Award Concepts was established in 1988, and from a small start
with just a few staff and a limited number of product lines they
have subsequently become one of New Zealand's leading importers and
wholesalers of hardware and tools. It counts amongst its customers
most of the leading DIY outlets in the country and represents over
3000 product lines.
As the company grew, its original business systems increasingly
showed their age. The database-orientated software system, which
had been specially written for them, was integrated with a
financial package; however frustrations were constantly arising
around the difficulties in obtaining reports and the lack of
visibility across the company.
Award Concepts installed Microsoft Dynamics AX as its core
business system back in 2004, and has continued to extend it
Annmaree Talbot, Financial Controller for Award Concepts was
involved from the start. "Moving to Dynamics AX has allowed the
company to manage itself better," she said. "It has helped us save
money because of the transparency it enables. For example, we're
able to buy exactly the amount of stock needed instead of tying up
capital in surplus stock which may sit around for a long time."
She explained that the addition of the Dynamics AX sales and
operations planning (S&OP) module in 2007 helped Award Concepts
maintain its financial health over the recession period.
"S&OP helped extensively with the business, including
ensuring that we were ordering product on time. The reports we
generate tell us precisely where we're at. With the downturn in the
market 18 months ago, if we didn't have the type of reports that we
have in the system, I believe we wouldn't have a handle on our
current trading position."
The addition of wireless warehousing to Microsoft Dynamics AX in
April 2009 impacted significantly on Award Concepts' ability to
compete and survive in the tough market.
"Koorb implemented wireless warehousing in April and, of course
in May the whole market just went crazy and dropped," said Talbot.
"Even though we'd only had it for one month at that stage, we
realised that this new technology meant we were able to look at
efficiencies in the warehouse. We were able to have a staff
reduction within two months, some of these being people not
replaced and in turn that brought the fixed costs down for the
business. Overall we had a 30% reduction of our warehouse staffing
level while at the same time streamlining and improving processes
and accuracy levels."
One positive aspect of the wireless warehousing for staff though
was unexpected. "The biggest surprise was the fork lift guys.
Previously they used to sit on a fork lift, go along with their
pieces of paper to decide 'where am I going to move the stock from
"I remember standing out there and explaining to them what was
going on the majority of their faces just lit up as they saw it as
a really good opportunity to advance their skills. Now they each
have laptops on their forklifts plus they've got scanners.
"They've embraced the technology and are using it quite
extensively and in turn they have made the warehouse so much more
efficient. Their attitude has improved both how we operate as a
company and how they view and value their own roles within the
company. It's been a win-win situation."
Award Concepts fill between 2,000-3,500 orders a month, which
could represent 25,000-40,000 product lines a month. Speed and
accuracy of picking and dispatching are priorities for the company,
especially factoring in the longer delivery times for the South
The implementation of wireless warehousing has seen Award
Concepts move from around 95% up to an impressive 99.98% stock
picking accuracy. This has meant a substantial reduction in
returned stock, double handling and the associated costs, as well
as reducing losses when stock has been inadvertently oversupplied
and not returned.
Award Concepts carry over two million dollars in stock
representing around 3,000 item codes and their business
depends on constantly supplying products to meet their customers'
prescribed shelf fill rate. Failure to do so can lose them that
business and subsequent income, and having a product removed from
one of their customers' shelves could in turn leave Award Concepts
with 10,000 units in transit and no final destination.
"It's really important that we are as accurate as possible. With
wireless warehousing I'm so confident in its accuracy that we no
longer carry out annual stock takes. We do rolling stock takes, so
the fork truck guys are doing them all the time, but we no longer
do the once-a-year big one and go through that nightmare time any
more. Previously it would take 4 or 5 days.
"We'd start on the Friday and we'd be working all Saturday, into
the night, Sunday morning, Sunday night and it still wouldn't be
right by Monday so we were holding up orders just to make sure the
count was accurate."
Award Concepts has now achieved 100% inventory accuracy through
the S&OP module in conjunction with wireless warehousing,
meaning a reduction in overall stock levels equating to several
hundred thousands of dollars being freed up.
This has been a substantial contributor to easing cash flow and
enabling Award Concept to weather the recession.
With wireless warehousing, the inwards goods process has also
seen significant improvement. Unloading goods from containers is
now speedier, as is entering products into inventory. The contents
of containers can be split and prioritised to enable backordered or
urgent stock can be processed more quickly and despatched to
Having reduced staffing levels, improved picking and inventory
accuracy, next on the horizon is the use of EDI to receive and
handle orders directly from customers into Dynamics AX.
This will eliminate manual keying of orders into AX, removing
the potential for human error and speeding up the ordering and
dispatch process even further. The use of EDI will also instantly
notify customers if a product is out of stock or no longer
The bottom line
Talbot admits to being surprised and impressed by the ROI that
Award Concepts experienced. "I remember sitting in a meeting with
Koorb Consulting and they said the payback will be in 18 months. At
the time I took that with a grain of salt, being aware of the
thousands of dollars we were investing in the project plus all the
time committed to it internally that you can't even put a dollar
figure on. But we got to payback within nine months, and we're
still saving as time goes on.
"We budget for certain costs in the warehouse and I can
guarantee when we're under budget in some areas it's because of the
efficiency of the wireless warehousing. It's been great to see our
investment working for us. In fact, the owner of the company said
he didn't know why we didn't do it from day one."
||Industry: Import and distribution
||Project Type: ERP Implementation
|Customer Size: 35
MS Dynamics AX
MS Windows Server 2003 R2
MS SQL Server 2000
RF-Smart from Sato
Financials, Fixed Assets, Sales & operations
Enterprise Resource Planning, Financial Reporting, Business
analysis, Wireless warehousing
30% reduction in warehousing staff
99.8% picking accuracy
100% inventory accuracy
6 month payback (ROI)
Reduction in returned stock
Faster loading of goods from containers
Able to weather recession storm