WHILE Australia’s caravan industry has seen considerable growth in recent years, Sydney-based caravan manufacturer, Millard Australia, had not kept up to date with its accounting and business management considerations.
Although producing over 600 customised units per year, Millard was, up until last year, relying on low-end MYOB software to run its accounts.
Since customers are able to change their minds partway through production, about anything from the type of fridge to colour of awning, the cost or schedule of a job often escalates beyond an original quotation.
Clearly, it was becoming increasingly difficult for management to control costs and inventory at its production plant.
“Essentially, original quotations were best-guesses that didn’t always allow for fluctuations in inventory cost and availability, or for customers changing their minds. And we relied on someone on the shop floor noticing that a stock item was getting low, and re-ordering it in time,” Julie Gibbs, Millard’s purchasing manager, said.
She identified the need for a more comprehensive business management system that would enable them to gain better control of its stock, BOM (Bill Of Materials), project costs and general accounts.
After a thorough review, Millard installed Pro Series Manufacturing from Sage ACCPAC and recruited systems integrator, Foxsoft, to help with integration, customisation and training.
“I won’t say it was a painless process – changing the way you do something is never easy. It is a very structured system that forced us to re-assess many of our procedures relating to goods management, and pay more attention to detail. But this has actually been the biggest benefit: we’re a much more efficient operation as a result of installing it,” Gibbs said.
“With the new system we have visibility, and we quickly realised we hadn’t been costing the vans correctly. Because the system is so detailed, we started putting in all the parts used and creating a BOM.
“We realised there were a lot more costs in there that we hadn’t seen. That lead us to stripping everything down to basics and re costing all the vans and getting a far more accurate idea of what we were actually spending on them,” she told Manufacturers’ Monthly.
“It gave us a better idea of what we were purchasing against each van, and what the items were costing. That was a really big benefit.
“Now with visibility of our inventory, with proper stocktakes where I can enter the stock in and print out stocktake reports, I can see where we are at the end of the month in terms of stock. Because of this visibility we have been able to reduce our stock significantly.”
ACCPAC Pacific 1300 222 722.