AllChem Industries Saves $2.5 Million in Labor Costs in 2 ...



Overview

Country or Region: United States

Industry: Wholesale & Distribution

Customer Profile

Established in 1982 as an importer of chemical raw materials, AllChem Industries has become a leader in water treatment, petroleum additives, and industrial chemicals.

Business Situation

AllChem Industries was unable to get the information they needed to easily make decisions and run their multi-national, growing business. Locating information was labor intensive.

Solution

Working together with Microsoft reselling partner Stanley, Stuart, Yoffee and Hendrix, AllChem Industries implemented Microsoft® Business Solutions–Solomon with customizations.

Benefits

■ AR balances reduced by 23.5%

■ Inventory lead time reduced

■ Inventory turns increased

■ Saved one FTE in AP

■ Month-end closing reduced 82%

| | |"Overall, we are better suited to meet the needs of all our customers because of [Microsoft Business Solutions] Solomon."

Kevin Sayre, Chief Information Officer, AllChem Industries

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| | | |AllChem Industries was unable to get the information they needed to easily make decisions and run |

| | | |their business. Since the installation of Microsoft Business Solutions–Solomon (now part of Microsoft|

| | | |Dynamics™), CIO Kevin Sayre reports that the company has been able to vastly improve their business |

| | | |systems and processes. In fact, their improvement contributed to AllChem Industries selection for the|

| | | |list of the Top 100 Fastest Growing Companies in Florida for each of the two years following their |

| | | |Microsoft Solomon implementation. |

| | | | |

| | | |AllChem has realized reductions in accounts receivable balances outstanding, cut inventory lead time |

| | | |by almost half, saved $1 million per year in labor costs, and reduced month-end closing effort by 82 |

| | | |percent. |

| | | | |

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Situation

AllChem Industries was established in 1982 as an importer of chemical raw materials. Since then, through expansion and diversification, AllChem has grown to become a market leader in the fields of water treatment, petroleum additives, and industrial chemicals with operations in the U.S., the Netherlands, and Singapore. In addition, they have a growing commitment to the feed, pharmaceutical, and specialty chemical markets. AllChem now consists of the following product groups: Industrial Chemicals, Petroleum Chemicals, Performance Products, and Specialty Chemicals.

Kevin Sayre, AllChem's Chief Information Officer, reports that prior to their implementation of Microsoft® Business Solutions–Solomon, employees didn't have the proper tools to be competitive in their industry. Locating information was a labor intensive process that often wasn't worth the time, according to Sayre.

Solution

On November 1, 2000, AllChem purchased Microsoft Business Solutions–Solomon. Just two months later, on January 1, 2001, they went live. "It's been an exciting ride with Solomon, and we've definitely seen some benefits," says Sayre.

AllChem's biggest expectation prior to implementation had been that they would be able to get a system that could meet all their needs. Sayre has since learned there is no solution that will supply everything a company wants. A company has to work with a system to get something that is of benefit to them, which is what AllChem has done with their Microsoft solution. "It's tremendously flexible, and there are tremendous resources to get the application functioning the way you want. You want information that is accurate and timely. You want to get it in the hands of the people so they can make decisions that will make the business more profitable."

Working with Microsoft reselling partner Stanley Stuart Yoffee, & Hendrix (SSYH), along with Microsoft, Sayre reports AllChem has been able to vastly improve their business systems and processes. In fact, their improvement led to AllChem Industries being named to the list of Top 100 Fastest Growing Companies in Florida for each of the two years immediately following their implementation.

One factor in AllChem Industries' decision to purchase Microsoft Solomon is its customizability. "We rely heavily on the open architecture of the [Microsoft] SQL [Server™] database," Sayre says. "We have developed an intimate knowledge of the table structure of Solomon using Microsoft Query and the ODBC. Over the past six months, we have authored in excess of 20 Crystal Reports ranging from Production Planning to Warehouse Throughput to Commissions."

Benefits

Accounts Receivable Reduction

"Accounts [receivable] outstanding went from 75 percent current to 98.5 percent current in about three months" Sayre says. He attributes this to the availability of accurate information for the people who needed it, when they needed it, which allowed AllChem to accelerate processes.

Inventory Reduction and Warehouse Consolidation

Due to their limited shelf life, chemicals should not be stored on shelves any longer than necessary. A company's goal is to minimize warehouse shelf time and get chemicals to the customer in 'just-in-time' fashion. Based on information they have been able to harvest from Microsoft Solomon, AllChem's production facility has been able to develop a reliable production schedule and reduce the lead time on orders from 14 days to 8 days, a time savings of almost one-half.

In addition, based on the lead time reduction, coupled with the information they now have available to them, AllChem has been able to consolidate warehouse locations and negotiate reduced rates with freight companies.

Month-End Closing Reduction

Another directly attributable benefit is that AllChem's finance department has seen monthly closing procedures reduced by 82 percent. This time savings has enabled the accounting group to pursue other projects that have led to improved relationships with our customers and vendors, according to Sayre.

Labor Savings

Sayre reports that after having been on the Microsoft Solomon solution for 2.5 years, AllChem had saved a total of $2.5 million. "The savings can be attributed to the streamlining ability of the software," Sayre says. "We were able to trim down a lot of the staff time the accounting department needed to process month-end closing.

We were able to go from three people in three weeks to one person in three days [to complete month-end closing], and that was almost an immediate benefit moving to the system."

The Strength of Three Organizations

"An unexpected virtue of Microsoft has been its people," Sayre says. "As soon as I heard that Microsoft was acquiring Great Plains®, I had the typical reaction that most people have to big business. However, I have been pleasantly surprised. On several occasions, Microsoft's team members have demonstrated their commitment to us as a customer.

Several representatives have gone the extra mile to make sure that we were operating optimally. We have developed so much confidence in Microsoft that we have agreed to become a beta site for new releases."

Sayre thinks the strengths of all three organizations have led to a very successful implementation of Solomon. "Our dedication, SSYH's resources, and Microsoft's people truly have developed a working relationship that will only lead to all of our organizations reaping the rewards."

AllChem's leadership and employees have high technological expectations. The technical resources of SSYH and Microsoft help their internal IS department meet those expectations on a daily basis, according to Sayre. "Put simply, our business partners make us look good. Often, a system as robust as Microsoft Solomon is very intimidating to users and technical staff. SSYH and Microsoft have made great efforts to alleviate the fears and concerns that are often associated with full scale implementation of company-wide systems. Frequently, companies do not survive an implementation such as ours," Sayre says.

"Overall, we are better suited to meet the needs of all our customers because of [Microsoft Business Solutions] Solomon."

Microsoft Dynamics

Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship

and supply chain processes, Microsoft Dynamics brings together people, processes and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.

For more information about Microsoft Dynamics, go to:

dynamics

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| |Software and Services

■ Microsoft Dynamics

− Microsoft Business Solutions–Solomon |Hardware

■ Dell PowerEdge 2500SC | |

© 2003 Microsoft Corporation. All rights reserved. This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, Great Plains, Microsoft Dynamics, Windows, Windows Server, and Windows Server System are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Document published July 2003 | | |

For More Information

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For more information about Stanley, Stuart, Yoffee and Hendrix products and services, visit the Web



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"It's tremendously flexible, and there are tremendous resources to get the application functioning the way you want."

Kevin Sayre, Chief Information Officer, AllChem Industries

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