SAP skins case study[1]

Skins™ Compression Garments Pty Ltd Skins™ compression garments have room to grow with SAP “Every order that we import into SAP eliminates manual entering errors and verifies that what the customer is ordering is what will be processed. This leads to less errors, shorter despatch times and ultimately greater customer satisfaction in Skins™ delivery of the customer’s order.” Mr. Ron McKellar, Finance Director, SkinsTM Compression Garments SAP Customer Success Story Textiles Company Name Skins™ Compression Garments Pty Ltd Location Campbelltown, NSW Revenue AUD$17 million Employees 45 Website www.skins.net Key Challenges ■ Legacy accounting system was hitting the wall ■ Expansion into UK and US markets required better information ■ Large garment inventory required special management ■ Reporting was clunky and slow Project Objectives ■ Develop standard method for handling large number of SKUs ■ Reduce duplicate processing between non-integrated processes ■ Introduce manufacturing resource planning (MRP) capabilities ■ Speed reporting of key sales and management data ■ Allow for further expansion of product range Solutions and Services ■ SAP Business One ■ Evolution Software Services (SAP Reseller and Implementer) Why SAP Solution ■ Required integrated, consistent application platform ■ Needed an application that could grow with the business ■ Wanted vendor that could provide unified, worldwide support Implementation Highlights ■ Australian implementation quickly repeated in UK and US ■ Purpose-built style matrix application eased management by category ■ Multi-lingual invoices suit international business ■ Links with Web site eliminating manual entry of regular orders Key Benefits ■ SAP Business One has enough headroom to grow as Skins™ grows ■ Repeatable implementations smoothed setup of UK and US offices ■ Full access to rich operational data provides better visibility of Skins™’ global supply chain ■ Electronic order processing improves efficiency and eliminates the need for error-prone manual handling Implementation Partner Evolution Software Services Existing Environment Australian business run using MYOB Premier Enterprise accounting system, UK company using Sage and USA company using Intuit Quickbooks Hardware IBM System X Servers and EMC Clariion Fibre SAN storage Database Microsoft SQL Server 2005 Operating System Microsoft SQL Server 2005 Network WAN and Co-Location by Primus Telecom AT A GLANCE With global expansion on the cards and its financial system bulging at the seams, specialised garment manufacturer turns to SAP Business One to stitch up its back end and open new channels. Like many homegrown success stories, Skins™ Compression Garments had started small, with information systems to match. Its range of products includes specially designed gradient compression garments that use the company’s BioAcceleration Technology™ to manage circulation, minimise muscle fatigue and reduce recovery time after intense exercise. The company’s success begat a larger product range, with six primary product lines tailor-made for women, general sport, snow, travel, youth and outdoor activities. Over time, the company found itself experiencing rapid sales growth, a rapidly expanding product inventory and the administrative burden of taking the business overseas. Although Skins™’ business had grown up, its information systems had not. The company’s accounting software, which had been expanded over time to provide a form of inventory tracking as well as financial functions, had grown to encompass a 680MB database and frequently took up to 15 minutes to churn out simple management reports.“With the massive growth path the company was on, particularly with distribution virtually global and expansion with subsidiary companies to the US and UK, we were facing a situation where the previous solution was reaching its absolute maximum capabilities,” said Ron McKellar, Finance Director, Skins™. “We didn’t have the capacity to do many critical queries, and had to use add-on products to get the information we required out of the system. It was a nightmare to get meaningful reports out. And, in terms of the number of SKUs (stock keeping units) we carried, the volume of transactions, and the need to integrate with online sales, there were a range of reasons the package had reached the end of its useful life.” Planning the Move Because the previous platform’s imminent demise was clear early on, Skins™ had enough time to carefully plan its new application platform before the system ran out of steam completely. Evaluation of a number of alternative accounting and enterprise resource planning (ERP) systems led Skins™ to SAP Business One. Positive feedback from existing users, as well as SAP’s established reputation and global support footprint, eventually led Skins™ to select the platform as the basis for its new business application environment. After speaking with various integrators, Skins™ selected SAP Evolution Software Services as its implementation partner. One requirement for Skins™’ new system was the creation of a more efficient way of handling its extensive inventory. This was necessary because while Skins™ only had six main product lines -variations in style, colour and size mean the company is handling more than 3000 individual SKUs. Keeping track of these SKUs was a laborious task, and the sheer number of variations made reporting complex and time-consuming. Skins™ and Evolution eventually identified a suitable option in the form of CitiXsys Technologies, an Evolution partner that was in the process of developing a custom ‘inventory matrix’ application for SAP Business One. Skins™ signed on as an early implementer of the tool, which would allow the company to manage its various inventory lines by category instead of by individual SKU number – significantly improving its ability to track sales, forecasting and other operational information. Planning the move proved to be a complex process, since Skins™ was fundamentally changing both its core systems and many of its processes as well. Gavin Jones, Financial Advisor, Progue worked with Skins™ through six months of planning, designing, refining and redesigning that final, clear action plan to make the shift to SAP Business One. By the time the go-live date came around, the project team had identified a clear process for determining cutover figures for debtor, creditor, orders, general ledger and other accounts. Through teamwork, careful planning and painstaking execution, the migration of data into SAP Business One went smoothly over the first weekend of the new financial year. “By 10am on Monday 2nd of July we went live.” Automating Skins By all accounts, the implementation of SAP Business One has proved to be a major success. Careful planning avoided any unpleasant implementation surprises, and executives quickly came to notice at least one significant change: reports that used to take 15 minutes were being completed in 15 seconds. Those weren’t the only time savings that Skins™ realised. In the past, Skins™ had maintained manual processes for a range of activities, such as entering the orders that large retailers like Rebel Sport sent once a week. Using a purpose-built script, Skins™ found that it could do away with this paperwork entirely, instead funnelling the Electronic Data Interchange (EDI) order information directly into SAP. “SAP Business One gives us a platform we can expand with, not outgrow. It’s actually something we’ll grow into. It gives us power and flexibility in terms of having a very structured and organised database that we can query and manipulate any way we want, as we need.” Mr. Gavin Jones, Financial Advisor, ProgueThis straightforward move saves two Skins™ employees three hours each, every week. Applying the same process to orders from another major customer saved two Skins™ employees an additional two hours each, every week. As an added bonus, the data transfers are absolutely accurate and can contain additional detailed information than that which was being entered by hand. The ability to direct electronic orders straight into SAP Business One is also being extended to online ordering, using Magic Software’s iBOLT integration tools to ensure data translation follows relevant business rules. While it’s a relatively small portion of the company’s business compared with its retail sales, online ordering has previously been handled by manually transposing orders after they’re entered online. Straight-through processing of online orders will be essential in helping Skins™ establish its presence in overseas markets. “Every minute you can save in people’s time certainly makes a big difference,” McKellar said. “It’s a huge improvement and creates additional time for staff to utilise other activities.” With a standard and globally accepted business platform in place, Skins™ is now able to build more effective supply chains with partners all around the globe. The company already has distributors in Dubai, Switzerland, Japan, and New Zealand, and SAP Business One’s open design means Skins™ is now able to easily bring additional distributors into its electronic supply chain as business needs dictate. Skins™ in the Game Since Skins™ fully switched over to SAP Business One, the business has been operating more smoothly and efficiently than ever. Manual data entry is down, order accuracy is up, and Skins™’ executives can focus their efforts on deftly handling the company’s critical overseas expansion. That expansion has been matched by subsequent implementations of SAP Business One by Evolution Software Services in the company’s UK and US subsidiaries. Each of those systems is managed separately from the Australian configuration, but built on the experiences of the Australian company to speed and simplify their implementation. Since those new operations didn’t have a significant amount of legacy data to bring across, those setups were up and running within several weeks. Now that Skins™ is online with a unified business system, Skins™ management is looking at further ways it can enhance their daily work. Plans are afoot to integrate the three operations’ databases to provide a global reporting of Skins™ sales. The coming addition of Scan & Pack inventory management system will offer additional data handling capabilities by helping warehouse staff use product barcodes to confirm the accuracy of packed orders before they leave Skins™’ warehouse. “Every order we get can be imported into SAP, not only verifying that what the customer is ordering is what’s going to be processed, but taking any error away from the process,” said McKellar. “And every order we get imported into SAP is a saving from the manual process, as is every error we can catch during the importing.” Addition of the SAP Business One manufacturing resource planning (MRP) module will further enhance Skins™’ logistical and ordering capabilities, since it imports its products from overseas contract manufacturers. Using MRP capabilities supported by the consistent information in the SAP environment, Skins™ will be able to manage its inventory flow with even more accuracy and efficiency. Forecasting accuracy will be improved by utilising rich historical data: “the more history you’ve got, the more accurate the projection becomes,” McKellar said. As the infrastructure becomes better established in the long term, Skins will work with its’ customers and suppliers to encourage them to adopt similar systems that integrate EDI technologies. Increasing automation of Skins™’ supply chain will provide additional efficiencies, ensuring that the company has a world-class operational infrastructure and supply chain to match its world-class products. “Our investment in a new business system has been a significant one,” said McKellar. “But it’s one that is instrumental for our future growth.”www.sap.com/contactsap 2007/09 Company’s registration no.: 198902722M © 2007 by SAP AG. All rights reserved. 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