Customer Solution Case Study
/ Sun Logistics Deploys Flexible Enterprise Resource Planning for Better Customer Service
Overview
Country or Region:Hong Kong SAR
Industry:Logistics
Customer Profile
Sun Logistics Ltd., a 50/50 joint venture between logistics company, Sun Hing Group of Companies, and property giant, Sun Hung Kai Properties, is one of Hong Kong’s fastest growing e-logistics services companies, serving a variety of customers around the globe.
Business Situation
Wanting greater efficiency in its one-stop logistics service, the company looked for an out-of-the-box enterprise resource planning (ERP) and supply chain management (SCM) solution on which it could integrate unique task management, warehousing and fleet management, and billing processes.
Solution
Sun Logistics engaged the help of The Enterprise Solutions Group to help roll out Microsoft® Business Solutions–Axapta® enterprise resource planning (ERP) software.
Benefits
Data is visible and shared with internal and external clients
Increased accuracy of fulfillment and delivery process
Shortened billing cycle
Custom reports are generated to improve customers’ business
Experience spurs spin-off consultancy / "Logistics business nowadays still deals with the physical flow of goods. You can only differentiate yourself in this very traditional business through greater efficiency and the delivery of value-add
Karen Lee, General Manager, Sun Logistics
Sun Logistics, Hong Kong's leading third-party logistics (3PL) company, was looking for an enterprise resource planning (ERP) solution to fit its industry-specific requirements. The 3PL company needed a flexible solution that would integrate with logistics functions, such as fleet management and bill of materials (BOM). After a year-long search, Sun Logistics, with the help of local solutions provider The Enterprise Solutions Group (ESG), implemented Microsoft® Business Solutions–Axapta®. Sun Logistics used its custom-built functionality to develop a revolutionary 3PL specific solution dubbed Axapta Logistic Execution System (ALES). Combining ERP, supply chain management (SCM), task management, and logistics functions, ALES helps Sun Logistics to respond faster, increase information visibility, and shorten its billing cycle. Additionally, the company used its experience in developing ALES to spin off a highly promising logistics consultancy arm.
Situation
In 2000, two Hong Kong-based companies, Sun Hing Group of Companies and Sun Hung Kai Properties, launched Sun Logistics—an e-logistics operation, which combines best logistics practices, first class infrastructure support, and the latest Web-based technology, to provide an e-logistics service to its customers.
Sun Logistics serves a wide range of multinational companies as well as local small and medium enterprises (SMEs) from a wide spectrum of industries, including fast moving consumer goods (FMCG) and high value products such as cosmetics and electronics. To remain competitive in a marketplace with blurred geographical boundaries, the immediacy of the Internet and mounting customer expectations, Sun Logistics needed an elegant and adaptable enterprise resource planning (ERP) solution to suit its unique business model. The ERP solution needed to bridge physical goods flow and information flow, which are the two critical components for efficient and effective logistics operations.
As Sun Logistics cultivated more success, it became clear to the partner companies that its then existing ERP system was not scalable enough to meet its growing business demands, much less support this vision over coming years. The group decided to employ IT to embellish its service offering and differentiate itself from the competition.
Karen Lee, General Manager, Sun Logistics, says: "Logistics business nowadays still deals with the physical flow of goods. You can only differentiate yourself in this very traditional business through greater efficiency and the delivery of value-added services. IT is an enabler for this and a new way of doing an old business."
While off-the-shelf solutions from large ERP software vendors offered advanced functionalities, Sun Logistics needed a platform flexible enough to suit the unique needs of an e-logistics business. The ERP solution needed to be customisable and able to integrate with third-party logistics (3PL)-specific functions, such as fleet management and bill of materials (BOM) module for its packaging operation. The BOM module is used to accurately define items and products and make appropriate inventory entries in the corresponding items as well as calculate packaging costs, and is an integral part of the group’s service offering.
Lee recalls the frustration she and the various department within Sun Logistics experienced when assessing the features of ERP solutions from vendors. "They tried to sell us manufacturing modules, which we did not need because we did not have a factory. On the other hand, they could not present us with a fleet management module, which was what we urgently required."
While return on investment (ROI) was high on its agenda, Sun Logistics was looking at returns in terms of greater efficiency in the overall operations flow and the ability to pass such benefits to its clients. Furthermore, the company required a solution that could be installed within a relatively short six-month time frame because as a 3PL, time is of essence and the operations cannot come to a halt.
Solution
After a year-long search, Sun Logistics chose Microsoft® Business Solutions–Axapta®, a multiple language, multiple currency ERP solution, from a short list of four vendors. The decision to go with Microsoft Axapta stemmed from its unique ability to be modified to suit specific industries, such as logistics. The flexible features of Microsoft Axapta provided Sun Logistics with the basic modules to build and design a new system, specifically suited to 3PL companies. Additionally, Sun Logistics could seamlessly plug an existing fleet management module developed in-house into Microsoft Axapta.
In March 2003, Microsoft partner and solutions provider The Enterprise Solutions Group (ESG) deployed Axapta into Sun Logistics. Using Microsoft Axapta, ESG worked with Sun Logistics to write a new billing module and create a new task management module integrated with CRM functionality. ESG and Sun Logistics also bolstered an existing inventory and fleet management module, using the Microsoft Axapta software to integrate it with mobile technology (for its fleet and warehouse operations) for more visibility of the movement of inventory.
The entire four-month development effort by ESG, along with support from Microsoft paved the way for the creation of a 3PL platform dubbed Axapta Logistic Execution System (ALES). The ALES platform combines ERP, supply chain management (SCM), customer relationship management (CRM), and vital logistics functionalities, such as fleet management and BOM.
Using ALES, Sun Logistics can tailor its existing ERP, SCM, and CRM modules, allowing users to integrate their business processes within the solution itself.
Most importantly, Axapta, with its version layer technology, permits customers, business partners, or Microsoft to modify the system separately on eight different functionality layers, helping the company re-use this functionality while making sure none of the changes are lost during the upgrade. Sun Logistics benefited from such flexibility, and built its own billing module.
With Microsoft supporting the development of ALES, Lee and her team are confident that the future support for the system is guaranteed.
Benefits
Dynamic Task Management for Proactive Handling of Demands
Anticipating problems before they even arise is a hallmark of proactive management, which all 3PL companies desire to achieve. By incorporating task management into Microsoft Axapta, Sun Logistics has managed to accomplish this. Lee and her team are able to capture and manage problems effectively by running regular analyses on resources based on pick rates or fulfillment accuracy. For example, if more people are needed for daily loading operations to meet an increase in the number of orders, ALES can rapidly allocate these resources. The same holds true for truck capacities, which can be predicted and prioritised, based on histories of daily demands.
Improved Customer Satisfaction with More Responsive CRM
Sun Logistics uses ALES's CRM module to better serve its customers, and swiftly respond to their inquiries. With the touch of a button, customer service representatives can access the task management system, and provide customers with the most up-to-date status of their shipment or orders. ALES's CRM also allows Sun Logistics to offer value-added services to customers via Web-based status reporting. As a result, Sun Logistics can better serve its customers, wherever they are based in the world, and, in turn, be assured of greater customer retention.
Efficient Inventory with Warehouse Management
With ALES, Sun Logistics can manage its warehouses more efficiently, and is able to locate stocks according to batches, locations, pallets, and serial numbers, to offer precise online inventory balance for its customer reference. Customers can access the system to monitor inventory, and tell Sun Logistics how many months of stock it can handle. Sun Logistics can, in turn, alert customers to dormant stocks and those that need replenishment.
Enhanced Storage, Transport and Delivery Activities with Improved Fleet Management
Before the deployment of ALES, Sun Logistics had a fleet management system that planned and routed trucks for delivery. The company boosted this system by combining ALES with mobile technology for more speed and efficiency. As a result, customers can be informed of the exact location of goods. Not only was Sun Logistics able to automatically route and schedule its fleet, the system also permits customers to track the status of their transactions online.
Complex Quotations Replaced by Simple and Automated Billing System
By integrating warehousing, packaging, and delivery activities with billing and finance departments, Sun Logistics refined the often-complex generation of billing and quotation information. The company managed to shorten its billing cycle for both internal and external clients.
One year after ALES went live, Lee and her team managed to optimise Axapta to produce vital customised reports for customers. One example is its recently developed aging report, which is used to advise customers—specifically the SMEs—on which goods are not selling fast enough. This in turn gives customers better control of their inventory. Faster turnover of goods means more revenue for Sun Logistics's customers.
Experience Spurs Spin-off Business for New Revenue Streams
Through the search for the perfect ERP solution and the eventual development of ALES, Sun Logistics stumbled upon a very promising business concept: a logistics solutions consultancy. In 2004, the company set up a new company, a spin-off from its IT department. The mission of this new company is to help 3PL companies that are struggling to find a logistics solution that fit their needs or those that simply wish to find new ways of doing things.
Lee says: "We always had a very strong resistance to systems that require us to change our processes. What we wanted was a system that could be modified to suit our processes. At the end of the day, you need a solution that understands your culture. The flexibility of the Axapta solution allows us to do just that."
Microsoft Business Solutions
Microsoft Business Solutions offer integrated business applications and services that allow small and midsize organizations and divisions of large enterprises to connect employees, customers, and suppliers for improved efficiency. The financial management, customer relationship management, supply chain management, and analytics applications work with other Microsoft software, including the Microsoft Office System and the Windows operating system, to streamline processes across an entire organization. This gives businesses insight to respond rapidly, plan strategically, and execute quickly. Microsoft Business Solutions are delivered through a worldwide network of channel partners that provide specialized services and local support tailored to a company’s needs.
For more information about Microsoft Business Solutions, go to: