dealt with each picking slip individually. When a slip came through, staff would have to collect it, go to the warehouse, pack the order and ship it off; then there would be another slip waiting. There was a lot of going backwards and forwards from store locations to packing areas.“Upgrading would provide an opportunity to look at how we were doing things across the company and to streamline our processes.”The existing system treated each site as a separate company, which made reporting and sharing data between sites complicated and prone to error. “Staff were duplicating certain processes and repeating tasks, and we needed to automate many of our manual processes,” says O’Leary. “We also needed a better customer relationship management system to capture customer and sales details, streamline our quotation process, and allow for expansion into online product sales. “We wanted new, more effective ways to monitor and manage inventory across our sites.”

SolutionIn March 2011, Custom Fluidpower upgraded its ERP system to the latest version of Microsoft Dynamics AX and transitioned to the Microsoft Business Ready Licensing model. Scalable Data Systems, a Microsoft Gold Certified partner for Enterprise Resource Planning, upgraded the applications and data from its own office in Brisbane and deployed the system at Custom Fluidpower’s head

“When we’re solving a problem for a large mining company or port facility, time is of the essence as any machinery downtime is worth a lot of money.” Mark O’Leary, Chief Executive Officer, Custom Fluidpower


office in Newcastle. After a number of practice runs, the system went live over one weekend. “When we came in on the Monday morning following the implementation, it was business as usual,” says O’Leary. “Communication from Scalable Data Systems was brilliant and it was a painless transition. We didn’t lose a trading day; in fact, we ended up having our second-best month of the year in terms of revenue.” Scalable Data Systems specialises in providing IT services to the manufacturing industry. In July 2011, it won the Microsoft Dynamics Partner of the Year award for Manufacturing. The IT integrator has worked with Custom Fluidpower for nearly 10 years. “As Microsoft and Scalable Data Systems have grown, Custom Fluidpower has grown with us,” says Cathy Forrest, Customer Planning and Strategy at Scalable Data Systems.As well as upgrading the ERP system and migrating all data to the new application, Scalable Data Systems advised on architecture and infrastructure requirements and provided training and testing troubleshooting throughout the implementation. “We encouraged Custom Fluidpower to move from a pay-per-module arrangement to Business Ready Licensing,” says Forrest. “This gave the company a core set of modules that covered most of its requirements at a very low cost.”The Microsoft Dynamics AX system gives managers a clear view of business data, including sales, operations, procurement, warehousing, inventory and financial activities. It supports and helps automate Custom Fluidpower’s

processes for supply chain management, financial management, data analysis, warehouse management and sales. The system also includes Scalable Data Systems’ Landed Cost module, which helps allocate and track shipment costs for imported products. Custom Fluidpower uses the package’s customer relationship management (CRM) module to generate quotes. These features will also help with the company’s plans to sell products online in future. “Dynamics AX gives us a solid foundation on which we can build applications to manage our specific market dynamics,” says O’Leary. “As we become increasingly familiar with the system, we are finding more useful features.”

BenefitsThe Microsoft Dynamics AX system has given Custom Fluidpower powerful new capabilities. The company can now scale its ERP capabilities to support new users, new locations and new lines of business. The company is better prepared to meet current business challenges and achieve its growth plans. Custom Fluidpower’s business has grown 20 per cent over the past 10 months – thanks in part to its more efficient processes and improved customer service with Dynamics AX. Increased visibility of company dataCompiling and analysing data from Custom Fluidpower’s disparate sites has delivered greater operational insight, and staff can make more confident decisions based on data from multiple sources. “We now have better visibility of data from each branch, and we can perform more complex analyses,” says O’Leary. “Business data is a powerful tool, and now that we can interpret it in a consistent way,

“Communication from Scalable Data Systems was brilliant and it was a painless transition. We didn’t lose a trading day; in fact, we ended up having our second-best month of the year in terms of revenue.” Mark O’Leary, Chief Executive Officer, Custom Fluidpower


we can make faster and more informed decisions.Dynamics AX has also allowed Custom Fluidpower to develop best practice processes for tracking and following up customer quotes. “We can now clearly forecast our revenue three to four months in advance,” says O’Leary. “We have a conversion rate of just over $1 in sales for every $3 of quotes, with 90 per cent correlation between forecast and actual revenue within the three-month window. “This means our senior managers do not have to concentrate on next week’s or next month’s revenue. Instead, they can focus on developing the business over the next quarter, and looking at new market opportunities without the added pressure of managing day-to-day revenue activities. Microsoft Dynamics AX integrates easily with Custom Fluidpower’s Microsoft Office applications, making it even easier to share information. “Tighter integration with Microsoft Excel, in particular, is extremely handy for data analysis,” says O’Leary. “We can very easily import data from Dynamics AX into Excel spreadsheets. We plan to use this capability more in future.” Streamlined processes Streamlined and integrated processes have helped staff reduce data duplication and manual errors, and have increased overall efficiency. Custom Fluidpower also has better visibility of inventory, which has simplified procurement and improved tracking and control procedures. O’Leary says the company’s warehouse activities are also more efficient – from picking and packing to shipping and quality control.

“Rather than dealing with each picking slip individually, we can now do bulk pick runs, which saves a lot of time.” Required minimal training to useThe familiar, intuitive user interface has helped employees quickly become proficient with the new system, minimising training time.“We didn’t need a significant amount of training, as Dynamics AX is a very user-friendly system,” says O’Leary.“Many employees have commented on the fact that the new system is just so easy to use." Improved customer serviceAs a result of its improved processes and more complex, meaningful data analysis, Custom Fluidpower is now providing better service to its customers. “One of the biggest benefits of our new system is the ability to make smarter decisions based on customer data,” says O’Leary. “More in-depth, accurate data means we are better able to keep up with our customers’ needs.“Microsoft Dynamics AX gives us visibility across the entire company and enables us to take the right product to the right customer at the right time. For example, we can now take an entire hydraulics solution we created for a customer from Western Australia and implement it in New South Wales; then take that same system, improve it and apply it at a mining site in Queensland. “Communication with our customers is a lot clearer and more accurate, because we can always tell them where a particular item is, or how a project is coming along.”

“Business data is a powerful tool, and now that we can interpret it in a consistent way, we can make smarter decisions.” Mark O’Leary, Chief Executive Officer, Custom Fluidpower


Microsoft Product that was featured Microsoft Dynamics® AX is an adaptable enterprise resource planning solution to help you consolidate and standardise processes, gain visibility across your organisation, and simplify compliance requirements. Microsoft Dynamics AX is available in two editions and selected components can be added to it.

The product includes tools to:• Help you integrate and

exchange data from multiple systems and processes

• Automate supply chain collaboration

• Centralise processes• Reduce risk and liability associated with corporate governance, regulatory compliance and customer initiatives.

For More Information For more information about Microsoft Dynamics call a Microsoft Dynamics Sales Consultant on 1800 197 960 Monday to Friday 9am to 6pm AEST. To find a partner or solution, visit http://dynamics.pinpoint.microsoft.com/en-AU/home This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.Document published November 20111111/CFP

Partner InformationScalable Data SystemsMicrosoft Enterprise Resource Planning – Gold PartnerCertified for Microsoft DynamicsDynamics AX Manufacturing Partner of the Year [email protected]:USA: +1 (425) 512 8711UK: +44 (0) 15778 40675Singapore: +65 (0) 6622 5793Sydney: +61 (0) 2 8908 4500Brisbane: +61 (0) 7 3851 7300Melbourne: +61 (0) 3 9864 2500Perth: +61 (0) 8 9216 7700Within Australia: 1300

Technical InformationSoftware and ServicesMicrosoft Dynamics® AXIT IssuesCustom Fluidpower wanted to upgrade its enterprise resource planning system to eliminate inefficient processes, improve visibility and analysis of data, and support business growth.

http://dynamics.pinpoint.microsoft.com/en-AU/home

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