Impact of Formula-Based ERP Applications on Chemical Manufacturers

Executive Summary
Whether youre in the process of re-evaluating your existing ERP solution or looking to replace your spreadsheets, its important to focus your search on applications with strong capabilities to support your unique requirements, so you dont have the change the way your business operates. This practical guide links the unique business processes of the chemical industry to specific software capabilities available in formula based ERP solutions. Case study references provide insight into the capabilities needed to manage by-products and co-products, variability of ingredients, and finished products and processes. It also address how the right ERP solution can significantly improve product costing, production predictability, and scalability, as well as compliance issues related to traceability and MSDS. Whether your process includes distillation, refinement, recovery, or production, this ERP essentials guide will help you choose a solution that is right for your needs. A checklist of specific capabilities is also included for use during the evaluation process.

Introduction

Todays chemical industry is faced with a multitude of challenges, including rising costs of raw materials and energy, price and margin pressure, global competition, product innovation and differentiation, and increasing risk and regulation. Whats more, chemical companies must be nimble enough to take advantage of opportunities in the global marketplace, while being able to address changing customer dynamics and manage the intricacies of a tight economy. An ERP solution for the chemical industry needs to address its unique manufacturing and financial businesses processes, including manufacturing formulation, costing and quality control, materials and production planning, maintenance management, accounting, budgeting, planning, and forecasting. With the right solution in place, chemical companies can sustain or increase customer satisfaction; improve profitability; ensure high quality, consistency and efficiency; and overcome the limitations of slow, error-prone manufacturing processes.

Getting Started

Most ERP solutions support the needs of accounting and financial functions, but when it comes to purchasing, inventory, manufacturing and sales, they dont always meet the needs of a chemical manufacturer. Why? Most standard ERP solutions were designed for discrete manufacturing (typically physical products that go directly to businesses or consumers, or are used as assemblies in other products) instead of process manufacturing (using a formula using ingredients to create a bulk output). If you are investing in an ERP solution, youll want to choose an application with best practices for your industry built into the solution, without adding extra cost and implementation effort. This practical guide examines several key areas of process manufacturing in terms of key ERP functional capabilities, data model characteristics, and enabling technologies, specifically: The inventory, accountability, and management of common ingredients The ability to predict yields, scale production, and accurately cost products The effect of variable product characteristics and inventory attributes, such as package weights, expiration dates, and multiple units of measure, on inventory management, order management, production scheduling, manufacturing, QC management and product costing The impact of the ERP architecture and design on the applications functionality and maintenance The ability to track and trace all products as well as packaging materials At the end of this document, a summary of these critical areas is provided as a functional questionnaire to be used during your software vendors product demonstrations. As you select the right fit solution for your company, you should also consider a software providers industry experience, expertise, and support. This is an important consideration that will impact your ERP implementation, and it is as important as the product architecture and capabilities.

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Manage Variability

Variability impacts the consistency and quality of finished products. A good indication that an ERP application is capable of managing product variability is that it supports an unlimited number of product characteristics for both raw material and finished products. It should support user-definable characteristics as well as industry standard characteristics, such as pH, potency, moisture content, and expiration date. Formulation and process control are the primary concerns in chemical manufacturing operations, where variability creates significant challenges for process specifications. Raw materials are purchased and finished goods are produced in a variety of quantities, potencies, and qualities. The ERP application must be able to identify these variabilitys, in addition to the fluctuating cost of both raw materials and packaging materials, in order to adjust production jobs. Managing variability starts with a purchase order for raw material with specific product characteristics. At the time of receipt, these raw materials are inspected and validated against a set of tolerances. Once received, lot numbers can be assigned to raw material inventory so that it can be tracked throughout the manufacturing process. Chemical manufacturers are often required to deliver finished products to customers that meet certain requirements. A raw material might meet one process specification, but it might not meet another. An ERP solution can provide full visibility into available raw materials inventory and their product characteristics, so that manufacturers can deliver products that meet customer requirements. An ERP application based on formulas can be used to manage all raw materials, packaging materials, and multiple finished goods, while delivering a high level of predictability and repeatability. This formula should define the manufacturing, yield, quality, routing and costing processes. Variable product characteristics, such as potency grade, pH, or moisture content, determine the ingredient proportions and equipment settings in certain process stages. To manage this variability during production, the ERP application should allow manufacturers to make adjustments to the base formula specifications in terms of ingredient proportions and equipment settings, without affecting the definition of the original base specifications. Variations of a formula specification can also account for differences between plants, shifts, production lines and equipment, as well as customer requirements, such as private label products.

Improve Predictability of Scaled Production

Formula specifications are designed to produce one or more finished products in bulk quantities. A batch run is expected to produce a quantity of finished products within a given range in a certain time period. For example, a chemical reaction within 10 liters of a solution takes the same time as 50 liters of the same solution in the same vessel. When batch runs are scaled up or down, the batch quantity ranges and the production times follow a step function rather than a linear function. When a chemical manufacturer scales production, the ERP application should be able to predict finished product yields, and deliver consistent results, in terms of quantity and quality.

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Deliver Accurate Product Costing

Accounting for all material and operational costs in the manufacturing process is one of the biggest challenges facing many manufacturers. Without accurate and up-to-date cost information, they cannot make informed decisions on key business issues, such as new product pricing strategies. A manufacturer needs to be able to link finished products to customer volume discounts, promotional rebates and incentives, in addition to the cost of raw materials, to determine profitability. An ERP application should be able to capture, assign and compare actual and standard costs for all finished products. Waste products typically have the cost of disposal charged back to the primary product. Unexpected off-spec products can be considered as waste or stored and held in quality control status, then sold for a given market value. By-products are typically assigned a straight cost, but in situations where the by-products, such as reclaimed solvents, are available for sales, their revenue can be credited back to the primary product. Co-products are typically assigned a cost, based on some percentage in the job or a specific product characteristic such as quality, weight, potency, or market value. By capturing actual versus standard costs for co-products and by-products, chemical manufacturers are able to optimize their manufacturing processes.

Flexible Specifications Support Multiple Processes

For discrete manufacturers, assembly and packaging are the standard processes that are executed in an ERP application based upon a multi-level bill of materials and routing instructions. Its much more complicated in the chemical industry, when different products are being processed to meet different customer specifications. For example, a cleaning agent might be produced in barrels for one customer or packaged in plastic bottles for another. Or the end product might include an added scent for one customer and without for another. In addition, there may be continuous flow processes linked to batch processes that need to be managed and kept in synch. The ERP application should be able to employ formula specifications to manage processing and packaging. By linking production and packaging specifications, but maintaining them separately, chemical manufacturers are able to: Produce different finished products that are similarly packaged Produce product for future private labeling Produce and track intermediates (such as a cleaning agent packaged in a barrel that will be dispensed into smaller containers after color and scent is added) Flexible formulas allow chemical manufacturers to model their processes in a series of controllable and repeatable process stages.

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Example
Summit Industrial Products, a synthetic lubricant manufacturer and member of the Kluber Group, offers private labeling to its customers. Gear lubricants, hydraulic fluids and compressor lubricants are blended and stored in large volumes in tanks. The fluids are packed out based on color of container, size of container, and label on the container. We can have an infinite number of private labels associated with core part code. For instance, SH-46 is our lead compressor lubricant product. I may have 200 private labels associated with that. The core formula is still the same, but it gives me the ability to name it something unique in the system, to track it that way, to give it a unique color of pail, unique unit of measure - and other unique requirements that the customer requires. Some customers may have three or four different private labels on the same product.
Kelly Starr EVP - Finance and Administration, Summit Industrial Products

Manage Multiple Units of Measure

Multiple units of measure are used in many chemical business processes: goods may be purchased in one unit of measure, stocked in inventory in another, issued in finished goods in one more, then sold in another. The ERP application should allow process managers to manage inventory in terms of bulk units or measure (gallons or pounds), packaging units (pails or large drums) and random attributed (variable weights and potencies) at the same time. Inventory can be costed by potency units, solid percentage, or any other unit. Product variability plays a role in unit of measure conversions. Process-oriented ERP applications typically support user-defined and automatic UOM conversions (liquids to solids, gases to liquids) that are initiated within the manufacturing process, as well as from specific changes in inventory attributes. From purchasing through inventory, order management through shipping, the ability to work with multiple UOMs improves both performance and customer service.

Example
SI Group (formerly Schenectady International, Inc.), a privately-held, global chemical company, discovered a significant difference in the number of data model tables when moving from a leading ERP software application to an industry-specific ERP application. Our first ERP solution had approximately 12,000 database tables that were difficult to decipher, whereas our current ERP solution has approximately 2,500 tables that have intuitive names. Through simplification and focus, SI now has a robust, functional system that has greatly streamlined global deployment and maintenance of the ERP system.
Allen Look, Director of Global Information Technology, SI Group

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Manage Inventory Efficiently Thru Expiration Date Tracking

Managing expiration dates can be an on-going challenge for chemical manufacturers, as some substances may lose their effectiveness after a certain period of time. An ERP solution can help improve inventory management by offering better shelf-life control. It should offer basic inventory rotation methods (e.g.first in, first out (FIFO), last in, first out (LIFO), and first expiration/first out (FEFO)) when selecting ingredients for production based on the supplier or packer production dates. These selection criteria can also be carried forward when selecting product to ship to customers, based upon order requirements. By ensuring that the best rotation methods and quality standards are followed during the order fulfillment process, process-oriented ERP applications can significantly reduce customer charge-backs, prevent transactions for expired lots, and notify users when inventory is getting close to expiration. The result is improved product quality, greater customer satisfaction, and less waste from expired inventory.

Deliver Higher Quality Goods

When it comes to making quality decisions in process manufacturing, a higher degree of variability often results in a range of acceptability. An ERP application can help manufacturers to track the quality conditions of raw materials and finished goods and make better decisions about product quality. Greater variability requires more robust quality management capabilities, as well as lot management capabilities. The ERP applications should support the definition of quality checks of raw materials and finished goods in the formula specification to ensure that they are executed in proper sequence in a certain process stage. By collecting and analyzing quality data, a manufacturer can identify problems with raw materials, finished goods, and equipment. To reduce quality issues tied to production startup losses, manufacturing processes, and scrap and rework activities, manufacturers need real-time visibility into overall plant performance, including product quality and equipment performance trends. By collecting relevant real-time data from plant operators and existing automation, real-time performance management measures rates, yields, utilization, overall equipment effectiveness, and per-unit cost data. When this real-time performance data is evaluated, performance issues can quickly be identified so that repetitive problems can be eliminated and issues can be resolved.

Expedite Track and Trace

Traceability is a crucial ERP function that is responsible for tracing and tracking the lineage of all raw materials and finished products, based on their characteristics and lot numbers. Due to the batch run quantities produced in process manufacturing, the ERP application should be able to trace and track an ingredient even if it is only present in miniscule amounts. For example, if a volatile organic compound (VOC) is included in the finished product, it must be tracked in compliance with government regulations, as well as to facilitate recalls if an issue results. An example includes certain chemicals in fertilizers that are explosive or highly flammable.

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The ERP application should be optimized for full lot traceability from raw materials through production, tracking finished goods from supplier invoice to customer invoice, and identifying the raw materials and resources that produced the finished products. As customers and regulatory agencies require process manufacturers to deliver 100% accurate lot traceability within a short period of time, bi-directional lot tracing allows manufacturers to respond to product recalls in minutes, rather than days. An ERP application simplifies the procedures necessary to demonstrate compliance to customers and regulators. Thorough records of quality management and lot maintenance should be easily accessible, as well as an audit trail of changes that occur during the process.

Minimize System Configuration

Look for an ERP application that includes predefined labels reflecting standard terminology in the chemical industry, extending from label naming conventions to database table and field naming conventions. Chemical manufacturers should expect to see formulas, ingredients, co-products and by-product naming conventions reflected in the labels used in screen transactions and reports. These predefined labels can reduce the initial system configuration and ongoing maintenance costs, as well as reduce the risks involved in performing the activities. Field level definition is commonly overlooked when investigating an ERP application. For example, tracking a very miniscule or trace amount of an ingredient in a finished product requires certain data fields to be defined with the right number of decimals, such as specific gravity or MSDS on file.

Summary

If youre a chemical manufacturer searching for the right ERP application or are in the process of re-evaluating your current ERP application, you should focus on applications with a strong process manufacturing foundation that easily manages the unique requirements of your industry. By investigating available ERP applications, you will discover that a formula-based ERP application can successfully manage the variability of products and processes, accurately account for all raw material and finished products, and significantly improve product costing, production predictability, and scalability far better than a generic or discrete-oriented application. Designed with the right baseline functional capabilities, data model structures and enabling technologies, a formula-based ERP application can support your business requirements with minimal customization and consulting services. A focused solution will conform to your business rather than requiring you to change your business to use it, while reducing operating costs and improving customer service levels.

ERP Checklist for the Chemical Industry

Improving production through formula management

To help you evaluate and select the ERP application that is right for your business, use this checklist to create your own side-by-side comparison of ERP applications.

When stages within a formula are linked together, can the output of one stage become the input for the next stage, without having to perform an intermediate inventory transaction or define an unnecessary intermediate product?

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 How does the system handle conversion, where the actual output is converted from the planned/ scheduled output? Can yield be measured by operation and across the process? Does the system support different units of measure throughout the process specification (e.g., variable weights, units, pounds, cases, barrels)? Does the system support input-driven (for supply) as well as output-driven (for demand) process specifications? Managing the variable characteristics of products Can the system update actual product characteristics based upon QC values recorded during manufacturing? Can the system accept or modify formulas based on actual values, such as moisture content or potency? Reducing customer chargebacks and inventory write-offs with expiration date management Can distribution days (minimum days of shelf life that must remain when product is shipped) be defined separately from standard shelf life? Can the system net the quantity of product reaching expiration from available quantity if demand does not consume all available inventory of that lot/batch by its expiration date? Improving product costing Can actual costs be tracked and compared to standard or estimate cost? Do you have options for standard cost, weighted average cost or actual cost by lot? How are costs for co-products and by-products handled? Can the estimated cost of a process specification be compared with the actual cost of a job/batch? Can future costs be used to provide what-if comparisons of total cost? Can costs be date driven? Managing multiple units of measure simultaneously Does the system support different units of measure for receiving, producing, storing, and selling the same item? Can the system support catch weights with verification to minimum and maximum catch weight? Can the system support net weight or standard weight products (and track give-away)? Meeting regulatory compliance Does the system provide adequate record keeping to meet FDA and customer requirements? Can product characteristics be used to force or limit the selection of specific lots/batches based on matching the actual characteristic values to a specific customer request? Does the solution have eSignature capabilities? Does it support necessary validation? Is ePedigree supported?

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Accelerating product recalls through lot traceability Does the system maintain full forward and backward lot/batch integrity when product is converted during manufacturing, without losing any audit or trace linkages? Are lots tracked at every step in the process (from receiving to manufacturing to shipping), capturingmmaterials, production resources, people, processes, steps, and time? Is the traceability program capable of handling recalls and mock recalls in minutes instead of hours?

To learn more about how CDC Software can meet your companys unique challenges, contact us.
CDC Software | The Customer-Driven Company www.cdcsoftware.com
+ 1 770.351.9600 | info@cdcsoftware.com CDC Software I 2002 Summit Boulevard, Suite 700 I Atlanta, GA 30319 I USA Copyright CDC Software 2011. All rights reserved. The CDC Software logo is a registered trademark of CDC Software.

Order Number: CDC_ERP_FSWP_Essentials_Chemicals_US

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SI Group, Inc.
C a s e s t u d y

Customer Details
SI Group, Inc. www.siigroup.com

sI Group Reinforces Global Leadership Position

SI Group, Inc., a privately-held, global chemical company, produces a wide range of products, including coating resins, adhesive resins, electronic and specialty chemicals and imaging products. Each of the companys four operating divisions chemical, electronic specialty chemicals, performance resins and specialty coating supplies diverse products to global markets and shares a company-wide commitment to provide technologically superior, high-quality products to customers worldwide. After nearly 100 years in business, Schenectady has 25 manufacturing plants in 14 countries. Schenectadys proven legacy and strength in the chemical business enables them to produce and deliver quality products and services that exceed customer needs while ensuring the health and safety of employees and the environment.. lacking both focus and functionality. The increase in complexity and cost had exceeded the value that was being derived from the investment. Schenectady sought a new business solution that was focused, easy to use and allowed the company to fully utilize an enterprise business solution to clearly differentiate Schenectady from its competition.

Industry
Chemicals

Challenges
Lack of integration created challenges in consolidating global information and procurement of raw materials Originally selected generalized, complex ERP system lacking focus and functionality With plans to rollout to 25 operations by 2006, system complexity and cost were important

solution
After conducting a search of more than 50 vendors, Schenectady chose Ross Systems ERP solution. The decision was based on Ross focus on the specific needs of chemical manufacturers as well as the breadth of product solutions, including ERP, supply chain management and customer relationship management. Schenectady has completed implementation of Ross ERP across five sites in England, Germany, Mexico, China and Switzerland and is on target to complete implementation across all 25 operations in 14 countries by June 2006.

Benefits
Worldwide deployment will provide global visibility to view and share information Less complexity - reduction of database tables from 12,000 to 2,500 with Ross ERP Already completed implementations in England, Germany, Mexico, China and Switzerland On target to complete implementations in all 25 operations by June 2006

Challenges
Although Schenectady had successfully grown into an international company with worldwide operations, its existing enterprise systems limited their ability to consolidate global information. System complexity, cost and the availability of information restricted their ability to be agile in the global marketplace. The lack of company-wide integration also created challenges in the procurement of raw materials. Specifically, with more than 600 different raw materials coming from several thousand suppliers around the globe, the company needed to integrate company-wide materials management, planning, forecasting and logistics capabilities to take advantage of their economies-of-scale. Compounding their issues, Schenectady initially selected a large, generalized enterprise resource planning (ERP) vendor to support its business needs. After a reanalysis of business requirements and strategic direction, Schenectady realized that the generalized software package lacked the specific capabilities required for a chemicals manufacturer. Their systems were complex

Solution
Ross ERP

Results
When fully deployed Ross ERP will provide Schenectady with worldwide visibility to view and share information across the enterprise. For instance, Schenectady will know how many pounds of a raw material are used in a year, company-wide and can subsequently use the information to negotiate prices on large orders upfront, saving time and money in a world of rising chemical prices. In addition, Schenectady has improved production cycles and order processing across the enterprise, including global consolidated financial reporting. With the demand planning capabilities of Ross ERP, Schenectady now tracks outstanding orders and recognizes trends in orders from customers, allowing management to proactively make business decisions based on advanced knowledge. Ross ERP gives us the tools we need to more effectively and efficiently manage our

Ross Enterprise | Case Study

business, said Allen Look, Schenectadys director of global information technology. Top management in our corporate headquarters can access information across the enterprise in real time. Global consolidated reporting puts critical company and financial information in the hands of our decision-makers immediately, allowing them to focus on making the business decisions to help our organization be successful. Designed specifically for chemical manufacturers, Ross ERP

When we chose our original ERP system, we thought we needed a large solution from a large vendor to support our anticipated growth as an international company, said Look. After conducting an analysis of our global business systems and requirements, we realized that the larger, more generalized solution stifled our business growth potential by creating unnecessary obstacles and technological roadblocks. Since moving to Ross Ross ERP solution, weve greatly improved the speed of processing through increased simplicity and focus. With the quality management applications and bi-directional lot trace capabilities in Ross ERP, Schenectady has eliminated its third-party quality control systems globally, saving more than $300,000 annually. Additionally, the lot-trace-track functionality has increased Schenectadys ability to monitor the quality of its products, while greatly reducing the time spent looking through archives of paper records to collect and collate similar information.

The chemical-specific functionality within Ross ERP enables Schenectady to become a more streamlined, efficient company. Ross demonstrated an expertise in the chemical industry and has supported us every step of the way. With the Ross ERP solution Schenectady can effectively deploy a common ERP system across the globe.
Allen Look Director of Global Information Technology

has greatly streamlined operations. For instance, with Ross ERP, Schenectady has reduced the number of database tables from 12,000 to 2,500. Through simplification and focus, Schenectady now has a robust, functional system which has greatly streamlined the deployment and maintenance of its Enterprise Systems.

about Ross enterprise

Ross Enterprise is an innovative suite of software solutions that help manufacturers worldwide fulfill their business growth objectives through increased operational efficiencies, improved profitability, strengthened customer relationships and streamlined regulatory compliance. Ross Enterprise offers industry-specific functionality for a variety of industries including food and beverage, chemicals, life sciences, metals, natural products, and business services. The comprehensive suite of solutions include functionality in enterprise resource management (ERP), supply chain management (SCM), customer relationship management, real time performance management, order management and warehouse management (WMS), human resource planning, performance management and business analytics. For more information, visit www.rossinc.com.

about CdC software

CDC Software, The Customer-Driven Company, is a provider of enterprise software applications designed to help organizations deliver a superior customer experience while increasing efficiencies and profitability. CDC Softwares product suite includes: CDC Factory, Ross ERP (enterprise resource planning) and SCM (supply chain management), IMI warehouse management and order management, Pivotal CRM and Saratoga CRM (customer relationship management), Respond (customer complaint and feedback management), c360 CRM add-on products, industry solutions and development tools for the Microsoft Dynamics CRM platform, Platinum HRM (human resources) and business analytics solutions. These industry-specific solutions are used by more than 6,000 customers worldwide within the manufacturing, financial services, health care, home building, real estate, and wholesale and retail distribution industries. The company completes its offerings with a full continuum of services that span the life cycle of technology and software applications, including implementation, project consulting, outsourced business services, application management and offshore development. CDC Software is the enterprise software unit of CDC Corporation (NASDAQ: CHINA) and is ranked number 18 on the Manufacturing Business Technology 2006 Global 100 List of Enterprise and Supply Chain Management Application vendors. For more information, please visit www.cdcsoftware.com.

Innovative software solutions for manufacturers worldwide

CDC Software I Atlanta, GA I USA I www.rossinc.com I +1.770.351.9600
Copyright CDC Software 2009. All rights reserved. The CDC Software logo and CDC Ross Enterprise logo are registered trademarks and/or trademarks of CDC Software.

The Hammond Group

C a s e s t u d y

Customer Details
The Hammond Group www.halox.com

the Hammond Group slashes It Costs While Getting Closer to Its Customers
Background
Founded in 1930 in Hammond, Indiana, the Hammond Group produces a wide range of lead chemicals, lead and non-lead glass frits, battery additives, plastic additives, and paint additives. Hammonds HALOX division is a maker of raw materials for the painting and coating industry. The division was established in 1972 to meet regulatory, industry and customer demand for lead and chromate-free nontoxic inhibitors for corrosion-resistant and tanninstain-resistant coatings. Poor Sales Visibility Hammond often works with large customers that have multiple divisions spanning dozens of locations around the world. That means that its customers may have various Hammond sales executives and customer service reps assigned to them. However, without centralized customer data, Hammond personnel had no easy way to view all sales and accounts receivable information for a particular customer. Moreover, customer service had little visibility into the status of orders, regardless of the Hammond division handling the order. And management had no easy way to piece together customer activity, sales activity by a customers region or division, and product line volume and margin by customer. We needed to get closer to our customers, said Rex. But we couldnt accomplish this critical corporate-wide imperative with limited visibility into our customers needs. We needed fast access to practical business intelligence to make better decisions and provide a higher level of service, which in turn would lead to improved business performance.

Challenges
Oracle ERP too costly to maintain and not a good business fit Reps spent valuable time researching customer questions due to disintegrated systems Customer Service lacked visibility into order status Needed to get closer to the customer to continue to stay ahead in commodity business

Solution
Ross ERP Pivotal CRM Ross EPM Sales Ross EPM Finance Ross Customer Portal Ross Data Collection

Challenges
Incumbent ERP System Prevents Needed Visibility In 2006, Hammond began looking for alternate options to its Oracle ERP system, which it had been running since 1999. We simply werent getting an acceptable return for our investment, said Ray Rex, President of Hammonds HALOX division. Oracle had become too costly to maintain, and over time, we also began to recognize that it wasnt a good fit for our businessmainly because it prevented the degree of visibility we require to compete and succeed in our highly competitive industry. A Need to Get Closer to Customers As a chemicals company working in a commoditydriven business, customer relationships and superior service are paramount to Hammonds success. Yet customer information was spread throughout plants and offices, preventing Hammond from consistently delivering the kind of personal attention and service needed to ensure high customer loyalty. For instance, customer service reps and field sales personnel had no efficient way to obtain order status or sales history. Customer service reps couldnt give out an immediate answer every time a customer called with a question, explained Rex. Too often, the rep would have to hang up, spend valuable time searching through multiple data sources and call the customer back hours later. "Our vision was to ensure that every employee had all the necessary information to immediately address a customers needs without involving other personnel. This creates a real win-win situation the customers needs are met without disruption to other aspects of our day-to-day operations."

Results
39% savings in IT costs Improved service levels through real-time access to data Improved opportunities to cross-sell to large multi-divisional customers Better management decision making through better sales data

solution
Intent on turning its vision into reality, Hammond set out to find viable options. The search led the company to CDC Software. According to Gerry Kaoukis, Hammonds IT Director, he and his team were immediately attracted to CDCs Ross ERP solution because it clearly offered a richer set of industry-specific functionality at a much lower total cost of ownership than did Hammonds current system. Moreover, CDCs Pivotal CRM solution and Ross EPM (enterprise performance management) Sales application seemed to be tightly aligned with Hammonds strategic vision. We saw how Ross ERP would provide us with the foundational backbone to further our culture of excellent customer service, explained Kaoukis. Just as important, we also recognized how this tightly integrated set of applications would provide us with a low-cost solution and strong business fit. In the summer of 2006, Hammond replaced Oracle ERP with Ross ERP. The company set an aggressive goal to go live on the system by August 1, a target it met. Later that year, Hammond deployed Pivotal CRM on time and under budget. EPM was rolled out in April 2007 followed by Customer Portal in October 2007.

Ross Enterprise | Case Study

Results
39 Percent Savings in IT Costs According to Kaoukis, Hammonds switch to Ross ERP yielded an immediate 39 percent savings in Hammonds first-year IT costs, mainly as a result of lower software and hardware maintenance costs. We had already projected these savings as a result of the switch, explained Kaoukis, But it was still good to see that these cost savings did materialize once we deployed Ross. And, overall, after just one year of using CDC Softwares applications, we are already well ahead of where we were with Oracle ERP.

Analyze Sales and Margins From Every Angle Rex added that EPM Sales has also improved Hammonds ability to make better decisions. The management team can now better determine what products are performing best in various global markets, analyze sales of the latest products by region or country, break down profit margins by product groupeven analyze customers by profitability, volume and geography. Furthermore, they can rank distributors based on profit margin, where before they could only rank them by total sales. This kind of actionable intelligence enables Hammond to better determine where to place resources and what products it needs to sell. EPM Sales is like a spreadsheet on steroids, explained Kaoukis. With a few clicks, I can now access virtually any sales-related information and slice and dice it however I choose. Turn Financial Data Into Meaningful Information Based on its first-year results and its experience with CDC Software, Hammond recently decided to deploy Ross EPM Finance, hoping to turn more of its financial data into meaningful information. EPM Finance is providing us with a business dashboard that any financial analyst would appreciate, commented Rex. Empowering the Customer Ross has provided the customer with access to their data in Hammonds ERP system. Customers can view pending orders, recent shipments, invoices and payables as well as BOLs and COAs. This especially popular and empowering to the international customers that cannot be immediately served by Hammonds customer service due to time zone differences. Additionally, it has relieved some workload on Customer Service as empowered customers now answer their own inquiries. Fast and Reliable Data Collections A new bar code data collection system, scheduled to go-live December 1, 2007, will provide enormous benefits to the Halox manufacturing facility. Along with the CDC Data Collection software solution, portable scanners will be used to capture real-time and accurate data at shipping, receiving, and production. With improved efficiency, operating cost will be lower, mistakes will be minimized, and inventory control will be much easier and faster. When asked to summarize Hammonds overall view of CDC Software, Rex replied, Based on our experience, I wouldnt recommend any other software company to another process manufacturer looking for these types of solutions. CDC has enabled us to get much closer to our customers. Thats a critical benefit in our ultra-competitive commodity-driven business.

Based on our experience, I wouldnt recommend any other software company to another process manufacturer looking for these types of solutions. CDC has enabled us to get much closer to our customers. Thats a critical benefit in our ultracompetitive commodity-driven business.
Ray Rex President, Hammonds HALOX Division

Improved Service Levels Pivotal CRM has enabled HALOX to centralize all customer information. This allows users to easily access data for any customer in real time. Customer data can also be searched globally or drilled down further to the division level. Furthermore, because customer information is integrated with Ross ERP and EPM Sales, customer service reps can easily access the information they need to consistently provide superior service. The improvements we have made in service levels are significant, said Rex. Our customers have definitely noticed the difference, which further reinforces our decision to invest in these solutions. Plus, by sticking with one focused solutions provider, we dont have to worry about complex and costly integration projects or having to deal with two or three separate vendors for support, maintenance and services. Spot Unmet Needs and Capitalize on Opportunities Having accounts receivable and sales data integrated across the applications also enables sales teams to further examine customer purchases beyond one reps domain. This allows Hammond to detect purchasing patterns and uncover opportunities that may not have been obvious before. Before, field reps and sales managers had very limited access to customer data, said Kaoukis. Now, they can view sales information across each customers divisions, making them better equipped to spot needs that arent being filled and cross-sell within these large multidivisional companies.

about Ross enterprise

Ross Enterprise is an innovative suite of software solutions that help manufacturers worldwide fulfill their business growth objectives through increased operational efficiencies, improved profitability, strengthened customer relationships and streamlined regulatory compliance. Ross Enterprise offers industry-specific functionality for a variety of industries including food and beverage, chemicals, life sciences, metals, natural products, and business services. The comprehensive suite of solutions include functionality in enterprise resource management (ERP), supply chain management (SCM), customer relationship management, real time performance management, order management and warehouse management (WMS), human resource planning, performance management and business analytics. For more information, visit www.rossinc.com.

Innovative software solutions for manufacturers worldwide

CDC Software I Two Concourse Parkway, Suite 800 I Atlanta, GA 30328 I USA I www.rossinc.com I +1.770.351.9600
Copyright CDC Software 2007. All rights reserved. The CDC Software logo and Ross Enterprise logo are registered trademarks and/or trademarks of CDC Software.