Taking your company out to your market

Huge improvements in customer service, business growth of 2% and substantial efficiency gains and cost cutting across sales admin and production: those are top line results for generator manufacturer FG Wilson's e-business initiative aimed at extending complex product configuration right out into the firm's dealer network. Based near Belfast, the firm is the world's third largest industrial generator manufacturer, producing around 40,000 sets per year. This is make-to-order heavy manufacturing, with 75 product models and 128 customisable options for each, plus hundreds more factory-configured add-ons, and covering power from 8kW at around £3,000, to 6MW at up to £1.2 million. Back in 1996, the company went for an SAP R/3 ERP system across financials, purchasing, stock, sales, distribution and manufacturing, building controls for its eight assembly lines on SAP's rules-based Variant Configurator. It was a big programme: starting with the smaller generators assembly line, and working up through the ranges over four years to 2000. Indeed, FG Wilson's e-business director Ted Jensen says the firm was instrumental in developing SAP's configurator. Late in 2001, the firm turned its attention to its immediate customers – and that's around 200 distributors, some very large, others small, in 180 countries. The issues were protracted sales order time scales and product configuration errors from dealers. Distribution problem Dealers would get quotes and place orders using faxes, phone and post but, because of the sheer product variety and their own remoteness and irregular ordering, turning them round and getting them right could take two to three weeks. Classic problems were orders for invalid combinations at incorrect prices: and that could also percolate onto the shopfloor. FG Wilson decided it needed to develop its distributors to deal directly with sales and product configuration by effectively becoming part of the company. It wanted a web-based system that would automatically reflect pricing and the product configurator, so that errors would be eliminated, while order confirmation and delivery dates would be generated immediately. In January 2002, with the help of Deloitte Consulting, the firm conceived 'Gensets Online', designed to provide an automated, fast build-to-order system for its dealers to access via browsers and a 56k connection. Says Jensen: "Since we had SAP already, we looked at the mySAP e-business suite and found it was a good fit, integrating into the back office system and our configurator." In fact, the firm went for SAP's CRM suite and its Internet Pricing and Configuration (IPC) module, also updating its internal SAP Variant Configurator. That part of the system holds all production master data and squirts out appropriate BoMs and routings according to the generator set configured. Jensen says: "Now, the IPC the dealers see uses a copy of the production Variant Configurator database at the level above the BoMs and routings, with pricing and configuration changes automatically pushed to it so it's always up to date." The final part of this equation was making the system easy to use for the distributors, and he says that involved re-working SAP's IPC front end "to clean it up and make it much simpler to use without in-depth training". The system went live in April 2003 – and revolutionised order processing, cutting the former two or three weeks to minutes of error-free self-service, available 24 x 7. Says Jensen: "Now, the dealers simply click on the options they want and, as they do, other options are automatically ticked and others shaded out. Then, within five minutes they get order confirmation, and an hour or so later, the delivery date." How does he quantify the return on what was a £1 million-plus investment? "It's difficult, but with 30% of our ordering now over the Internet and 60% more of the internal order entry using the same system, we're all providing better customer service and we're looking at growth from that of around 1.5 to 2%." That will be sustained by ongoing rollout of the whole system to dealers around the world, due for completion by the end of the year. Key benefits

Conservative estimate of 35% ROI

Additional business growth of up to 2%

Substantial efficiency gains

Cost cutting across sales and production by stripping out time, errors and re-work

Internal order entry efficiency up 400%

Massive improvements in customer service

Initially running 30% of external orders and 60% of internal order entry