ABE’S Real Bagels started life as a small Auckland café that diversified into making fresh bagels and now bagel crisps. But its rapid metamorphosis into a wholesale manufacturer – and now exporter – had badly strained its small-scale custom ERP and accounting systems.

In 1996, New Zealanders Megan Sargent and Brent Milburn brought back the secret to successful bagel-making from Chicago.

The pair thought Kiwis would love the taste of real Chicago-style bagels, so they started a café in Auckland’s Swanson Street. This quickly grew into a major wholesale manufacturing business, employing 45 full-time staff, with annual revenues of between $5 million and $10 million.

Recently, the company started making a new product – bagel crisps. As well as this, it has started supplying Australia and has won a contract to supply over 800 Woolworths supermarkets.

With all this growth and expansion – accounting for 30-40 percent growth a year – the company’s systems were feeling the strain and it urgently needed a new ERP system.

Its custom-built legacy system employed Microsoft Access for production management and Intuit Quickbooks for accounting. But now the company needed greater functionality and flexibility from its ERP system, as well as a streamlined and scalable solution that could manage both production and finances.

A lack of integration between the two legacy systems meant ABE’S existing accounting system had to be updated monthly, with information taken from a manual stock-take. This resulted in a lack of visibility into stock levels and costs throughout the month.

“We couldn’t do some of the stock analysis we wanted to do with the old system. We had to actually go and look to see how much flour we were consuming each month, which meant we had to have standing rather than flexible orders,” explains director Brent Milburn.

“We really needed a system with real-time stock visibility and forecasting tools to better manage production schedules, to meet customer demand and improve our service.”

Expansion into Australia brought another challenge – the need to work in multiple currencies, which ABE’S legacy system couldn’t do. Expanding into bagel crisps also meant more complex planning and production cycles.

“We’d literally outgrown the system we had and we wanted a platform that would be able to grow with us. We knew we were going to require even more functionality from our system in the very near future, so a patch-up job just wasn’t an option,” says Milburn.

New system baked just right
ABE’S looked at several ERP systems before opting for Microsoft Dynamics AX. “We chose it for its superior flexibility, scalability and manufacturing capabilities, and because it would integrate seamlessly with existing systems,” explains Milburn. “Microsoft’s financing deal was the icing on the cake.”

“The financing rate was very reasonable and being able to finance the investment in software implementation against future earnings was a huge advantage for us,” says Milburn.

Local Microsoft partner Koorb Consulting helped ABE’S implement Dynamics AX.

“We were impressed from the start with the obvious depth of understanding Koorb had of our industry,” says Milburn.

“They stepped forward with a large pool of experienced consultants and developers, specific expertise in FMCG manufacturing, and a large number of current Dynamics AX sites. And, very importantly, they had strong site references. It was obvious partnering with them would be a low risk option.”

Koorb consultant Tim Schofield says there were several factors that made Dynamics AX the perfect fit.

“Dynamics AX is ideal for the small manufacturing environment. The system fitted ABE’S like a glove. It supported all aspects of its business processes, from trade and logistics to capacity planning to warehouse management, as well as integrating requirements for improved financial management,” says Schofield.

“Although ABE’S is a relatively small company in terms of head count, it’s actually a large company when you look at the number of orders it’s processing and the number of transactions it’s keying – a package that had a lot of functionality, but had the ability to scale to high transaction volumes, was needed.”

Rising to the challenge
Koorb began implementing Dynamics AX at the end of 2007. The system went live on schedule and on budget in early April 2008 – just in time to provide the multi-currency functionality the company needed for its entry into the Australian market.

Dynamics AX had almost everything ABE’S needed right out of the box. It had the added bonus of a look and feel that was familiar to the company’s staff, who were accustomed to using other Microsoft products.

It also integrated easily with ABE’S existing systems, with the aid of the Application Integration Framework (AIF) module. Using this, Koorb integrated the existing planning system – which was used to designate van delivery routes and take delivery orders – with Dynamics AX.

But it wasn’t just that Dynamics AX was the best technical solution for ABE’S, Microsoft Financing helped make the implementation possible.

With this financing help, ABE’S has been able to deploy its flexible new ERP system when it needed it most, rather than waiting. This has allowed the company to capitalise on growth opportunities quickly, as well as enabling it to better manage production and accounting processes.

“Being able to finance it against future earnings was a definite advantage and made a real difference to us,” says Milburn.

“Growing businesses are quite money intensive, requiring all their earnings and more to be inputted into capital, for machinery and working capital. So, being able to finance this was a big plus.”

For more information

Koorb Consulting
www.koorb.co.nz

Nicholas Birch
nbirch@koorb.co.nz
Ph 09 361 1304

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