Automating an engineering business

Following the rapid growth of Heatcraft Asia Pacific through acquisition to dominate as a significant player in the refrigeration manufacturing market, a business re-engineering project was undertaken to bring together the new organisations that comprised Heatcraft into a more cohesive operational unit. As part of this re-engineering effort, 22 projects were commenced, including one to retain a single ERP system for Heatcraft Asia Pacific. SSA PRMS was chosen as the ERP application for the new entity.

Heatcraft specialises in the manufacture of worldwide refrigeration products to suit individual requirements for refrigeration, air conditioning and process applications. Heatcraft Asia Pacific is now a major player in refrigeration manufacturing in Australia and New Zealand with 800 employees. Over a period of two years, Heatcraft went from minimal market share to acquire the number one and number two players in the Australian and New Zealand refrigeration market.

Heatcraft was very clear about what it wanted from its ERP system and business processes. This was how best to satisfy the external customer. The company felt that pre-merger, the organisation's focus had shifted to satisfying internal stakeholders and therefore the organisation's main purpose had been buried. That is, the ability to set and efficiently achieve a Service Level/Service Offer at the product and point-of-sale level across their distribution channels. Only once this objective had been satisfied could the second be achieved — the ability to measure and assess the effectiveness of Heatcraft's execution and its effects on customer satisfaction and profitability.

As part of the business re-engineering effort, Heatcraft Asia Pacific had to consider how to bring together one organisation with 30 branches and 25,000 SKUs and another organisation with 38 branches and 15,000 SKUs into a combined entity with 40,000 SKUs and 68 branches that could interface to a warehouse management system and into an analytical focus forecasting process. More importantly, Heatcraft had to consider the cultural issues of merging two organisations that previously were fierce competitors.

"Given that we had the customer firmly as the one to benefit from our business re-engineering effort, deciding on what system would help best satisfy this objective was a lot easier," said Rony Kordahi, Chief Technology Officer, Heatcraft Australia & New Zealand. "We looked at the existing systems and the one that would require minimal modifications to help us simplify the demand fulfillment process and reduce the potential for service offer failures (focused on product flow) and the ability of the system to simplify back office processes (focused on activities post product delivery). It was decided that the latest version of SSA PRMS would enable us to satisfy both our customer objective and our administrative objective. There was no need to move to a newer system, when upgrading PRMS would help us realise a faster return."

Heatcraft made only eight major modifications and 122 minor modifications when upgrading to the new version of SSA PRMS, enabling them to reduce the total cost of ownership of the solution moving forward. On the previous version, up to 1000 modifications were in place.

The decision was made not to use external consultants. This decision was made on the basis of creating greater ownership of the business processes within Heatcraft. "I won't say that the decision to not use consultants made the implementation easier, in fact, it made it more difficult from a resourcing perspective, but we believe that the benefits in adopting this approach to be substantial and to lead to greater sustainability," said Kordahi.

A project team was appointed, with the CEO taking on the role of Project Champion. In addition to the different project teams, Super Users were also instated. The super user was a branch/state/regional/head office staff member who was given detailed relevant knowledge of business information system; was linked to a team of super users and IT technical support staff; was trained to support a set of users to maximise their efficient use of the system and was fully equipped to provide user support. These super users were seen as a key part of the project's success.

User change and acceptance were seen by far and away to be the biggest challenge around the upgrade. "Trying to marry together two very different organisations with very different systems and processes and with divergent cultures can only be achieved by a focused implementation with very clear objectives," said Kordahi.

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