A premier supply chain provider of Automotive Aftermarket and Industrial Supplies in Thailand, Borneo Technical, a member of Toyota Tsusho Group, faced a growing list of stock-keeping units and customers. The company struggled with a legacy ERP system that was costly to maintain and had many technical limitations.
To ensure sustainable growth, the company selected Microsoft Dynamics AX as its solution for streamlining supply chain processes, thereby enabling the company to focus on achieving its goal of doubling sales every three years with no increase in working capital to sales ratio and triple profits.
With a history dating back to 1856, Borneo was the first foreign company to operate in Thailand, positioning itself as a trading company. In recent years, Borneo Technical (Thailand) has transformed its business model to being customer-centric by specializing in the automotive aftermarket and industrial supplies sectors.
“The markets for automotive aftermarket and industrial supplies are scalable and still growing,” says Wasan Tanmanuraxkul, Managing Director, Borneo Technical (Thailand) Ltd. However, the challenges at this point are to capture market opportunities and grow the businesses, he says. “The market is very fragmented.”
It is for this reason that Borneo Technical has established its ‘2-0-3’ plan, with a vision to double the company’s sales every three years with zero percentage increase in working capital ratio and triple profits. “Our core strategy is to widen our capability, penetrate the mass market and open new customer channels in order to build up business scale,” says Tanmanuraxkul.
In the aim of becoming more customer-focused, Borneo Technical has revamped its business process to have better visibility across the supply chain. This ensures timely delivery of goods to a mass number of retailers, installers and end-users. To provide competitive services in the mass market, Borneo Technical has established eight branches with regional warehouses nationwide to ensure faster delivery of services.
A key challenge here is managing the growing customer base and the increasing number of items in its inventory. “At this moment, we have about 8,000 stock-keeping units (SKUs) and 18,000 customers,” says Tanmanuraxkul.
The company’s business systems were no longer able to catch up with its increasing needs. For enterprise resource planning (ERP), Borneo Technical previously utilised Mapics based on HP-UX, a legacy product that had reached its end-of-life. Furthermore, sales personnel had to fill up paper forms and manually processed these orders. “It was old technology, limited in terms of storage and capability. It was also no longer supported,” says Tanmanuraxkul. “Because of our growing needs, it was already costly to maintain.”
Borneo Technical decided to modernize its existing ERP system. “We needed a system that is flexible, reliable and competitive, which would allow Borneo Technical to expand aggressively to achieve our ‘2-0-3’ vision,” says Tanmanuraxkul.
Flexibility and Cost-Effectiveness
Bhatara Progress Co. Ltd. was aware of the challenges that Borneo Technical faced, and the two companies collaborated on building a Sales and Marketing platform with Microsoft Dynamics AX. Development with Bhatara Progress took 10 months, which included preparations and planning for migration, and even taking into account two-month work stoppages brought about by the massive flooding in Thailand in November 2011. By May 2012, Borneo Technical fully migrated both its headquarters and eight branch offices to its on-premises Dynamics AX.
Borneo Technical’s business process drastically improved with Dynamics AX. “In the old days, our sales personnel visited customers, offering products/programs, and then manually wrote down the orders on paper forms,” says Tanmanuraxkul. “They would then have to fax the sales forms back to the head office for processing, where the data was encoded into the system.”
A Mobile-Oriented Approach
“With Dynamics AX, we developed a mobile system for handling sales processing while on the move. Sales personnel can now access product information, stock availability, accounting and customer information anytime, anywhere from their mobile devices,” says Tanmanuraxkul. With Borneo Technical’s implementation of Dynamics AX, the entire process of selling, accounting for sales and SKU tracking is now achievable in real-time.
“Bhatara developed 16 custom programs to fit Dynamics AX into our business process. They also provided on-site training and support sessions, including consultation by telephone and remote access.”
Borneo Technical aims to follow through on its ‘2-0-3’ plan by growing the business through improved time-to-market, but without increasing its working capital ratio. The company benefits from “better speed, availability and integrity of information retrieved and gathered for business planning and decision-making through database and reporting systems in Dynamics AX,” says Tanmanuraxkul. Sales representatives are empowered to digitally input their sales entry via their own Mobile Sales devices, track availability of items and process the order to ensure next day delivery, as the company now promises.
Sales personnel have to cover mass customer base across Thailand, and Dynamics AX provides better tracking of demand and availability of supply. “We use the document attachment function to store customer maps, reference purchase orders, and transaction approvals. The documents can be verified and checked online without the need to print.”
Sales process efficiency
“With the previous system, there was a lack of visibility with regard to the time gap between the point the customer placed an order and when we received the sales order.” With sales personnel’s mobile access to Dynamics AX, sales are now processed in real-time. This has increased the success rate of the company’s next-day-delivery promise for products and supplies from 40 percent to 70 percent.
Tighter financial controls
The company’s accounting system is now more efficient. “Financial reports can be done promptly, and it does not require us to wait for month-end processing as with the previous system,” says Tanmanuraxkul. In addition, Dynamics AX provides Borneo Technical the assurance that client accounts are processed in real-time.
Operational efficiency through advanced automation
Borneo Technical’s previous system required sales personnel to record and process sales entries manually. Dynamics AX has enabled the company to remove its dependency from paper-based accounting and processes. Sales personnel now have instant access to the ERP system through their mobile devices 24/7, and can process orders right from the mobile application.
Modernised ERP system reduces IT costs
Being a legacy system, HP-UX’s Mapics is no longer supported, and Borneo Technical faced high costs whenever it needed something fixed or modified. The company has therefore treated its migration to Dynamics AX as a necessary investment rather than a cost, as the new system “eliminates the business risks from running a legacy application that no longer gets adequate support from any vendor.”
Ease of use
“The beauty of Dynamics AX is that it’s user-friendly,” says Tanmanuraxkul. “Our company extensively uses Microsoft products, as well, and Dynamics AX conveniently lets us share information through other Microsoft applications as well, including our email system.”
To further bolster its growth plans, Borneo Technical is planning to expand its usage of Dynamics AX for warehouse management and customer relationship management modules. “Dynamics AX provides us with the platforms to support quantum leaps in business growth and eliminate business risks from outdated business systems.”
Customer Story – Shared via Microsoft