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Australia is rich in terms of natural resources and the current resource boom has seen a proliferation of companies looking to capitalise on this.
For construction and mining companies, which are typically job-based, achieving and maintaining a competitive position through pin-point accurate job costing is imperative.
Being more competitively positioned is why Phil Stalker, general manager at Valley Longwall Engineering says they went looking for “a serious ERP system that would enable them to get more control over labour hours and other job related costs.”
“Basically, we had outgrown our old system and simply needed a serious ERP system, which is the main driver behind our decision to implement Greentree business management software.”
Challenge
Valley Longwall Engineering needed to improve its competitive position through more accurate job costing and inventory management. It also needed a system that would scale to accommodate future growth through acquisition.
Solution
Greentree Financial management system plus job costing, inventory and payroll.
Results
Valley Longwall Engineering now has a dependable job costing process, which management can rely on. All costs are now captured and accurately allocated to the appropriate job or sub-job.
Management of multiple jobs has been simplified and planning of future jobs has been streamlined. Excel reporting has improved the reporting and business decision making processes.
It is envisaged that Greentree will easily scale to meet the demands of growth through new business acquisition.
The business situation
Job costing is reasonably complex in the mining support industry, where a customer is charged for underground drilling by the metre and type of drilling required.
Any job may typically be multi-levelled, so jobs need to be set-up in a parent/sub-job structure and involve multiple customers and also need to draw upon other parts of the business for resource, skills and expertise.
In such a specialised industry, there is also the need to manufacture your own parts and Phil Stalker says this was a process predisposed to error since they were using Excel spreadsheets for inventory management.
Sub-job structure makes complex management easy
With several parts of the business contributing time, skills, resources and expertise to the completion of any given job, management becomes quite complex.
This becomes even more difficult, when the business is running multiple disparate systems with 2 -3 different sets of data, which is another reason why Phil Stalker says they needed to get a serious ERP system.
The whole process was predisposed to error, but Greentree has factored this out by enabling the set-up of complex jobs in a hierarchical structure with multiple sub-jobs.
Job costing accuracy and inventory management improvements
In an industry, where jobs can run into the hundreds of thousands of dollars, the accurate costing of jobs has a direct impact on the bottom-line.
Greentree’s job costing and inventory modules combine to enable Valley Longwall Engineering to accurately cost jobs including the inhouse manufacture of their own parts and then commit parts to stock or jobs and this has streamlined a previously disjointed and inaccurate process. This used to be done through multiple spreadsheets, which Phil Stalker says were inevitably wrong.
“Management of complex jobs has been simplified and is now more dependable, since we now have certainty around the capture of all costs associated with a parent job.”
Excel integration is good
Valley Longwall Engineering had been using Excel widely to run various parts of the business, so being able to leverage Greentree’s Excel integration for smarter analysis and reporting has been good Phil Stalker says.
Several Valley Longwall Engineering staff were already familiar with Excel, so the seamless integration and easy upload of data and flexible reporting have improved the decision making process for management, who can get summary reports or drill down to low level of detail.
Greentree’s scalability strategically significant
Phil Stalker says Valley Longwall Engineering has plans for a reasonably aggressive growth strategy, so the potential of Greentree to scale to the businesses future growth needs was another key issue, when evaluating potential systems.
“Growth is likely to be through acquisition as opposed to organic” says Phil Stalker and Greentree appears to have the potential to easily scale to accommodate new business acquisitions with differing business rules and financial structures.
Local expertise
In terms of the performance of the local Greentree partner Phil Stalker says, “The Greentree partner were good and knowledgeable about the Greentree product. They are dedicated and resourceful in meeting expectations and they have simply never let us down.”
Phil Stalker’s confident Valley Longwall Engineering will be using Greentree for a good many years to come and his decision to implement it has resulted in more accurate job costing and improvement in business competitiveness.