When your revenue grows 80-fold and you have 10,000 parts to keep track of — and supply 80 shops — you need a top-notch forecasting system.
That’s what happened to Auckland-based Avanti bike-maker Sheppard Industries. And it led the firm to a million-dollar upgrade of its 20-year-old legacy Quanta system. The company is installing a Lawson M3 Enterprise Management System which can both forecast and track stock.
Sheppard designs, contract-manufactures and supplies its own-brand Avanti and Specialised bikes and accessories to a network of 80 bike shops throughout New Zealand and Australia.
“We had a very high-level forecasting system for our bikes, but nothing for parts and accessories,” chief financial officer Paul Schnell says. These are 60% of the business. As the business grew, new pieces were bolted on to the old system, but this became constraining.
“There was no integration of the parts with our [legacy] ERP system and very limited functionality in the forecasting” says Schnell. For example, there were model types, but not different sizes and colours, which is the detail needed to control stock. This means you end up with a lot of stock you don’t have — and a lot that you don’t need, says Schnell.
The Lawson M3 system, which Sheppard started installing in mid-December and which should go live in May — a good time-frame, says Schnell — should solve this problem. It will integrate the New Zealand and Australian businesses, which had separate databases. But it also has innovative features that, Schnell says, are new to New Zealand. These include a “closed loop budgeting system” which allows forecasting out of the general ledger.
“The forecast is being updated with actuals, as you update [the GL], which eliminates spreadsheets and updating,” says Schnell.
The system also features the use of wireless handhelds that link back to the software for warehouse inventory, which is also new in New Zealand, says Schnell. An installer from Europe has had to come out to help implement the system.
A hardware upgrade has also been required — from Sun Microsystems to an IBM iSeries platform. Other challenges have included having to install the system during the quiet time of the year — the New Zealand Christmas holiday — because the bike business is a seasonal one. The newness of the forecasting and warehouse system modules is also a challenge. But configuration is going well, says Schnell.
“Lawson has a QuickStep template, so on Day One of starting your configuration you are a large way there,” he says. Also, the Lawson sales team quickly got their heads around what we were trying to do and gave us confidence they could get us there — and they were not too corporate, he says.
The template was a major reason why Sheppard chose Lawson. Rival bidders SAP and Oracle were not such a good fit for the company and their software was complex to configure, says Schnell.
Lawson’s Australia-New Zealand managing director Stephen Moore says the company’s M3 enterprise software — M3 stands for maintain, move, manufacture — has been specifically designed to meet the needs of industrial and distribution companies like Sheppard.
“This means we have a closer fit for purpose,” says Moore. “It’s all about optimising the supply chain”. The US-based company has other local clients, including Canterbury, Lyttelton Port, Kumfs and Rembrandt Suits.