EOH, SYSPRO turn up heat at Daikin

EOH Logistics, a division of Impact Africa (an EOH company), has proven it isn't just blowing hot air when it comes to solutions that work. The team recently put a mammoth logistics outsourcing project to bed with Daikin Air Conditioning South Africa (Daikin SA), in which SYSPRO Enterprise Resource Planning (ERP) 6.0 software was core to revolutionising the way the company warehouses and distributes its products.

Theuns Pretorius, EOH senior consultant, takes us through the intricacies of this formidable project, which he headed up in partnership with Greet Timmerman, Daikin sales and supply planning manager.

Daikin Europe NV, to which Daikin SA is affiliated, had requested that the company outsource all its logistics functions, including freight forwarding, customs clearing, warehousing and distribution. EOH's logistics team was approached and Pretorius says the initial thinking was that Daikin SA would be well served by a warehouse management system. On closer investigation, however, it became clear that in-depth supply chain consultancy and systems changes would be needed.

At the time, Daikin SA had 11 warehouse facilities across the country, three of which were in-house and the remainder outsourced. Internally, the company operates off the SYSPRO ERP system. The outsourced warehouses were managed on separate systems, which led to gross inaccuracies in stock levels and availability. Stock inefficiencies were also unacceptable to management. Much of the problem was that the delivering and releasing of stock was paper-based and, therefore, inefficiencies occurred in the allocation and control of invoices.

“When EOH became involved, the lease of the Cape Town offices and warehouse was about to expire and we effectively had six months to find a solution to completely transforming Daikin SA's business systems,” Pretorius says. “EOH and Daikin began the process of tendering to top distribution companies and UTi emerged as the preferred supplier.”

A location in City Deep, Johannesburg, was identified as the site for the new Daikin SA warehouse, which would now house stock from the 11 existing facilities. To give an idea of the enormity of this project, Pretorius explains that 121 super-linked trucks were used to transport stock to the new warehouse over a period of just seven days.

The drastic changes called for a total revamp of the company's SYSPRO ERP system. Complete systems automation and integration was undertaken, which provided visibility into all the company's process, from inbound invoices, warehouse goods receiving and in-transit tracking, to proof of deliveries and automatic invoicing. Automated stock reconciliation and management reporting functionalities were also created.

Daily sales, inventory, movement, and outstanding order information relating to Daikin Europe NV was integrated through the GAIN data warehouse system. Systems integration was fine-tuned to improve accurate delivery times for all orders captured.

Now, upon entering the order, the user and the client will know exactly when a delivery will take place, based on the logistic supplier's delivery capabilities. Dozens of new business processes were also designed, including procedures for damaged and returned goods, stock allocation and reserves, stock accuracy maintenance, on-ship calculations, forecasting, distribution planning, and delivery performance continuous improvement.

“Daikin SA is today a true electronic beast,” Timmerman concludes. “As they now know exactly what they have, what they are going to get, where they have it, and when the client will receive it, the company can confidently go about its core business - supplying top-class air conditioning equipment to the southern African market.”

This is confirmed by Paul Meinking, MD of Daikin SA. “Through the consolidation of our warehouses into one centralised warehouse and the integration of the complete supply chain management system, we have been able to more effectively control the distribution of the product, allowing us to prioritise our focus in meeting the strategic needs of our company.”