For many years, Dynea Group had manufactured adhesives at its production locations all across Europe. When Dynea’s owners decided to sell the company’s factories, they aimed to structure operations in such a way as to provide the most attractive conditions to investors. That included minimizing the cost of running the manufacturing business to enable the new owners a profitable start as well as ensuring the best possible process efficiencies. In working toward these goals, the owners were particularly concerned about seven factories that were to be sold as a group.
Moving from a customized ERP system to a standard Microsoft Dynamics environment
In this respect, Dynea’s IT infrastructure and its operating costs posed a challenge. Dynea had invested in an Oracle ERP system that was expensive to maintain and operate. To adjust this complex and highly customized system would require going through an upgrade followed by adjustments to meet the requirements of the new business entities. The owners felt going this route was too labor-intensive and costly, and the eventual day-to-day running costs of the software would still be far too high. In fact, these expenses would increase by approximately 80 percent. A consulting company Dynea leaders hired to help them manage the organizational and technical changes, IZARA, also confirmed that the Oracle system was far too feature-rich for the relatively uncomplicated process manufacturing Dynea performed. While the main objective was to reduce costs in order to be able to offer attractive terms to potential buyers, Dynea also hoped to simplify the technology used to run the operation and avoid forcing any purchaser to invest in capabilities that were not required.
Following a recommendation from project team members and IZARA, Dynea implemented Microsoft Dynamics AX 2012 in a private cloud as the ERP system for the factories and operations to be sold. In addition, the company relied on To-Increase Business Integration Solutions for Microsoft Dynamics AX—To-Increase Connectivity Studio, To-Increase Data Collection Studio, and To-Increase EDI Studio—to facilitate the change and support efficient, continuing operations in the spun-off entities.
Reducing the cost and complexity of IT operations and bringing greater flexibility and scalability into the business
The project was a resounding success. The entire software implementation, including data migrations and systems integrations, was completed within a short 12 months. Columbus served as the implementation partner. Standard Microsoft Dynamics AX without any customizations fully met the factories’ operational requirements. However, the new ERP infrastructure will have nowhere near the administrative workload its predecessor imposed. As a result of this change in ERP software, annual software running costs decreased by approximately €750,000 (U.S.$957,000). An equity firm based in Germany acquired the group of seven Dynea factories that since then do business under the brand of Prefere Resins. Other investors quickly purchased the other Dynea operations on the market.
Jakob Ingemann, the lead consultant on the project, owner of IZARA, and CIO-as-a-service at Prefere Resins says, “The To-Increase Business Integration Solutions helped us perform rapid and successful technological and organizational change at a large scale. They contributed to a much lower overall IT footprint and significantly lessened complexity, and made it possible to introduce the flexibility and scalability the businesses sought.”
New standard integration between ERP and manufacturing software
In the newly simplified ERP infrastructure, To-Increase Connectivity Studio, which during the initial implementation supported smooth, reliable data uploads, provides the link between Microsoft Dynamics AX and DeltaV, a process manufacturing tool used in the glue factories. Responding to production orders from the ERP system, DeltaV manages the actual manufacturing including the consumption of materials. At the end of the process, Connectivity Studio facilitates updates from DeltaV back into Microsoft Dynamics AX. “The interface between Microsoft Dynamics AX and DeltaV, provided by To-Increase Connectivity Studio, is very efficient and extremely reliable,” says Ingemann. “We are now making it available to the other factories, so they can also simplify their manufacturing process.”
Replacing two warehouse systems with a single, mobile software tool
Closely integrated with Microsoft Dynamics AX, To-Increase Data Collection Studio replaced two third-party warehouse management software tools that interfaced with the previous Oracle system as well as each other. “Embedded within the Microsoft Dynamics AX solution environment, Data Collection Studio provides us with a fully automated warehouse management system that works largely with barcode readers and truck-mounted terminals,” notes Ingemann. Data Collection Studio furnishes warehouse workers with the information they need to pick the right goods from the right locations, finish goods coming out of production and label them properly, and perform accurate, efficient shipping.
Reliable, efficient customer and supplier communications at a fraction of previous costs
The previous Dynea operations used software from Basware to receive and scan electronic invoices and insert them into a workflow for the company’s finance team and to expedite Dynea invoices to customers. Dynea paid more than €80,000 (U.S.$102,000) per year for the software license and for the services of receiving, scanning, and forwarding invoices. Eliminating these expenses, consultants from To-Increase and Columbus replaced those software functions with a workflow and electronic data interchange (EDI) connections with customers and suppliers that they created by means of To-Increase EDI Studio. This work included building an EDI connection between Microsoft Dynamics AX and an Austrian customer’s SAP system that provides flawless exchanges of information and documents between SAP and Microsoft Dynamics AX.
Proven technology to support organizational change
“The To-Increase team addressed our requirements and worked very quickly and effectively to make sure the solutions delivered the functionality we hoped to achieve,” says Ingemann. “To-Increase played an important role in facilitating a swift and problem-free technological change. This enabled us to focus on other aspects of change, especially in terms of its impact on people. The To-Increase solutions work perfectly within the Microsoft Dynamics AX environment, come at a very reasonable upfront cost, and incur a low operational and financial overhead for day-to-day operations.”
The event of a company splitting up and selling operations to investors or other enterprises is not at all uncommon in Europe. “Many times, before companies can sell proceed with a sale or approach potential buyers, they need to simplify their business management technology and remove needless complexity from systems and processes,” Ingemann explains. “To-Increase offers a range of proven, effective, and affordable tools, together with extensive technology and industry expertise, to help accomplish these adjustments. The Dynea project was my first experience with To-Increase, but I have used the Business Integration Solutions in comparable endeavors since then.”