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KDM International

 

Anglia Business Solutions provides KDM International PLC with a significant competitive advantage using a world-class information technology solution based on the award winning Navision Financials business software.

 

Industry : Timber Trading
Scenarios : Business Operations


Since its foundation in 1975, KDM International has achieved an impressive growth rate in its timber trading division. At its prestige head office, Kesgrave Hall, Ipswich, the company established the first hi-tech timber trading room of its kind in the UK in 1995. As a result the organisation experienced record sales and profits during the following years despite increased competition in its marketplace.


Company background

In an industry not noted for the advanced use of technology, KDM is an exception. The organisation's mission statement is to increase the value of the company by exemplary trading and the use of technology. In addition to a significant investment in the development of internal IT systems, the company launched BT Global WoodTrader, a joint venture between British Telecom and KDM to trade timber over the Internet in 1998.


In addition to timber trading, KDM has two other operating divisions. Snowgreen imports Christmas trees for distribution to wholesalers, and will soon supply from new local plantations as well. The Internet Service division provides access to the Internet and specialised content via TIMBERWeb, a service aimed at other organisations in the timber industry. This division also operates COUNTYWeb, a branded service funded from advertising revenues that provides information on local products and services within each County region.


The Business Need

KDM was concerned on the build-up of information across a range of different internal software systems as well as their lack of integration. The challenge facing the Company was to select a solution that would incorporate all of their existing bespoke solutions and provide a platform enabling them to move towards electronic trading in the long term.


The Selection Process

“We looked at a variety of solutions that purported to offer the combination of Windows based packaged offerings and tailoring facilities that we needed to meet the demands of the different businesses,” said Richard Fairbanks KDM’s Financial Director. “Our experiences of developing our own solutions enabled us to quickly eliminate those products that failed to meet our requirements for a flexible true Windows based solution. We were very impressed with the modern design and extensive features built into the Navision system as standard. These, coupled with the ability to quickly develop the specialist modules we needed, convinced us that the system would provide a suitable platform that would meet our current and future requirements.


We were also encouraged by the approach taken by Anglia Business Solutions. They spent some time getting to know our business and administrative processes prior to suggesting a solution. Their consultative method of working provided the foundation for a jointly developed system design that precisely matched our needs.”


The Solution

The agreed system design consisted of a combination of standard Navision functionality and specially written modules designed to meet the specific needs of the timber trading division. The specialist modules consisted of:

  • A traded sales module that incorporates back-to-back sales orders and purchase orders containing a schedule of several shipments and deliveries as well as a built in contract and credit control authorisation procedure.

  • A stock in transit module that tracks timber shipments from the mill to the UK port of entry and that includes a bill of lading indicating sailing details such as vessel, departure, arrival port and date.

  • A haulage and billing module that provides detailed delivery instructions to the haulier using haulage orders and that can be used to generate sales invoices for the relevant goods.

 

screenshot showing Trade Form Costs Tab in Dynamics NAV

Trade Form (Costs Tab) – Showing Trade Materials and Financial Aspects.

 

The Implementation Process

The green light to proceed with the project was given in August against a tight timescale of going live at the beginning of the new KDM financial year in January. The task included the production of detailed specifications for all of the special modules, prototyping and testing the bespoke elements, commissioning and testing the core Navision system and training all of the users on both the standard and special functionality. A detailed project plan was produced that defined the responsibilities of all resources involved. Once the plan was agreed, progress was monitored using a series of project management meetings. 


The main business benefit offered by the Navision solution is total integration. A whole raft of bespoke applications has been replaced with a single core system. Also, for the first time KDM are operating a single system across all three businesses, despite their differing requirements.


Full integration is by no means as simple to achieve as it sounds. Originally KDM used a traditional accounts package for sales contract processing and invoicing. All timber sold was processed through the package against a generic material heading. Quantities were processed in the unit of purchase, which may be different from KDM's stock unit (cubic metres) and the unit of sale.


This level of detail was not sufficient for KDM's operations team, who have to deal with the receipt and shipment of individual packs of timber, the lowest sales denomination, for which a full specification of the pack contents (all dimensions and timber markings) is required. Individual packs can contain many different quantities and lengths of a particular cross-section of wood. To meet the needs of the operations team, KDM had built a separate system for tracking the individual packs of timber. Keeping these two separate systems in step with one another was time consuming and needed careful monitoring.


This requirement to process inventory in two very different ways is difficult to cater for in any standard package. The only workable solution from a business perspective is to raise contracts in generic units, process inventory in packs and revert to generic units again at the point of invoice. Anglia recognised this fundamental requirement early on and designed a two-tier inventory system of materials and packs within Navision Financials. Sales contracts and invoices can be handled in the top-level material, whilst actual movements of inventory are processed in packs. The material type for every pack is known, and packs can be allocated to and from sales and purchase contracts on the basis of the top-level material code.


With a solution to this fundamental problem, Anglia were able to integrate many of KDM's peripheral activities within the core Navision system. The traders themselves drive all trader performance reporting and league tables from posted sales contract data generated. On-line cost estimating for contract margin is also available in Navision, replacing another bespoke application. Purchase orders for haulage can be printed from the system directly: selecting the individual packs for delivery now performs this. All necessary information for the port and haulier can be produced from the system and forwarded by fax or e-mail. It is even possible to generate the customer's sales invoice from a haulage purchase order once shipment has been confirmed which is a tremendous time saving.


The Business Benefits

The Navision solution also allows KDM to maintain their tight control on operating margins and trader performance, as the cost estimates given at sales contract stage can be compared with the actual costs later on, even if the original contract has been split into several shipments.


screenshow showing traders budget form in Dynamics NAV

Traders Budget Form – Displaying Monthly Sales and Profit Targets


"Operating with a totally integrated solution that is tailored to the way we want to work has already provided us with significant productivity gains" explained Richard Fairbanks. "We have greatly reduced paperwork within the business while providing a better information service to our clients. The system now enables us to compete more effectively in our marketplace using the information provided by the system for competitive advantage"


"The KDM system demonstrates how quickly a system based on enterprise application integration (EAI) principles can be deployed using a combination of standard Navision functionality and the powerful development environment," explained Geoff Turtle, Anglia's Lead Consultant on the project. "The net effect of this approach is that the creation of an integration architecture reduces IT costs and facilitates business flexibility and responsiveness. Furthermore, being a modern 32 bit system, the ideal building blocks are now in place to facilitate an e-commerce solution in future".


Hardware & Software
Navision Financials
Bespoke Navision Applications
 

Services Required
Navision Solution Model
Project Management
Business Consultancy
Navision Bespoke Design
Navision Programming & Testing
Navision Financials Integration & Testing
User Training

 



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