Microsoft Dynamics Customer Solution Case Study

Energy Recovery Ventilation Manufacturer Boosts Order-Processing Efficiency by 85 Percent

Overview “With the production information linked with financials Country or Region: United States Industry: Manufacturing—Industrial and inventory in Microsoft Dynamics AX, we can easily equipment manufacturing track shipments and invoices against orders to speed Customer Profile up payment cycles and improve our cash position.” CES Group specializes in designing and Wade Tkachuk, Operations Manager, Venmar CES manufacturing engineer-to-order and configure-to-order air-conditioning and heat ventilation systems for commercial and residential use. Headquartered in Eden Prairie, Minnesota, the company A subsidiary of Rhode Island–based Nortek, CES Group oversees operations across the United comprises eight of the world’s largest makers of heating, States, Canada, and Europe. ventilation, and air-conditioning systems. After experiencing Business Situation considerable growth through acquisition, company leaders To trim operating costs and prepare the company for new growth opportunities, sought to standardize business processes across several company leaders sought to consolidate international locations. To achieve this, CES Group opted to CES Group’s global business activities on a single, comprehensive enterprise consolidate its global operations on Microsoft Dynamics AX. The resource planning system. company planned a phased deployment process, initially

Solution implementing the solution at two facilities of a Canadian CES Group selected Microsoft Dynamics subsidiary and integrating it with specialized industry solutions AX based on its ease of use and support for multiple production modes. CES from Microsoft Gold Certified Partner To-Increase. With this Group worked with Microsoft Gold solution in place, Venmar CES has improved supply chain Certified Partner To-Increase to implement Microsoft Dynamics AX at its control, accelerated order processing by up to 85 percent, and Venmar CES location and integrate the gained agility through access to consolidated reporting. solution with the To-Increase e-Con Sales and Product Configurator.

Benefits  Enhanced supply chain control  Increased order-processing efficiency by 85 percent  Improved agility through consolidated, on-demand reporting “In our previous Situation And, by that time, some of the data was Based in Eden Prairie, Minnesota, CES already obsolete.” manufacturing system, Group manages a network of eight of the world’s leading heating, ventilation, and In addition, the company experienced producing sales backlog air-conditioning equipment manufacturers. challenges with the configuration module reports took up to two The company, which employs in its manufacturing system. Because this approximately 5,000 people worldwide, has tool was not intuitive or easy to use, sales days. With Microsoft operations across the United States, personnel spent a considerable amount of Canada, Europe, and Asia. The group’s time creating customer quotes. Moreover, Dynamics AX, we can network of companies includes Venmar it was difficult to modify the configuration create a much more CES, which employs about 300 people and tool to align with changing product is headquartered in Saskatoon, specifications and pricing structures. detailed report in Saskatchewan, Canada. Leaders at Venmar CES consulted with CES minutes. We can use the Venmar CES, which specializes in both Group executives, establishing the basis for lead-time visibility to engineer-to-order and configure-to-order investment in a single, comprehensive energy recovery ventilation solutions, enterprise resource planning (ERP) system. scale our production maintains two locations. For more than 20 “We needed one common location for all years, these two facilities used different of our data so that we could eliminate capacity up or down, production systems. In addition, each redundant data entry, tighten our which gives us a huge organization had developed its own processes, and better steer the business supporting line-of-business and database through access to a single version of the advantage in our applications and maintained separate truth,” says Tkachuk. accounting and production databases. Both industry.” of the Venmar CES facilities used Microsoft Solution Wade Tkachuk, Operations Manager, Dynamics GP for financial management. Senior leaders at CES Group decided to Venmar CES move forward with a phased deployment of The use of several, nonintegrated systems a new ERP system across company lengthened the time needed to complete operations, beginning with Venmar CES. basic tasks, such as entering new customer CES Group selected Microsoft Dynamics AX information. “It took us up to 30 minutes to based on its strong, flexible support for set up a new customer because we had to diverse manufacturing models; ease of use enter the information in three different and integration with other Microsoft systems,” says Wade Tkachuk, Operations technologies; and the existence of a well- Manager at Venmar CES. articulated product road map.

Moreover, the absence of a single, Venmar CES engaged Microsoft Gold centralized repository for sales, accounting, Certified Partner To-Increase for help in and inventory data hampered visibility into deploying Industrial Equipment operations and made reporting extremely Manufacturing for Microsoft Dynamics AX difficult and time consuming. “We tracked alongside the To-Increase e-Con Sales and forecasting data, sales, and open orders in Product Configurator, a Certified for stand-alone spreadsheets,” says Tkachuk. Microsoft Dynamics solution. ”In addition “It would take one or two people most of to meeting a significant portion of our the day to generate consolidated requirements out of the box, we liked the performance reports because of all the fact that Microsoft worked closely with ISVs manual sorting and reconciliation involved. [independent software vendors] to layer additional, industry-specific capabilities on the information in multiple systems,” says top of the core functionality of Microsoft Tkachuk. “Now, we know exactly when to Dynamics AX,” says John Clayton, Project stock up on certain parts so that we can Manager for CES Group. avoid potential delays in production.”

Straightforward Data Migration Order Management To convert and migrate the data stored in The company uses Microsoft Dynamics AX its former manufacturing systems, the to standardize order management across company used Connectivity Studio from locations, accelerating the flow of To-Increase, a component of Industrial information throughout the sales life cycle Equipment Manufacturing for Microsoft —from customer quote to shipment. By Dynamics AX. Connectivity Studio and a linking sales orders, production bills of key component, Conversion Studio, materials, inventory, and billing in a single provided a complete set of capabilities for system, managers can instantly view the mapping migration paths and transforming status of any order and drill down to obtain and validating data, which helped the associated customer, product, and payment Venmar CES team complete the process by details. And, the company’s use of standard using its own IT resources. The team workflow tools in the system enhances transferred legacy data from each company visibility and control. For example, shop under the CES umbrella sequentially by floor managers rely on automated using the same steps and templates. After workflow and alerts to guide production having completed the initial data scheduling, receive and communicate migrations, the Venmar CES team still uses changes to orders, and ensure adherence To-Increase Connectivity Studio, as needed, to best practices. to upload data and project information from external and legacy systems efficiently Venmar CES uses Document Management into the database in Microsoft Dynamics Studio from To-Increase to ease sales order AX. management and other processes that call for Microsoft Office Word 2007 documents Supply Chain Visibility or Microsoft Office Excel 2007 spreadsheets Venmar CES has taken advantage of to include information from Microsoft multisite supply chain management Dynamics AX. Employees can create Office capabilities in Microsoft Dynamics AX to Word and Office Excel documents, optimize its purchasing process. The populate them with data from Microsoft company can quickly view and analyze Dynamics AX, and edit them in Word or purchase information spanning its entire Excel. supplier network and then use that intelligence to negotiate discounts with Product Configuration vendors. Venmar CES further streamlines order management through the seamless link In addition, operations managers use between the To-Increase e-Con Sales and consolidated inventory data to improve Product Configurator and Microsoft production planning and eliminate Dynamics AX. To improve productivity and overstock situations. “We can see the minimize the risk of data-entry error in inventory levels and availability of specific creating bills of materials and routes, the parts at each location, which is something company’s IT team built product and we could never do before when we tracked guided sales solutions with e-Con by using integrated business logic from the coordinated transaction processing and database in Microsoft Dynamics AX. The e- improved data analysis. “By running a Con Product and Sales configurator ensures single, real-time transaction-processing a choice or selection made by a Venmar system across our locations, we can CES sales representative is valid and follows synchronize our purchasing and the Venmar CES production standards. In manufacturing operations so that we can addition, sales representatives can quickly route materials to where they need immediately see the price and other to be to get orders completed in less time,” consequences of choices they make. says Clayton. “Because we’re able to draw on all of our product and pricing information and apply As the first CES company to deploy the business rules to the standard functionality solution, Venmar CES has benefitted from in e-Con, we’ve improved the speed and greater supply chain efficiency and tighter the accuracy of our order-entry process,” vendor management. In addition, the says Tkachuk. At the same time, e-Con lets company has streamlined its order-to-cash “With help from the e- Venmar CES respond quickly to product or cycle, boosting the efficiency of order and market changes. By using the e-Con studio, production subprocesses by up to 85 Con tool, we can get Venmar CES can make such changes and percent. implement them in everyday business quotes, orders, and bills processes within minutes. Enhanced Supply Chain Control of materials into the By managing all purchase orders, invoices, Consolidated Reporting and payments to suppliers in a single system in less time so The company uses both the built-in system, Venmar CES can better track its reporting templates in Microsoft Dynamics total procurement costs. Moreover, that jobs get to the AX and custom-generated reports through synchronizing the procurement function for production floor faster.” Microsoft SQL Server Reporting Services to its two locations has enabled the company track information spanning all areas of the to standardize its contract-purchasing Wade Tkachuk, Operations Manager, business. These reporting tools enable the process. With greater control over its Venmar CES company to evaluate consolidated data on supply chain, Venmar CES can reduce a range of business performance metrics, inventory levels without compromising such as days sales outstanding for open availability or on-time deliveries. “The orders and invoice aging across all of its ability to access all of our data in Microsoft supplier contracts. In addition, the Dynamics AX has given us the power to company relies on insights that it obtains make continuous improvements in our through summary and informal reports to supply chain and inventory management,” better manage its production process. For says Tkachuk. “With better supply chain example, the company uses backlog control, we can align our production more reports to spot spikes in sales orders to closely with demand so that we can scale ensure that it has the requisite materials in much more efficiently.” stock to meet demand. Increased Order-Processing Efficiency by Benefits Up to 85 Percent By standardizing its global operations on Venmar CES has taken advantage of the Microsoft Dynamics AX, CES Group expects flexibility and integration capabilities of to significantly reduce overhead and IT Microsoft Dynamics AX to optimize its maintenance costs while maximizing its order-to-cash cycle. By using the To- competitive advantage through Increase e-Con Sales and Product Configurator alongside Microsoft Dynamics Additional Resources AX, the company is now able to create bills Learn more about Microsoft Dynamics AX of materials and routes with greater for Industrial Equipment Manufacturing: accuracy and speed. With its former system, www.microsoft.com/dynamics/en/us/indust employees spent up to 35 minutes building ries/industrial-equipment.aspx product configurations. Now, this process takes five minutes or less. “With help from Find specialized industrial equipment the e-Con tool, we can get quotes, orders, manufacturing solutions for Microsoft and bills of materials into the system in less Dynamics AX: time so that jobs get to the production www.microsoft.com/dynamics/en/us/indust floor faster,” says Tkachuk. “With the ries/industrial-equipment-solutions.aspx production information linked with financials and inventory in Microsoft Dynamics AX, we can easily track shipments and invoices against orders to speed up payment cycles and improve our cash position.”

Improved Agility Through Consolidated, On-Demand Reporting By capitalizing on easy-to-use and flexible reporting tools, Venmar CES has better visibility into every aspect of its business, which helps managers focus on initiatives to boost efficiency and reduce cost. For example, with consolidated purchasing reports, the company has optimized its vendor contract management. As a result, Venmar CES has managed to shrink procurement costs by negotiating discounted pricing and more efficient delivery scheduling with key suppliers. In addition, production managers can now better prepare for short-term demand spikes by monitoring backlog reports. “In our previous manufacturing system, producing sales backlog reports took up to two days. With Microsoft Dynamics AX, we can create a much more detailed report in minutes,” says Tkachuk. “We can use the lead-time visibility to scale our production capacity up or down, which gives us a huge advantage in our industry.” For More Information You can read more about the e-Con Sales Microsoft Dynamics For more information about Microsoft and Product Configurator from To-Increase Microsoft Dynamics is a line of integrated, products and services, call the Microsoft that CES chose in the Microsoft Dynamics adaptable business management solutions Sales Information Center at (800) 426- Solution Finder. that enables you and your people to make 9400. In Canada, call the Microsoft business decisions with greater confidence. Canada Information Centre at (877) 568- About Certified for Microsoft Microsoft Dynamics works like familiar 2495. Customers in the United States and Dynamics Solutions Microsoft software such as Microsoft Office, Canada who are deaf or hard-of-hearing Microsoft set the bar high by developing which means less of a learning curve for can reach Microsoft text telephone the Certified for Microsoft Dynamics your people, so they can get up and (TTY/TDD) services at (800) 892-5234. accreditation for business solutions built on running quickly and focus on what’s most Outside the 50 United States and Microsoft Dynamics software by partners. It important. And because it is from Canada, please contact your local sets a small group of proven, tested, and Microsoft, it easily works with the Microsoft subsidiary. To access recommended business solutions apart systems that your company already has information using the World Wide Web, from thousands of other solutions that implemented. By automating and go to: have not met the rigorous requirements. streamlining financial, customer www.microsoft.com Solutions that are Certified for Microsoft relationship, and supply chain processes, Dynamics are: Microsoft Dynamics brings together For more information about CES Group  Designed to meet your unique people, processes, and technologies, products and services, call (952) 358- business and industry needs. increasing the productivity and 6600 or visit the Web site at:  Tested and seamlessly integrated with effectiveness of your business, and helping www.ces-group.com Microsoft Dynamics products. you drive business success.  Used and recommended by other For more information about To-Increase companies like yours. For more information about Microsoft products and services, call (419) 902- Dynamics, go to: 2828 or visit the Web site at: www.microsoft.com/dynamics www.to-increase.com

Software and Services Partners  Microsoft Dynamics  To-Increase − Microsoft Dynamics AX  Microsoft Office − Microsoft Office Excel 2007 − Microsoft Office Word 2007

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published April 2010