Investing in an enterprise resource planning (ERP) system can be intimidating for a small company, but that didn't stop custom paper designer Envelopments from jumping in with both feet about two years ago.
Intrigued by a news article it read about an upcoming SAP business management application offered in the cloud, the company's executive team contacted the developer to try out the software. While it didn't wind up using that solution, the 20-year old company did decide to implement SAP BusinessOne, which it now uses on-premises to manage its back-office operations including inventory, accounting, finance and manufacturing.
"We disassembled the business, looked at our process flows and then rebuilt it conceptually," said Mark Smith, co-founder and president of Envelopments, based in Santa Ana, Calif.
Envelopments is a custom manufacturer of paper presentations and communiques with about 40 full-time employees, offering a pallette of more than 250 stocks and more than 100 different shapes and sizes. Supporting that many different options is a challenge: one that used to require a whole lot more warehouse space when the company was relying primarily on order processes managed with faxes, Smith said.
One of the biggest benefits that the company has seen after its move to SAP BusinessOne is a 40 percent reduction in its inventory requirements.
Prior to the deployment, between 80 percent and 90 percent of its warehouse space was dedicated to storing stock so orders could be filled more quickly. But with BusinessOne, the company has freed up at least 40 percent of that space, allowing it to invest in additional on-demand production equipment, said Tom Johns, vice president of business development and operations with Envelopments.
As a result, at least half of its orders can now be completed within eight hours and about 80 percent of its orders ship on the same day or on the next day. "Our customers have gotten better service along the way, and we have reduced the cost of goods sold," Johns said. "We have been able to do a lot more under this roof without adding staff."
According to a case study published by SAP, other benefits included a 50 percent reduction in customer service overhead, and more timely updates related to Web orders.
Envelopments teamed up with SAP partner Vision33 to plan and develop the solution. That relationship is ongoing, as the company further redefines its business processes, said Carl Lewis, general manager for the Irvine, Calif.-based VAR. "There are still new projects that they are dreaming up, focused on the question, 'How do we continue to leverage this investment?' " Lewis said.
Vision33, an SAP Gold-level partner, has more than 500 customers throughout the United States. It recently received SAP's top 2013 channel partner award for BusinessOne solutions in North America.