Lincom Group is an Australian owned and operated family business, which serve the global quarry and mining industries through subsidiaries such as Lincom Pacific Equipment, Powerscreen Australasia and Lincom Equipment Rentals. The Group provides a full range of hire, sales and services for industrial strength screening and crushing equipment for the extractive and recycling industries.
During the three years leading up to 2007 Lincom's management discovered that not all enterprise resource planning (ERP) systems are equal. After undergoing their own ERP deployment in 2004, the Group soon realised that the software was inadequate for the multi-company, multi-scenario operations required at Lincom. At the end of financial year reports were not delivering the information that management needed.
It was the middle of a major resources boom. Demand for Lincom products and services was growing and the organisation could not afford to be constrained by poorly performing software. It was time to acknowledge that the Group would have to replace the ERP system with one that better suited their business model.
Lincom's finance and IT departments worked together to evaluate the options. They investigated a range of financial and ERP systems, paying particular attention to the processes inherent to each potential system.
After careful consideration, the evaluation team selected Microsoft Dynamics AX as the best fit for the Group's many and varied requirements from hire activities to sales, engineering, warehousing and service through to multinational financial operations. Shortly thereafter Professional Advantage were signed as implementation partner.
It took nine months to strip out the old ERP system and to go live with Microsoft Dynamics AX. The bulk of Lincom's companies switched to the new software on May 2008 with one remaining company going live on June. All in all, the entire process ran smoothly. The deployment involved all major modules within the ERP suite including manufacturing, production, projects, hire, warehousing and financials.
One of the benefits to come from the deployment is that for the first time, Lincom management is able to identify and understand their costs across each division. For example, the software's project management functionality has made it possible to analyse the cost of sale and therefore profitability for each piece of Lincom's heavy machinery. Under the previous ERP system any costs incurred in adapting these machines to meet Australian standards were charged to a catch-all category called ‘Book to Machine’, a situation that made it impossible to identify the money and time spent on any individual item of equipment.
Stock control and reconciliation have improved, now they have better inventory controls and they can track the stock, wherever it is. Sales analysis has also benefited with management more easily pinpointing which staff are most successful, what is selling or hiring, and other associated trends. During implementation a number of immediate process improvements were identified and introduced. There were a lot of areas where Lincom were bleeding costs that they did not need to.
According to Carolyn Ingleson, Business Development Manager, Professional Advantage, this was an exciting and challenging project for Professional Advantage as mining services is the strategic area of interest. It was a boom time for the resources industry when Lincom chose to deploy a new system and now, when the market changed, they are in a better position to deal with it.
Within the next 12 months the Group will begin to explore some of the more sophisticated features of the Master Planning and Customer Relationship Management modules. Production planning will continue to be refined while further down the track, the company is considering advanced warehousing tools such as barcoding and scanners.
Nearly a year after going live, Lincom are confident that the new ERP system was the right choice. The previous package lasted three years and it cost them more than it has taken to implement Microsoft Dynamics AX. This time around they have chosen something that will last at least ten years and which will grow with the company.