Replacing a bespoke legacy system with Microsoft Dynamics AX has delivered a smooth business transformation for Urbis Lighting which belies it power, finds Malcolm Wheatley.
This article follows a case study of a company where:
- A bespoke legacy system was posing excessive IT risk.
- Dynamics AX offered proven ERP capabilities, plus company-specific add-ons.
- Linked to shopfloor touchscreen terminals and barcoding, productivity has increased and accuracy has improved.
- Dynamics AX has delivered controlled and disciplined business processes.
Part of Belgium’s Schréder Group, Basingstoke-based Urbis Lighting, as with Schréder’s other 43 companies around the world, manufactures public street lighting, and associated ‘street furniture’ such as bollards and benches.
Back in 2009, came the recognition that Urbis’s existing legacy enterprise system was posing an increasingly unacceptable risk to the business.
A bespoke piece of software that had been written specially for the company by an external contractor, it had the advantage of being honed to Urbis’s precise requirements. There were also no license fees to pay, as the company owned the software application.
Even so, says Urbis manufacturing director, Stephen Hemsley, the imperative for change was clear – not least because the core ERP capability was quite separate from the company’s accounting system, requiring cross-posting between the two.
“As the business grew and evolved, we were increasingly aware of gaps between what we wanted, and what the system provided,” he notes. “We also saw the desirability of more comprehensive reports, and more accurate information, which would give us better insights into the business.”
Most telling, though, was the business risk posed by continuing to stay with a piece of software that had but a single user – Urbis – and which had been developed by a single contractor. It was, in short, time to change.
Finding the right mix
It was not difficult to identify a replacement enterprise platform. Across the Schréder group, a number of the businesses had already moved to Microsoft Dynamics AX. Clearly, says Hemsley, from a risk reduction perspective, an adoption of Dynamics AX by Urbis would be a clear and consistent step forward.
Better still, he adds, Schréder had developed a number of enhancements to the core Dynamics AX product, and moving to Dynamics AX would provide access to these.
“There were a number of modifications that were quite specific to our group,” he recalls. “A product configuration module, for example, that suited our business much better than the standard Microsoft-supplied one. It asked a basic series of questions, the answers to which then built up the technical structure of the product, the bill of materials, and the resulting product cost.”
Accordingly, the decision was made to look for a UK-based implementation partner – a search that quickly ended with a decision to move forward with Dynamics AX specialists Columbus.
“Columbus clearly knew manufacturing well, and very quickly understood our business,” recalls Hemsley. “They made it clear that they could help us implement the core solution, install the Schréder-specific additional functionality, and work with us to drive some very targeted business improvements in terms of due date performance and operating efficiencies.”
Accordingly, work began in January 2010, with the intention of going live in the fourth quarter of the year – a timescale in part determined by the need to develop new business processes.
“Right from the outset, we knew that MRPII was going to be a massive cultural change for the organisation,” explains Hemsley. “We’d only ever had very limited MRPI before, and Dynamics AX would give us full MRPII. We were warned by Columbus not to underestimate the difference – and even with all the preparation that we put in, we probably did still underestimate it to some extent.”
The project was also delayed by a decision, taken at Schréder Group level, to use the Urbis implementation as a model for further group-wide implementations, a decision that necessitated further work on the business processes that Urbis was developing and rolling out.
“There were very detailed process descriptions to be written, and then turned into blueprints for others to follow,” says Hemsley. “We also wanted to put in place touchscreen-based factory-floor data collection and control terminals, instead of paper feedback systems, and make greater use of barcoding.”
What’s more, as with Schréder Group’s other Dynamics AX installations, the new ERP system would be hosted externally, at a data centre in Brussels, fully-replicated at a mirror site also located in Belgium.
“Group-level control of data reduces risk, a lesson Schréder had learned when a factory burned down several years ago,” sums up Hemsley. “But as well as reducing risk, centralisation also reduces cost: there’s no need for companies to each run servers and databases locally, with all the duplication and additional expense that local servers entail.”
The new system finally went live in April 2011, several months later than had been originally intended. But the wait, it seems, had been worth it. Simply put, significant aspects of the factory’s operations have been transformed.
“We’ve a lot less paper on the factory floor, with touchscreens at every workstation displaying all the bill of material information that the assembly staff need,” says Hemsley. “Linked to the use of barcodes, it’s made it much more difficult for people to accidentally use the wrong part.” In future, he adds, the system will also display work instructions on the screens, further error-proofing the assembly process.
What’s more, operators now clock-in at their terminals, rather than queuing-up four times a day at the two clocking-in machines installed in the factory. With over a hundred operatives, the savings in time are far from insubstantial, notes Hemsley.
Dynamics AX has also imposed far more discipline on the factory’s manufacturing, scheduling and procurement processes, he adds.
“Our processes are now far more rigid and controlled, and people can’t hide mistakes, or exploit loopholes,” he says. “Sales staff can’t place an order on the factory that is due tomorrow, for instance, and it’s much more difficult to circumvent the proper buying process. And we’re also benefitting from following MRPII’s recommendations, instead of second-guessing what the former system used to recommend – so stockholdings have come down.”
In all, he says, the transition to Dynamics AX has undeniably transformed the business.
“Our data is far more accurate, our processes more efficient, and after the inevitable initial teething issues our due-date performance is improving nicely,” he sums up. “And from a pure IT perspective, we’ve got a better solution, with less risk. What’s not to like about that?”