Microsoft DynamicsCustomer Solution Case Study

ERP Cuts A$225,000 Costs for Growing Produce Supplier

OverviewCountry or Region: AustraliaIndustry: Wholesale & Distribution

Customer ProfileFounded in 1989, Sydney-based Barden Produce supplies major supermarkets and independent grocers across Australia with fresh fruit and vegetables grown locally and in Asia.

Business SituationFollowing a merger, Barden urgently needed better insight into operations efficiency and business performance in each of its divisions.

SolutionBarden implemented Microsoft Dynamics NAV, customising its sales, purchasing, inventory management and equipment control modules.

Benefits Increased productivity Greater production efficiencies Cost-effective invoicing Higher profitability Improved usability for staff

“For the first time, we can accurately track the profit margins of different divisions.”

Allan Bugg, Business Manager, ICT, Business Systems, Risk & Fraud, Barden Produce

Barden Produce supplies supermarkets and independent grocers nationally with fresh fruit and vegetables. When the company merged its fresh produce operations with another food producer, it wanted a new enterprise resource planning (ERP) system to handle the company’s general accounts and invoicing as well as its sales, purchasing, inventory management and equipment control. In 2009, Barden engaged Microsoft Gold Certified Partner Hands-on Systems to implement Microsoft Dynamics NAV. Hands-on Systems customised a range of modules to help Barden manage the highly variable data sets used by the fresh produce industry. With better information and price management, invoicing and equipment tracking, the company’s productivity improved. Over the first year of deployment, the company made more than A$225,000 in efficiency savings that were attributable to Microsoft Dynamics.

SituationBarden Produce started life as a two-person operation at the Sydney Produce Markets in 1989. Today it supplies major supermarkets and independent grocers across Australia with fresh fruit, vegetables and herbs grown locally, including on its own farms.

The company’s fresh produce division, Barden Fresh Produce, was growing rapidly. However, its existing accounting system was struggling to cope with increased demand.

“Our legacy accounting system was becoming very clunky and slow,” says Allan Bugg, Business Manager, ICT, Business Systems, Risk & Fraud, Barden Produce. “We experienced data loss and unnecessary duplication every time we tried to port data from the database into our reporting applications.”

In addition, the company wanted more detailed reports. Its legacy system couldn’t report clearly on sales and purchases, or analyse in any detail the performance of the company’s individual business units. As a result, Barden’s executives didn’t have all the information they thought necessary for taking sound strategic decisions.

“We had no proper control and everything was run manually,” says Bugg. “I was troubleshooting the system two days a week and it was proving to be very expensive,” says Bugg.

While the company had been considering an upgrade of its IT infrastructure for several years, the

situation came to a head in early 2009 when Barden planned to merge its operations with Queensland-based Durham Farms.

“At a stroke, the merger would increase our size by 25–30 per cent, placing an unbearable strain on our existing systems,” says Bugg. “The merger became a catalyst; we knew we needed a new data management and reporting system.”

SolutionThe company investigated a range of ERP packages, including Pronto Software, Sage Accpac, SAP and smaller solutions tailored to the fresh produce industry. The company also reviewed its own grocery division, which had implemented Microsoft Dynamics NAV 5.0 in 2006.

“We knew what to expect from the product,” points out Bugg, “but it didn’t stop us looking at other solution packages.”

In making its selection, Barden devised several key criteria. It wanted a solution that could manage data from the entire business. In addition, the system would have to adapt to some of the financial requirements peculiar to the fresh produce industry.

“Our industry uses a number of complex accounting procedures,” explains Bugg. “There are government levies that need to be deducted from grower invoices. There is variable pricing, where prices paid for produce aren’t necessarily determined at the point of sale.

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“I was troubleshooting the system two days a week and it was proving to be very expensive.”

Allan Bugg, Business Manager, ICT, Business Systems, Risk & Fraud,

Barden Produce

“Most complex of all, there are multiple inbound and outbound orders, which constantly vary, and depend on how growers deliver produce to us – by crate, carton, pallet – and how supermarkets look to sell it, whether by weight, heads or bunches.”

“The ERP system had to be very, very fast and provide end-to-end support for the unique requirements of the fresh produce industry,” says Mark Turnbull, Account Manager, Hands-on Systems, who helped advise Barden.

“The company doesn’t know in advance what produce it’s going to get in each day; prices vary; and produce has to be packaged differently for every customer,” he adds. “Microsoft Dynamics NAV could accommodate all that.”

After due consideration, Barden Fresh Produce followed its grocery division’s lead and asked Gold Certified Partner Hands-on Systems to implement Microsoft Dynamics NAV 2009.

“It was the right price, it was customisable and our partner knew it could do what we needed,” says Bugg. “We couldn’t be confident that the other products could deliver a system that would achieve what we wanted.”

A two-phase approach was adopted for the development of the solution. The first phase involved Dynamics NAV’s financial modules and began in mid-2008. The implementation also included Microsoft SQL Server 2008 and a range of Windows operating systems, including Windows XP Professional, Windows 7

Business and Windows Server 2008 Remote Services. Staff also received Microsoft Office Professional 2007.

The second phase involved rolling out Dynamics NAV’s customised modules for purchasing, sales, inventory management and equipment control. As a result, documents such levy remittances, grower and customer invoices, and reporting and freight reconciliations are automatically generated.BenefitsBarden Fresh Produce now has a single ERP platform which manages the unique demands of the fresh produce industry. In doing so, the company has achieved significant cost savings and productivity gains.

Productivity savings: A$225,000Even with the 25 per cent increase in the workload that followed its merger, Barden has been able to reduce its finance team by two.

“Dynamics NAV saved us A$100,000 in wages and a further A$125,000 for the staff we would have needed to employ to manage the higher workload,” says Bugg.

Improved invoicingBarden has also saved significant amounts of time and money that used to be spent chasing up outstanding customer invoices.

“Invariably, supermarket accounts are inadvertently left unpaid,” says Bugg. “We need to chase them up by sending proof of delivery. On average about six per cent of invoices are overdue and it

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“If we can reduce labour costs by five per cent – which is our target – we believe we can save up to A$1 million. That’s massive.”

Allan Bugg, Business Manager, ICT, Business Systems, Risk & Fraud,

Barden Produce.

usually takes 30 to 45 days to reconcile them.

“With NAV it’s quick and easy to retrieve data from our archives. We’re looking to pare that average overdue invoice times to 14 days, which we estimate will deliver about A$30,000 to 40,000 a year in cashflow benefits.”

On the purchase side, Barden expects to save time reconciling grower accounts,

“We can instantly retrieve sales and purchase information because it’s automatically captured by the system,” says Bugg. “This means we only need to spend an hour each day chasing accounts and not five like we used to.

“With NAV, staff have a single point of reference and aren’t jumping between different systems. They have more confidence and are far less likely to make errors. We expect to see significant cost savings flow from that too.”

Projected A$1 million efficiency savingsBarden spends upward of A$20 million a year in wages. By changing over to Dynamics NAV, Barden can use the reporting and analysis tools to accurately track the labour costs of production.

“Previously we’d boost staffing to meet increased production needs but when those needs relaxed again, there was a lag in lowering staffing levels, which was

inefficient,” explains Bugg. “Better reporting will eliminate those lags and enable our production and operations managers to reduce staff quickly.

“If we can reduce labour costs by five per cent – which is our target – we believe we can save up to A$1 million. That’s massive.”

Increased insight, profitsLastly, Barden is looking to Dynamics NAV’s analysis and reporting functions to provide the business with greater visibility across its divisions.

“For the first time, we can accurately track the profit margins of different divisions. If areas of the business aren’t making money or profitability is down, with Microsoft Dynamics NAV we can get in and see what’s going on and work out quickly how to turn things around.”

Microsoft DynamicsMicrosoft Dynamics® is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics® works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about Hands-on Systems products and services, call +61 2 9922 6400 or visit the Web site at: www.handson.com.au

For more information about Barden Produce products and services, call +61 (2) 9764 4044 or visit the Web site at: www.bardenproduce.com.au

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published January 2010

Software and Services Microsoft Server Product Portfolio−Microsoft SQL Server 2008−Windows Web Server 2008 R2

Microsoft Office−Microsoft Office Word 2007

Products−Microsoft Dynamics NAV 2009

Windows−Microsoft Windows XP Professional−Windows 7

For More InformationFor more information about Microsoft Dynamics products and services, call 1800 197 960.

To access information using the World Wide Web, go to: www.microsoft.com/australia/dynamics

For more information about Hands-on Systems, call +61 2 9922 6400 or 1300 191 000 or visit the Web site at: www.handson.com.au

For more information about Barden Produce products and services, call +61 2 9764 4044 or visit the Web site at: www.bardenproduce.com.au/

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published October 2010

systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics® brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.  For more information about Microsoft Dynamics, go to:

http://www.microsoft.com/dynamics

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