Microsoft DynamicsCustomer Solution Case Study

Agricultural Products Provider Builds Agile Business with Microsoft Dynamics AX

OverviewHeadquarters: United Kingdom, with 15 global subsidiaries.Annual sales: Ca. £1 billion (approximately US$1.55 billion) annuallyIndustry: Manufacturing

Customer ProfileAB Agri, a subsidiary of global enterprise Associated British Foods (ABF), operates around the globe to provide agricultural products and supporting services to a large variety of businesses in the food, drink, and biofuel industry supply chain.

Business SituationAB Agri sought to gain greater agility in responding to rapidly changing customer needs and manage its global growth efficiently while controlling costs.

SolutionAB Agri deployed Microsoft Dynamics AX as its main ERP system

Benefits Efficiently support a growing, global

manufacturing and distribution business Satisfy customer needs promptly and

cost-effectively Generate efficiencies throughout the

operation Realize profitable business strategy Reduce the cost of technology

ownership

“By using Microsoft Dynamics AX, we have real-time insight into our costs and margins, and as a consequence we achieve better results.”

Malcolm Beaton, Commercial Director, AB Agri

A worldwide provider of agricultural products, AB Agri runs a rapidly evolving business, with manufacturing operations in many countries, a large vendor network, and stringent requirements for manufacturing management and cost control. The business supplies products and services to farmers, feed and food manufacturers, processors, and retailers. In looking to streamline business processes and efficiently pursue its international growth aspirations, the company implemented Microsoft Dynamics AX as its enterprise resource planning (ERP) system. In many areas of the business, the company has taken advantage of Microsoft Dynamics AX to generate cost reductions and efficiencies. In addition, AB Agri uses the ERP system to meet the needs of customers in fast-moving markets and realize its strategy in a profitable manner.

SituationAB Agri is a division of Associated British Foods (ABF), a worldwide, diversified food, ingredients, and retail organization with annual sales revenues of close to £11 billion (approximately US$16.9 billion).While AB Agri’s core business is at the heart of the agriculture industry, its activities stretch from the farm to the supermarket shelf. This unique breadth and experience enables it to add value and generate profit for businesses all along the supply chains of the food and drink industry. The company employs approximately 2,000 people, and generates an annual revenue of £1 billion (approximately US$1.55 billion).

AB Agri operates through more than 15 subsidiary businesses, with products comprising compound and blended animal feeds, specialist nutrition for livestock and pets, and micro-ingredients for animal feeds. Offerings in the company’s service portfolio include sustainable supply-chain management solutions and near-infrared calibrations for use in the feed, plant, and specialty market segments. In the United Kingdom, AB Agri maintains more than 20 production sites and is the country’s largest provider of animal feeds and related services.

Complex Business Model and Fast-Moving MarketsAB Agri’s relatively complex business structure presents a number of unique, closely interwoven challenges. In the markets where AB Agri trades, changes in costs and customer needs can manifest very quickly.

Lead times in the industry tend to be short, which means AB Agri needs to maintain a high level of flexibility and firm control of its material requirements planning and

manufacturing management across all production locations. This information control is absolutely critical; particularly given the added complexity arising from AB Agri’s extensive product range and diverse customer profile.

Business Insight RequirementsAt AB Agri, cost control requirements extend to many different areas of the business. For example, product formulations need to incorporate the lowest-cost components available, and production planners and purchasers have to be able to track the quickly changing costs of raw materials. At the same time, they also need to make sure manufacturing operations make timely use of components that have an expiration date and avoid having to repurchase them. Mark Deansmith, IS Director at AB Agri, explains, “We required the ability to exchange data between our ERP system and other systems.”

Because AB Agri expects continuing international growth, its ERP system needs to be able to scale globally, supporting a large variety of business operations and relationships with customers and vendors.

SolutionAfter a review of leading ERP systems, AB Agri implemented Microsoft Dynamics AX for its operations in the United Kingdom. The main Microsoft partner assisting with the company’s implementations of Microsoft Dynamics AX was the HSO Group. Today, 650 AB Agri employees use the solution.

By implementing Microsoft Dynamics AX, AB Agri took an important step in building a unified business infrastructure that facilitates an unimpeded flow of

“With Microsoft Dynamics AX, we can support any business activity, of any complexity and in any location, in a cost-effective manner.”

Mark Deansmith, IS Director, AB Agri

information. Microsoft Dynamics AX integrates with the following key technologies in use at AB Agri: Microsoft SQL Server to facilitate critical

reporting functions and help managers exercise control of operations, costs, and business performance.

Microsoft SharePoint Server to support collaboration and information sharing among employee teams.

Multiple process control systems provide directional integration, enabling ERP information to be reflected throughout the process control systems. Managers also send the company’s production plan from the ERP system to the process control systems for realization.

AB Agri uses the Application Integration Framework in Microsoft Dynamics AX to connect the ERP system with the systems of high-volume vendors, exchanging production data and other business information. Every week, the AIF supports the loading of approximately 10,000 XML documents. To facilitate efficient messaging between the vendors and AB Agri, the company deployed Progress SonicMQ within the ERP infrastructure.

Many employees make use of bi-directional data exchange between Microsoft Word and Microsoft Excel and Microsoft Dynamics AX to perform large-volume data-entry tasks and updates efficiently.

A distribution-planning system from Paragon Software Systems.

A commodity-trading package from HSO Group.

AB Agri followed two main scenarios in making Microsoft Dynamics AX available to the different Business Units that gained access to the new ERP system. In the smaller organizations, implementations often took 10 weeks or less. The complexity of the larger businesses required more

sophisticated integration, some customization, and very thorough testing.

Currently, AB Agri is preparing a rollout of Microsoft Dynamics AX in its operations in North and South America and Southeast Asia.

Efficiently Support a Growing, Global Manufacturing and Distribution BusinessWith Microsoft Dynamics AX, AB Agri owns an ERP system that can scale globally to support the company’s worldwide business operations and trading relationships. Richard Cloke, Group Finance Director at AB Agri, says “When we implemented Microsoft Dynamics AX, we gained a robust ERP system that had the ability to support our relatively complex manufacturing environment. That in itself is a huge accomplishment. Even better, we are able to extend the solution to our global operations, which are changing and growing rapidly. The solution’s effectiveness in multiple, demanding scenarios demonstrates its flexibility and scalability.” Deansmith, adds, “With Microsoft Dynamics AX, we can support any business activity, of any complexity and in any location, in a cost-effective manner. Its ability to interface simply with other systems is also of huge benefit.”

Satisfy Customer Needs Promptly and Cost-EffectivelyToday, AB Agri uses Microsoft Dynamics AX as an important resource in maintaining its competitive strength and agility in meeting customers’ requirements.

Generate Efficiencies and Savings Throughout the OperationBy using Microsoft Dynamics AX, AB Agri generates valuable efficiencies and cost controls in many areas of the business. For example, the solution allows compliance

“We have taken advantage of Microsoft Dynamics AX to improve data visibility and process clarity.”

Alex Masih, Operations Director, AB Agri

with complex labeling requirements. It also facilitates traceability of all materials used in manufacturing. With integration to vendor systems through the Application Integration Framework, AB Agri manages streamlined vendor relationships through its extensive use of XML-based transactions. In the IT department, standardizing on Microsoft Dynamics AX and other Microsoft tools has reduced the cost and complexity of administrating technology.

Realize Profitable Business StrategyFrom supporting efficient regulatory compliance to facilitating timely, strategic action, Microsoft Dynamics AX helps AB Agri leadership take firm control in moving the business forward. Malcolm Beaton, Commercial Director at AB Agri, says, “I truly appreciate the visibility and reporting flexibility that Microsoft Dynamics AX provides us. It’s a huge step forward from other systems that I have worked with. By using Microsoft Dynamics AX, we have real-time insight into our costs and margins and as a consequence we achieve better results.”

Reduce the Cost of Technology OwnershipBy making use of existing investments in Microsoft technology within the context of the ERP system implementation, AB Agri

succeeded in reducing the total cost of

technology ownership significantly. Because Microsoft products such as SharePoint Server, SQL Server, and Microsoft Office software complement and extend the ERP system in many ways, AB Agri could draw on them instead of acquiring additional functionality. What’s more, the IT team at AB Agri already had the skills to manage Microsoft Dynamics AX effectively, together with the other components of the Microsoft technology environment. Deansmith notes, “Using a cautious estimate, we reduced our technology operational costs by approximately 50 percent by building on to the Microsoft infrastructure already in place.”

Additional Resources Learn more about Microsoft Dynamics

AX for the manufacturing industry. Explore deployment options for

Microsoft Dynamics AX. Understand the service plans that

support Microsoft Dynamics solutions.

Microsoft DynamicsMicrosoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar

Microsoft software such as Microsoft Office,

For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about AB Agri products and services, call 011 (44) 01733 422161 or visit the website at: www.abagri.com/page2.cfm?pageid=852

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

Document published October 2012

Software and Services Microsoft Dynamics− Microsoft Dynamics AX

Microsoft Server Product Portfolio− Microsoft SQL Server− Microsoft SharePoint Server

which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company has already implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.  For more information about Microsoft Dynamics, go to:www.microsoft.com/dynamics