Laminex Group – shines with IBS solution
Company background
The Laminex Group is a leading marketer, distributor and manufacturer of premium decorative surfaces in Australia and New Zealand and has a portfolio of market leading brands. In addition, it is a manufacturer of raw wood panels in Australia, which are an important base product for its decorative surfaces.
Based in Victoria, The Laminex Group also supplies a range of associated products in Australia, including doors and vanity units, which complement its core product range and provide additional opportunities for growth.
The Laminex Group employs 2,000 people in Australia and generated sales of $359 million in 2002.
Business issues
The Laminex Group has an extensive national distribution network in Australia, with dedicated distribution centers and over 8,000 marketing and information display centers in independent outlets. In addition, the company has seven production facilities in Australia and one in New Zealand, all of which are structured to provide operational flexibility and efficiency.
The Laminex Group is unusual in the industry. It sells products directly to its customers, which include commercial construction companies and kitchen, bathroom and furniture manufacturers and do-it-yourself handymen.
During the past 66 years, The Laminex Group has grown from one small outlet to 40 distribution centers nationwide. The company supports 30,000 products, 30,000 customers and processes 3,500 invoices per day.
The Laminex Group was not integrated in terms of consistency of product and customer codes. Each of the company's outlets had its own database. Customers were often listed in two or more databases with credit limits at each outlet. There was no central control. In 1999, The Laminex Group acquired Formica, a rival decorative surfaces manufacturer, which resulted in the need for both company's systems to be integrated.
Problems to be solved with a new business system included 36 distributed databases, a high inventory level, duplicate customers, inconsistent use of product codes, a high number of credit notes and a tight deadline for installing the IT solution.
We have gone from a rather chaotic situation with 36 different databases at the same number of sales/warehouse outlets to one central system that gives us great visibility and full control.
Martin Brown
General Manager Information Services
The Laminex Group
Solution and capabilities
After an exhaustive review process involving representatives from various Laminex Group business units, IBS' supply chain management solution, IBS ENTERPRISE, was selected to undertake the task of overhauling the company's systems. The Laminex Group felt that it would be a very successful partnership and that IBS would be able to meet the company's extremely tight Time frames. The Laminex Group found that IBS was professional, concentrating on system features and functions.
IBS ENTERPRISE is ideally suited for consumer durables distributors. Modules for sales order management, distribution, procurement, inventory and warehouse management, Business Intelligence and Financials were chosen to optimize The Laminex Group's operations. To ensure fast, cost-efficient delivery of products, IBS has provided The Laminex Group with an integrated IT solution that automates and optimizes all its processes.
IBS ENTERPRISE is a great advance over The Laminex Group's previous decentralized system. It provides for increased customer service especially with delivery promise dates and shorter turnaround for customer orders. Moreover, it allows the warehouse to have the right stock in the right place in the right quantity at the right time.
IBS software has provided enhanced visibility and speed in The Laminex Group's supply chain. It allows for the transfer of stock between warehouses, optimizes forecasts and order/ manufacturing batches. This process not only improves customer service levels, but it also facilitates economical inventory holding costs.
The Laminex Group has implemented Distribution Requirements Planning (DRP) for distribution and DRP and resource planning for manufacturing. DRP is a tool for organizing replenishment throughout a network of warehouses and provides The Laminex Group with a proactive approach that eliminates the need for numerous reorder points.
Benefits and value
It used to take The Laminex Group an astonishing six to eight weeks to get a price increase through the distributed databases. Today the task is accomplished in just one to two weeks thanks to database integration.
Due to the consolidation of databases, the removal of pre-invoicing and use of pick confirmations, credit notes have been reduced from eleven percent to less than four percent of sales. IBS software has meant that the company's invoicing costs have been reduced by an amazing $262,000. Duplication in customer data has been eliminated resulting in enhanced customer service. Furthermore, The Laminex Group is able to better trace the buying pattern of its customers, allowing the company to stock the right products at each of its sales outlets to meet demand.
IBS ENTERPRISE has dramatically improved reporting, resulting in better central control of customers, products and demand pull-through for its manufacturing process.
By improving the visibility and the speed of The Laminex Group's supply chain, IBS software has enabled the company to reduce its stock levels by 17 percent – a massive saving of $11.5 million. Project ROI from inventory reduction savings alone, was achieved within 18 months.
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