Industrial electrical and automation leader sets the stage for half-billion dollar revenue target
Faced with a half-billion dollar revenue milestone, NHP Electrical Engineering Products wanted an integrated system that would transform its business with a centralised data source. With Microsoft Dynamics AX, NHP is now better positioned to meet its target, having successfully streamlined its business processes, increased reliability and accuracies, enhanced management visibility and improved business agility.
With over 45 years of electrical and engineering industry experience, NHP Electrical Engineering Product Pty Ltd (NHP) specialises in motor control, power distribution and automation systems. With a mission to provide “what you need, when, where and how you want it”, the privately-owned NHP leads the market with its strong customer focus and wide product range of more than 70,000 line items across 16 market categories. NHP employs more than 950 staff in its 25 branches and 24 regional locations across Australia and New Zealand.
NHP’s decade of double-digit growth got a significant boost when it became authorised distributors for Rockwell Automation in 2007. The expansion spotlighted the age and inadequacy of its existing business systems, spearheading the need for a centralised data source instead of silos of information from disparate systems. “To hit our revenue target of $500 million in the next few years, an integrated system is key to help us streamline processes and enhance business agility to achieve sustainable, profitable growth,” said Mr Vic Wotherspoon, General Manager – Information Technology, NHP.
At the core of its IT transformation is the migration from its character-based, green-screened Enterprise Resource Planning (ERP) system to a modern system. “We needed an integrated ERP platform with the functionality and scalability to support our business growth. Besides being reasonably priced, it should be a familiar, commonly supported platform with a critical mass of market adoption and availability of technical expertise,” said Mr Wotherspoon.
After an extensive assessment and proof-of-concept exercise, NHP selected Microsoft Dynamics AX. ”We were convinced of Microsoft Dynamics AX’s ability to scale and accommodate more customers, products and transactions as our business grows. Already heavily invested in Microsoft technology, the decision aligned with our five-year plan to standardise on an integrated Microsoft stack,” said Mr Wotherspoon.
With the help of Scalable Data Systems Pty Ltd (Scalable), a Microsoft Gold Certified Partner for ERP, NHP implemented Microsoft Dynamics AX, in addition to Microsoft Active Directory, Microsoft Outlook, Microsoft Office, Microsoft SharePoint and Microsoft Lync. The two-phased implementation went ‘live’ at its New Zealand branches, and Australian headquarters and branches, in October 2011 and October 2012 respectively.
Pleased with the Scalable team, Mr Wotherspoon commended them by saying, “Scalable displayed strong pre-sales expertise in matching Microsoft Dynamics AX to our business needs. Its distinguished membership in the AXPact world alliance, backed by the use of the Microsoft Sure Step methodology, ensured success in our cross-country, two-phased implementation.”
Integrating its back-end processes with Microsoft Dynamics AX, NHP has gained efficiencies across key business processes. It has also streamlined its manufacturing design and stocktake processes across its extensive product range of both standard and customised solutions. Management visibility has also increased, with real-time insights into critical business data powering faster decisions and business agility.
Enhanced efficiencies, visibility and reliability with an integrated system
Handling up to 15,000 orders monthly, the biggest benefit NHP has seen is the enhanced efficiencies with the integration of its quotation and ordering processes. Quotations are now automatically converted to sales orders, with system-generated emails sent to respective NHP sales representatives. With real-time access to production lead time and delivery schedules, this allows the mobile sales reps to efficiently manage their customer orders and enhance customer service levels.
Microsoft Dynamics AX has integrated all of NHP’s manufacturing design processes – from static, configurable and custom manufactured – into one system. Production scheduling using easy-to-use dashboards has also maximised workshop utilisation, while reducing the number of schedulers required. Invoice processing is now faster with system-based three-way matching between supplier’s invoice, purchase order price and delivered quantity. This saves time while enabling invoices to be processed accurately without further approvals.
“We have gained tremendous process improvements with Microsoft Dynamics AX. Besides better tracking of win/loss ratio for quotes, order entry efficiencies have increased by seven percent. Manufacturing design processes are now 33 percent quicker, with enhanced visibility and reliability. Production scheduling is also 25 percent more efficient – both in speed and accuracy,” said Mr Wotherspoon.
Valuable partnering for review of business processes to maximise investment
Mr Wotherspoon also credits NHP’s efficiency gains to Scalable’s subject matter expertise, which empowered a thorough review to improve and standardise its business processes; backed by expert development skills and dedicated support personnel that ensured implementation success. According to Mr Wotherspoon, Scalable played a highly-valued role for the Microsoft Dynamics AX initiatives that NHP was considering. The team also ensured seamless integration of Microsoft Dynamics AX with other third-party systems within NHP.
Cut up to five days in month-end processes with streamlined stocktake and reconciliation
With stocktakes for all warehouses managed from one location, less staff are now required for a smoother and faster process. On the finance side, integrating the sub and general ledgers enables stocks to self-reconcile, which eliminates the manual processing of journals for stock entries. “For the first time, we finished three stock counts in one day – no mean feat considering our stock value of $60 million across more than 70,000 items and 16 market categories. With stock self-reconciliation, our finance team is particularly pleased with the reduction of up to five days from our month-end process,” said Mr Wotherspoon.
Enhanced management visibility with ad-hoc reporting cut by more than 90 percent
Microsoft Dynamics AX’s user-friendly drill-down capabilities have enabled NHP management to ‘self-service’ their queries. “Month-end financial reconciliation now takes a fraction of the time, while ad-hoc reporting, when needed, has been dramatically cut from eight hours to 30 minutes,” beamed Mr Wotherspoon. The ability to see real-time business and customer information – all on one screen — has significantly enhanced management insights into key business metrics such as actual sales versus budgeted etc., and empowered faster decisions.
Powering two-million dollar days, new e-business initiatives, and more
According to Mr Wotherspoon, Microsoft Dynamics AX has won the vote of confidence almost from day one – after coping easily with several “two-million-dollar days” right after the system went “live”. He said, “Priding ourselves as early adopters of technology, we are constantly looking at new ways to augment our value-add. Having established a strong backbone with Microsoft Dynamics AX and Scalable Data Systems, we are looking at building an enterprise customer portal to better serve our customers, while going full-steam ahead with our e-business initiatives of having an online store and enabling Electronic Data Interchange for customers by 2014.”