KDM International
Anglia Business Solutions provides KDM International PLC
with a significant competitive advantage using a world-class information
technology solution based on the award winning Navision Financials business
software.
Industry :
Timber Trading
Scenarios :
Business Operations
Since its foundation in 1975, KDM International has achieved an impressive
growth rate in its timber trading division. At its prestige head office,
Kesgrave Hall, Ipswich, the company established the first hi-tech timber
trading room of its kind in the UK in 1995. As a result the organisation
experienced record sales and profits during the following years despite
increased competition in its marketplace.
Company background
In an industry not noted for the advanced use of
technology, KDM is an exception. The organisation's mission statement is to
increase the value of the company by exemplary trading and the use of
technology. In addition to a significant investment in the development of
internal IT systems, the company launched BT Global WoodTrader, a joint
venture between British Telecom and KDM to trade timber over the Internet in
1998.
In addition to timber trading, KDM has two other operating divisions.
Snowgreen imports Christmas trees for distribution to wholesalers, and will
soon supply from new local plantations as well. The Internet Service
division provides access to the Internet and specialised content via
TIMBERWeb, a service aimed at other organisations in the timber industry.
This division also operates COUNTYWeb, a branded service funded from
advertising revenues that provides information on local products and
services within each County region.
The Business Need
KDM was concerned on the build-up of information across
a range of different internal software systems as well as their lack of
integration. The challenge facing the Company was to select a solution that
would incorporate all of their existing bespoke solutions and provide a
platform enabling them to move towards electronic trading in the long term.
The Selection Process
“We looked at a variety of solutions that purported to
offer the combination of Windows based packaged offerings and tailoring
facilities that we needed to meet the demands of the different businesses,”
said Richard Fairbanks KDM’s Financial Director. “Our experiences of
developing our own solutions enabled us to quickly eliminate those products
that failed to meet our requirements for a flexible true Windows based
solution. We were very impressed with the modern design and extensive
features built into the Navision system as standard. These, coupled with the
ability to quickly develop the specialist modules we needed, convinced us
that the system would provide a suitable platform that would meet our
current and future requirements.
We were also encouraged by the approach taken by Anglia Business Solutions.
They spent some time getting to know our business and administrative
processes prior to suggesting a solution. Their consultative method of
working provided the foundation for a jointly developed system design that
precisely matched our needs.”
The Solution
The agreed system design consisted of a combination of standard Navision
functionality and specially written modules designed to meet the specific
needs of the timber trading division. The specialist modules consisted of:
-
A traded sales module that incorporates back-to-back
sales orders and purchase orders containing a schedule of several
shipments and deliveries as well as a built in contract and credit
control authorisation procedure.
-
A stock in transit module that tracks timber
shipments from the mill to the UK port of entry and that includes a bill
of lading indicating sailing details such as vessel, departure, arrival
port and date.
-
A haulage and billing module that provides detailed
delivery instructions to the haulier using haulage orders and that can
be used to generate sales invoices for the relevant goods.
Trade Form (Costs Tab) – Showing Trade Materials and Financial Aspects.
The Implementation Process
The green light to proceed with the project was given in August against a
tight timescale of going live at the beginning of the new KDM financial year
in January. The task included the production of detailed specifications for
all of the special modules, prototyping and testing the bespoke elements,
commissioning and testing the core Navision system and training all of the
users on both the standard and special functionality. A detailed project
plan was produced that defined the responsibilities of all resources
involved. Once the plan was agreed, progress was monitored using a series of
project management meetings.
The main business benefit offered by the Navision solution is total
integration. A whole raft of bespoke applications has been replaced with a
single core system. Also, for the first time KDM are operating a single
system across all three businesses, despite their differing requirements.
Full integration is by no means as simple to achieve as it sounds.
Originally KDM used a traditional accounts package for sales contract
processing and invoicing. All timber sold was processed through the package
against a generic material heading. Quantities were processed in the unit of
purchase, which may be different from KDM's stock unit (cubic metres) and
the unit of sale.
This level of detail was not sufficient for KDM's operations team, who have
to deal with the receipt and shipment of individual packs of timber, the
lowest sales denomination, for which a full specification of the pack
contents (all dimensions and timber markings) is required. Individual packs
can contain many different quantities and lengths of a particular
cross-section of wood. To meet the needs of the operations team, KDM had
built a separate system for tracking the individual packs of timber. Keeping
these two separate systems in step with one another was time consuming and
needed careful monitoring.
This requirement to process inventory in two very different ways is
difficult to cater for in any standard package. The only workable solution
from a business perspective is to raise contracts in generic units, process
inventory in packs and revert to generic units again at the point of
invoice. Anglia recognised this fundamental requirement early on and
designed a two-tier inventory system of materials and packs within Navision
Financials. Sales contracts and invoices can be handled in the top-level
material, whilst actual movements of inventory are processed in packs. The
material type for every pack is known, and packs can be allocated to and
from sales and purchase contracts on the basis of the top-level material
code.
With a solution to this fundamental problem, Anglia were able to integrate
many of KDM's peripheral activities within the core Navision system. The
traders themselves drive all trader performance reporting and league tables
from posted sales contract data generated. On-line cost estimating for
contract margin is also available in Navision, replacing another bespoke
application. Purchase orders for haulage can be printed from the system
directly: selecting the individual packs for delivery now performs this. All
necessary information for the port and haulier can be produced from the
system and forwarded by fax or e-mail. It is even possible to generate the
customer's sales invoice from a haulage purchase order once shipment has
been confirmed which is a tremendous time saving.
The Business Benefits
The Navision solution also allows KDM to maintain their tight control on
operating margins and trader performance, as the cost estimates given at
sales contract stage can be compared with the actual costs later on, even if
the original contract has been split into several shipments.
Traders Budget Form – Displaying Monthly Sales and Profit Targets
"Operating with a totally integrated solution that is tailored to the way we
want to work has already provided us with significant productivity gains"
explained Richard Fairbanks. "We have greatly reduced paperwork within the
business while providing a better information service to our clients. The
system now enables us to compete more effectively in our marketplace using
the information provided by the system for competitive advantage"
"The KDM system demonstrates how quickly a system based on enterprise
application integration (EAI) principles can be deployed using a combination
of standard Navision functionality and the powerful development
environment," explained Geoff Turtle, Anglia's Lead Consultant on the
project. "The net effect of this approach is that the creation of an
integration architecture reduces IT costs and facilitates business
flexibility and responsiveness. Furthermore, being a modern 32 bit system,
the ideal building blocks are now in place to facilitate an e-commerce
solution in future".
Hardware & Software
Navision Financials
Bespoke Navision Applications
Services Required
Navision Solution Model
Project Management
Business Consultancy
Navision Bespoke Design
Navision Programming & Testing
Navision Financials Integration & Testing
User Training