Date: 12 Feb 2009
Location:
As written by Miriam Hechtman and published in Inside SAP Magazine.
Quick Facts
Website: www.autonexus.com.au
Key Challenges: Resourcing the project and also running the business at the same time without impacting services provided to the customer or the budget
Project Objectives: To implement an integrated system solution to support the AutoNexus vehicle logistics operation, parts logistics operation and finance requirements. The solution had to address the existing business issues and provide a platform to support growth
Solutions and Services: ECC 6.0 - WM, MM, CS, SD, FICO and BI
Why SAP Solutions: AutoNexus undertook an extensive selection process covering business requirements (including scripted demos), vendor and product stability and project cost. SAP scored the highest
Implementation Highlights: In the first month of Go-Live for AutoNexus's largest parts customer, they had their largest sales month. All orders were processed and AutoNexus achieved a DIFOT (Delivered In Full, On Time) result of 99.8 per cent
Key Benefits: Visibility across the operations due to RF and SAP being an integrated solution
Existing Environment: Mix of customer systems, mainly IBS and Reynolds solutions
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SAP Version: ECC 6.0 |
Background
With around 350 staff dispersed over 10 sites across Australia, AutoNexus provides a complex array of solutions for the automotive industry. To offer these services to its broad customer base, AutoNexus' business system is heavily reliant on customer data and interaction. In an effort to deliver these services under one system, the search was on for an integrated systems solution to support their business operations.
After evaluating a number of systems, SAP was chosen for the way in which it could support AutoNexus' vehicle and parts logistics operation requirements. Katina Braoudakis, supply chain system manager for AutoNexus, says: "We also looked at the numbers to determine if they were going to stack up in terms of licensing and implementation costs." Ensuring that the system would be a long-term solution and be supported in the market in the future were also key considerations for the company. Extend Technologies was selected as the implementation partner and SAP ECC 6.0 was chosen as the most appropriate system solution for their business requirements.
Prior to implementing SAP, the company had used disparate systems, making effective operational control difficult and only offering limited functionality in its configuration. "We wanted the one system so we could operate effectively, with the sites seeing everything they had to do under the one site, and to increase the capabilities that we currently have," says Braoudakis. The previous system also limited the scope of services that AutoNexus could offer to new or existing clients, with some of their existing customers being managed manually.
AutoNexus also relied heavily on its customers' systems to provide services, so when they brought a customer on board they would have to utilise the customer's host system. "This obviously made it very difficult for us because if we wanted to know what was going on with one customer we had to log on to that customer's system," says Braoudakis. They were also then limited by the capacity or capability of the customer's system.
In addition to addressing these existing business issues, AutoNexus was looking for a business application that would provide a platform to support the company's growth, "because we have seen very strong growth over the last few years and the plans are to continue with that growth," says Braoudakis.
Key Challenges
"Our biggest challenges have been resources and the operations support," says Braoudakis. From the start of the upgrade, AutoNexus chose to build a project team comprising their own staff who knew the business well and also knew what needed to be achieved in terms of delivering the project. "We made a fairly large commitment in terms of resourcing the project. We didn't want to bring in a bunch of consultants who put this thing together for us and then the day they left, we had no knowledge in the company."
To staff the project team, 35 key employees were pulled out of the workforce. "That's probably been the biggest challenge throughout the whole project - having those resources out of the business but still making sure that the business operates effectively, continues to meet its budget and continues to fulfil customer requirements," says Braoudakis. The 35 employees also had to be skilled up in SAP from a relatively low technology base, and brought up to speed on the ins and outs of working on a project, as few of the team members had previous project experience. "That's one thing we probably could have done a bit better - getting them a little more prepared from a project perspective and introducing more training in terms of project management."
There was also the fear that the switch to a new system would be rejected by staff because they didn't know how to use it and therefore wouldn't feel as confident. "The reaction to the system was always going to be our biggest concern and particularly with interstate sites because you're not there and you can't help them as easily," says Braoudakis.
Though there were no major issues during the process, says Extend Technologies general manager, business development, Dawie Gerber, working within a tight timeframe proved slightly challenging, specifically around the change management aspect. "We had to get the business ready and get the users trained and the fact that they're a true national organisation provided some minor challenges."
Implementation
In March 2007, AutoNexus received approval from its parent company Inchcape to go ahead with the implementation of SAP. Extend Technologies accompanied AutoNexus in June 2007 to obtain input from Inchcape's Singapore and Hong Kong businesses before commencing the blueprint phase. The realisation phase began in November 2007, and the first customer Go-Live was in April 2008.
Braoudakis says the most important thing the company has done throughout the process is to document all procedures and work instructions. "Effectively we weren't going to go live unless all of our work instructions and our processes were documented. You need to make sure that the users are effectively trained and you need to make sure that you have effective documentation, otherwise you won't be able to support it," says Braoudakis.
Due to fluctuating demand and the need to expand and deploy the casual workforce meant that the end users' interaction with SAP had to be fairly simplified to bring new staff members up to speed quickly, says Gerber. "So the business decision they took was to ensure that all their end users who work out in the vehicle compounds or the parts warehouses actually interacted with the system only via Radio Frequency (RF) guns," says Gerber. "One part of the project was for their parts warehouses to use the SAP Warehouse Management console complemented by a partner product."
As there was no standard off-the-shelf package, Extend Technologies built a custom Windows-based application for the users interacting out of the vehicle compounds. Being a third party logistics provider, the majority of AutoNexus' instructions and interactions with their customers comes via interface, says Gerber. "So there's very little data entry from an operator point of view." The main users of the system may be sitting in finance but the rest of the information comes into the system via interface. Consequently, Extend Technologies had to build around 36 interfaces within the scheduled delivery timeframe. "Being interfaced creates some intricate issues as well because you can't really necessarily cover all the bases. But we managed to get through that and they're running today a fairly stable environment of all those interfaces."
For Go-Live, the approach taken was to roll out SAP on a customer brand by brand basis. "In hindsight that worked really well because that contained the Go-Live and reduced the number of sites that needed to be supported initially," says Gerber. "It wasn't a national Go-Live, so from a change management and support point of view it made it a lot easier."
AutoNexus' largest and most recent customer, however, was Subaru, which had a national Go-Live in October 2008. "By that stage most of the issues had been sorted out and the pragmatic, conservative approach that was taken from the get-go proved to be a very prudent one in terms of the support and the system's ability," says Gerber. "So when it came to Subaru, which has very high data volumes, the staggered roll-out approach proved to be the right decision."
This steady approach allowed AutoNexus to benefit from ongoing training and up- skilling throughout each implementation. After the initial roll-out was completed by Extend Technologies, by the time the third customer was ready for Go-Live, AutoNexus was able to complete many of the activities internally with less support required from Extend.
"Now we're in a position where we actually do those implementations ourselves for a lot of our smaller customers and some of the local customers," says Braoudakis.
Results
At this stage, Braoudakis says the key benefits from having implemented SAP result largely from the increased visibility that the system provides. "Anyone can log on to the system and actually know exactly what's happening in the business," says Braoudakis.
All of AutoNexus' operations are now run using RF technology, which provides real-time visibility. Staff can now see real-time status for customers on their part and vehicle processing and are also able to see when there is outstanding work and then schedule resources to meet customer requirements. Additionally, says Braoudakis, visibility facilitates "knowing where we are at any time in the month, particularly when it come to billing for services and knowing what the customer priorities are for processing vehicles and parts".
A key advantage is "definitely the standardisation of the way they interact with customers," says Gerber. "They've developed a backbone in SAP which is only one business process and then it doesn't matter which customer they deal with. It is one standard interface out to that customer."
Month-end processing and management reporting has also been improved, as running all these functions under one system has made it consistent, says Gerber. "Before they would have run roughly 12 different systems and had to try and export data and reconcile that in say, Microsoft Excel, and now they just have to run it out of SAP."
As a growth organisation, the company is able to now acquire new customers and get them live on to an SAP system very quickly.
"It is a sales point for AutoNexus to say, ‘We've got systems and processes in place that we can hook you into quite easily and get you up and running fairly quickly," says Gerber. Braoudakis agrees: "A seamless transition is key to a successful introduction of new customers and SAP is the enabler."
Looking into the future, Braoudakis says, "There are still more gains that we expect. A key area for AutoNexus is also the implementation of Business Intelligence to take full advantage of the information that is available in SAP."