Case 5
International Trade
This is a privately held Canadian company that specializes in the design, import and wholesale distribution of high quality woodworking and metalworking machinery and related accessories. The company has distribution centers located in Montreal, Quebec and Murfreesboro, Tennessee. The company's brand products are made by its overseas manufacturing partners in Asia. The company sells its products to its end customers including industry users, education organizations and hobby enthusiasts primarily through the big retailers such as Rona, Sears, Home Depot and Canadian Tire. The company enjoys a healthy margin from its niche product offerings.
Challenges
The company encounters some typical problems with an international trade company:
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Insufficient inventory causing delayed sales delivery impacting customer satisfaction and revenue
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Prolonged procurement lead time and lack of visibility on in-transit inventory resulting inaccurate supply forecast
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Inventory management lacking the capabilities of exporting and importing processes
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Demand forecast fully manual and disconnected from the operations and master planning
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Product quality feedback tracking is manual and not methodical resulting in long product design correction cycle and ultimately impacting supply chain
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Solutions of Microsoft Dynamics AX
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Over stock results in cost increase. Insufficient inventory impacts customer satisfaction and revenue. Microsoft AX provides the ATP capability to effectively control delivery time. The company leveraged the functionality to successfully manage the optimal inventory.
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The inaccuracy comes from the uncertainty of the purchase order and the in-transit inventory. Microsoft AX virtual warehouse concept provides the right capability to solve the problem.
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The export/import process needs to identify if the in-transit inventory could be used to fulfill customer orders. Microsoft Quarantine Management capability meets the requirement of this business process.​
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Demand forecast and master planning modules enable automatically generated purchase orders based on the right level of inventory in warehouse, in transit or in quarantine. The productivity of SCM has been improved tremendously through the use of Microsoft Dynamics AX.
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Critical Success Factor
The company offers niche products and enjoys a stable healthy profit margin for its international trade business. The CSF for the company however lies in its key customers of the major retailers, specifically Rona, Sears, Home Depot and Canadian Tire. Microsoft Dynamics AX customer hierarchy functionality fits perfectly to the need of this critical customer relationship management. The EDI integration with these major customers further enhances the relationships and increases its success.
