Crowe Metals Industry Accelerator Microsoft Dynamics AX AX Briefing Paper_lo.pdf · Crowe Metals Industry Accelerator For Microsoft Dynamics® AX A Long-awaited Industry Solution

Crowe Metals Industry Accelerator For Microsoft Dynamics® AXA Long-awaited Industry Solution

The Unique Alternative to the Big Four®Audit | Tax | Advisory | Risk | Performance

For years, metals industry manufacturers have resigned themselves to enterprise resource planning (ERP) solutions that were less than satisfactory. Prevailing opinion in the industry held that the most popular, widely supported ERP platforms were not capable of providing the industry-specific functionality they required. On the other hand, specialty ERP platforms designed specifically for metals applications were often poorly supported and incapable of interfacing smoothly – or at all – with other business systems.

Today, however, a new ERP solution offers companies

of all sizes within the metals industry the opportunity to

dramatically enhance the way they manage their resources

and business processes. This solution leverages the

proven and established Microsoft Dynamics AX platform

to provide an industry-attuned and deeply supported

solution specifically designed to meet the needs of all

types of businesses within the metals industry including

producers, processors, fabricators, and service centers.

3www.crowehorwath.com

At Last: Advanced, Widely Supported ERP Specifically Designed for the Metals Industry

Faced with these alternatives, most metals industry businesses have been unable to take full advantage of the benefits that advanced ERP systems were delivering to other industries.

Recently, however, that situation has changed, with the introduction of a comprehensive system that addresses both the manufacturing and business operations of metals industry businesses. The new solution is a flexible, readily scalable ERP system that delivers full support for metals manufacturers’ unique needs, while also integrating fully with other management and reporting systems.

A successful and profitable metals business must employ precise measurement, comprehensive tracking, and extensive communication at every stage in the process. Substantial gains can be achieved in the industry with a robust ERP that can:

� Improve visibility of the entire process, from acquiring to testing and certifying raw materials, and on through the treating, fabricating, shipping, and billing;

� Be customized to meet each organization’s unique needs;

� Provide real-time supply chain visibility including supplier status, inventory, and work in process, and integrate this data with the rest of the manufacturing process;

� Offer management insight to enhance operations, sales, and profitability; and

� Interface seamlessly with other business systems and platforms.

In the past, metals manufacturers who sought to implement such solutions were generally forced to choose from three less-than-ideal alternatives:

1. They could rely on generic ERP applications that tried – but commonly failed – to balance general business ERP approaches with the specific process requirements of their industry.

2. They could incur significant internal costs and risks in an attempt to develop an ERP application with tools tailored to their specific processes.

3. They could adopt specialty ERP solutions that were designed specifically for the metals industry, but did not integrate with other business management and reporting systems, nor offer the flexibility, growth capabilities, and in-depth support of the more widely used ERP platforms.

Crowe® Metals Industry Accelerator For Microsoft Dynamics AX A Long-awaited Industry Solution

4

Crowe Horwath LLP

Metals Industry ERP ChallengesHistorically, metals manufacturers have found generic ERP solutions to be inadequate for their needs, as the solutions failed to address the many complexities intrinsic to the industry. In metals manufacturing, batch-to-batch production variables are virtually impossible to eliminate and customer specifications are often unique to one-time orders.

In addition, production typically operates on razor-thin margins of tolerance, with carefully controlled sequences and quality checks that must be continuously fine-tuned to exact specifications. An ERP solution for the metals industry must also be capable of tracking physical and chemical characteristics of metal – including serial, heat, grade, class, gauge, width, length, and other dimensions – while also offering supply chain level tracking by heat and lot.

This demands an extraordinary level of technical precision, which must be achieved in an environment that places maximum emphasis on cost containment, supply chain management, and business systems efficiency, as well as the ever-present need to minimize scrap, control freight costs, and anticipate price fluctuations. At the same time, current trends such as just-in-time inventory

management, lean manufacturing, and Kanban systems are also being adopted in the metals industry, adding a new layer of requirements to any ERP solution.

Moreover, like all manufacturers, metals manufacturers must meet common challenges such as the need for efficient inventory management across multiple sites, integrated reporting across divisions, and regulatory and compliance issues such as Sarbanes-Oxley, and ISO/TS 16949 requirements.

In recent years, this already complex picture has been further complicated by broader industry trends. A substantial

drop in U.S. domestic production capacity utilization has increased interest in merger and acquisition activity and led to industry consolidation, with continuing vertical integration as the lines between suppliers, processors, and buyers become increasingly blurred. This means that, to remain effective, an ERP solution for the metals industry must also offer unprecedented flexibility, along with the capability to adapt and upgrade quickly in response to rapidly changing market conditions.


The Solution: Crowe Metals Industry Accelerator for Microsoft Dynamics AX Recognizing the need for a comprehensive system that could address both the manufacturing and business operations of metals industry businesses, Crowe Horwath LLP has developed an industry-specific ERP solution based on the proven and popular Microsoft Dynamics AX platform. This widely recognized and broadly supported ERP offering is enhanced by the proprietary Crowe Metals Industry Accelerator.

The resulting solution is preconfigured specifically for metals industry function-ality. In broadest terms, it captures and validates customer specifications, translates that data into detailed manufacturing procedures, generates requirements for raw materials, creates achievable production schedules, tracks batch or heat production, and provides comprehensive business analytics.

By harnessing the standard capabilities of Microsoft Dynamics AX, Crowe helps manufacturers move toward five key requirements:

1. Linking order specifications to processes. Microsoft Dynamics AX with the Crowe Metals Industry Accelerator helps translate customer specifications into detailed manufacturing processes. This enables manufacturers to generate requirements for raw materials and manufacturing resources, and to produce achievable production schedules and promise dates immediately at the point of order entry.

2. Gaining efficiency in multidimensional inventory. Microsoft Dynamics AX enables manufacturers to assign single stock-keeping units (SKUs) to cover multiple variations of shape (slab, billet, and coil) and attribute (width, length, gauge, grade, ID, and OD), for the same product type or chemistry. This makes possible further efficiency gains in managing costs, prices, inventory, orders, and production plans.

3. Integrating quality management. In addition to communicating customer quality requirements to manufacturing and fulfillment teams, Microsoft Dynamics AX can also help capture real-time test results, maintain acceptable quality levels, and automatically generate certification documentation.

4. Improving yield planning and tracking. Microsoft Dynamics AX with the Crowe Metals Industry Accelerator can automatically flag out-of-tolerance material to help ensure prompt corrective actions can be taken. It also enables manufacturers to take into account commodity price volatility as they anticipate the yield of each material and process.

5. Managing mixed-mode operations. Our expertise enables manufacturers to better manage material and production resources in all types of metals industry operations including integrated mills, mini-mills, service centers, and rolling or drawing mills. It also accommodates both made-to-order and made-to-inventory processes.

Moreover, because Microsoft Dynamics AX is fully integrated with other Microsoft® products, a company’s employees, partners, and customers will find themselves using familiar tools to work, communicate, track, and share information.

A 2009 Gartner Research study evaluated ERP offerings specifically tailored for product-centric midmarket companies. Of the 13 systems evaluated, the only one Gartner rated as a leader in the category was the Microsoft Dynamics AX platform

on which this solution is based.1

“… Gartner concludes that only one offering qualifies as a leader in the market at this time: Microsoft Dynamics AX. The product is robust, it delivers low (total cost of ownership) through integration with other Microsoft products, and, most importantly for the midmarket, Microsoft is adept at managing its channel of resellers.”– Gartner Research, 20092

Crowe Metals Industry Accelerator For Microsoft Dynamics AX A Long-awaited Industry Solution

6

Crowe Horwath LLP

In the early days of ERP software, some metals manufacturers opted to build their own information systems, since typical software packages were unable to accommodate the unique nature of metals production, processing, and fabrication. For medium-size companies, this imposed significant demands on

already-strained resources, not to mention sizable cost and risk as the manufacturer assumed all of the expense and effort of developing and maintaining the software.

These systems often consisted of disconnected software applications requiring multiple data entry inputs, and relied on spreadsheets and other basic tools that provide little or no real-time visibility to inventory or production issues. Moreover, in today’s increasingly interrelated manufacturing environments,

such legacy systems often lack the critical capability to interface with other business functions and management systems.

Until recently, the alternatives to these limited – and costly – homegrown systems, were also found to be inadequate:

� Generic, industry-neutral ERP systems are typically difficult to adapt to the specific workflow and business process of some companies. All too often, their off-the-shelf functionality does not meet the unique business requirements of a metals manufacturer. The company is faced with two unappealing choices: significant customization – which often equates to reinventing the wheel – or actually re-engineering its business processes to fit the “solution.”

� Specialty or “niche” solutions specifically designed for the metals industry pose their own shortcomings, in particular inconsistent vendor support due to limited resources, and potential doubts about scalability or upgrade capabilities for responding to company growth, mergers, or other future developments that affect ERP activities. Above all, like the legacy systems they are intended to replace, the technology platforms often do not interface with other systems and software applications.

Unlike generic alternatives, the Crowe Metals Industry Accelerator for Microsoft Dynamics is a fully customized ERP solution for the metals industry. And, unlike specialty solutions, it includes applications for financial management, customer relationship management, supply chain management, human resource management, project management, and analytics.

In addition, of course, the solution is supported by the unrivaled technological and R&D capabilities of Microsoft Corp., helping to ensure that it will remain a viable, industry-leading solution regardless of future market or company development.

An Effective Alternative to Generic, Niche, and Legacy Systems


Seamless and Precisely TailoredAs a Microsoft Gold Certified Partner, Crowe works with clients to precisely tailor Microsoft Dynamics AX to each individual business’s unique processes and requirements. The result is a powerful ERP solution that offers broad functionality while delivering low total cost of ownership. The solution:

� Expedites account consolidation across subsidiaries and distribution centers, regardless of location. Employees have ready access to detailed accounting, reporting, and analytic data as needed.

� Is fully customizable, capable of supporting high transaction rates and thousands of users across multiple sites.

� Features built-in languages, currencies, and legal requirements for more than 30 countries.

� Integrates with widely familiar Microsoft products – such as Microsoft SQL Server®, BizTalk® Server, Exchange, Office, and Windows – so employees work with the tools they are already familiar with, which helps to reduce training costs.

� Is scalable as the company grows. Businesses can begin with the functions they need immediately, and unlock additional capabilities as needs change and multiply, without disruptive and costly revamping of the ERP solution.

� Utilizes the Microsoft Dynamics AX platform to help enable competitive cost structure, reduce implementation risks, and deliver predictable timelines.

� Offers broad functionality that supports build-to-order, engineer-to-order, and build-to-forecast supply chain models, across both discrete and batch process manufacturing modes.

� Provides a flexible, multimode manufacturing solution that supports rapid integration of new acquisitions, as well as growth or diversification into new products and services.

The Crowe Metals Industry Accelerator works seamlessly with the Microsoft Dynamics AX platform, as well as with another complementary solution, Process Industries for Microsoft Dynamics AX. Although the Process Industries module offers a number of out-of-the-box functionalities for continuous

manufacturers, it is not designed specifically for the metals industry, nor is it required for a successful implementation of the Crowe Metals Industry Accelerator. The choice is made based on each individual business’s unique processes and requirements.

In either scenario – with or without the Process Industries module – Microsoft Dynamics AX with the Crowe Metals Industry Accelerator provides a powerful, flexible, and scalable ERP solution that offers broad functionality with low total cost of ownership.

“Dynamics AX offers high flexibility for adapting to process changes and enhancements.”– Gartner Research, 20093


8

Crowe Horwath LLP

A Closer Look at the SolutionMost manufacturing companies build an end product using components from a bill of materials. Metals companies do the opposite: They take metal (in the form of ingots, coils, slabs, blooms, billets, plates, etc.) and break it down into multiple products via slitting, stamping, and other processing methods.

Recognizing this unique metals industry differentiator, Microsoft Dynamics AX is capable of tracking and managing inventory by serial or tag number, with weight, heat properties, dimensions, and other attributes that can differ by lot.

The solution also accommodates weight variances, with tolerances defined by vendor, customer, or item to help ensure quantities received and shipped are acceptable.

Because quality management is critical, the Crowe Metals Industry Accelerator was designed to be capable of automatically triggering quantitative and qualitative testing at any point in the production process, with minimum and maximum tolerances defined for each test.

Since material must be traceable from original heat to end product, the solution can also automatically print material test reports with detailed chemistry test results for customers.

Freight management is also important to metals companies due to the size and weight of material. Efficient scheduling of carriers, optimizing truck capacity, and minimizing shipping mistakes can have a huge effect on both profitability and customer service. Microsoft Dynamics AX supports effective freight management that is fully integrated with the manufacturing process.

Inventory management by attribute provides greater visibility to on-hand quantities at every status: reserved, ordered, picked, or available.

Integrated production and quality reporting captures results and identifies out-of-tolerance issues in real time.


Other industry-specific capabilities include:

� Sales order customer specification management;

� Scrap and freight management;

� Accommodation of both buy-sell and toll-processing sales;

� Pricing updates to reflect market fluctuations;

� Integrated subcontracting capabilities;

� Combined production and quality reporting by operation;

� Support for slitting and other “one-to-many” production processes;

� Unit-of-measure conversions;

� Integrated production of travelers, coil ID tags, and shipping labels;

� Complete compliance and traceability for certified material requirements; and

� Integrated regulatory support including Sarbanes-Oxley for SEC registrants.

Material Test Report

Description .............................Grade/Class GR410 HSLAGauge & Width ....................... .046 48.00 Material test report .................MTR0000002Quality order...........................QUA0000003Production..............................PRD_000001

Mechanical Properties (ASTM A370)

Tensile Properties

Tensile Strength 0.2% Yield Strength % Bong (2”) %RDA

Hardness

(MR) (Surf)

65.000 65.000 RA1

Serial number......................... 500000Heat # ..................................... .h100 Sales order .............................SO-10000000Name......................................Customer requisition ..............PO# 123-456

LaCie Chemistry Analysis (ASTM A23)

C Ni P S SI Ci Nl Cr No V Al N Cb Tl 8 Si As Sb Pb Co

0.111 0.222 0.333 0.444 0.555 0.666 0.777 0.888 0.999 0.994 0.997 0.996 0.995 0.993 0.998

Product Check Analysis (ASTM A23)

C Ni P S SI Ci Nl Cr No V Al N Cb Tl 8 Si As Sb Pb Co

0.101 0.202 0.303 0.404 0.505 0.606 0.707 0.808 0.909 0.404 0.707 0.606 0.505 0.303 0.808

Chemistry results can be quickly recorded and automatically printed for internal and external reporting.

Industry-tailored documentation consolidates sales, production, and quality requirements enabling seamless transitions and reducing errors.


10

Crowe Horwath LLP

Implementation: a Proven ApproachRegardless of its built-in capabilities, an ERP solution is only as good as its implementation. The Microsoft specialists from Crowe have extensive experience in implementing Microsoft Dynamics AX, including the Crowe Metals Industry Accelerator, employing a proven, phased approach.

AssessmentCrowe specialists work collaboratively with the client team to review business requirements and current system usage to identify ways that Microsoft Dynamics AX can better meet the business’s needs – both immediately and in the future. This formal assessment analyzes systems to determine how best to support the company’s manufacturing processes, supply/delivery chains, and market strategies, and culminates in a detailed presentation of findings and recom-mendations including related costs.

ImmersionCrowe offers organizations on the threshold of a substantial ERP investment the opportunity to “try before they buy” with its Microsoft Dynamics AX immersion service. For a fraction of the ERP investment under consideration, Crowe will install its own Microsoft Dynamics AX software on the company’s hardware and work side-by-side with the company to pilot its top five ERP functional needs.

This enables the company to assess how well the Microsoft Dynamics AX platform fits its requirements, and enables a more confident decision to proceed. Equally important, it enables all stakeholders to

better anticipate organization-specific issues that may be involved in the ultimate rollout, while also making it possible to construct a more realistic project timeline and identify key implementation milestones.

Implementation Crowe specializes in customized implementations of Microsoft Dynamics AX. To help mitigate risk, a polished and time-tested implementation methodology, fine-tuned over the past 30 years, is employed. The first step is the development of a project charter that clearly defines expectations, including:

� The specific business objectives the organization expects to achieve by implementing Microsoft Dynamics AX;

� Detailed project scoping, including software functionality, data migration, external systems integration, and customized reporting;

� High-level project scheduling and quality milestones;

� Qualified project teams representing the client organization and Crowe; and

� Costs for specific Microsoft Dynamics AX modules including the Crowe Metals Industry Accelerator, along with Crowe implementation services.

UpgradesOn an ongoing basis, Crowe specialists review every new Microsoft Dynamics AX product release to assess new function-ality that should be implemented, and then provide training on these capabilities as required. Upgrades are installed only when the team is comfortable that it can successfully employ the new release with minimal day-to-day disruption.

Adding Value: Critical Crowe RoleAs a value-added reseller, Crowe not only developed and installs the Crowe Metals Industry Accelerator, it also provides critical metals industry expertise and broader technical mastery of process-focused manufacturing requirements. Its recent successes have included implementing the full range of ERP installation scenarios, including first-time ERP launches for startup operations, conversions from outdated or inadequate legacy systems, and upgrades of existing Microsoft Dynamics AX solutions.

In consulting on technology solutions for more than 30 years, Crowe has gained unprecedented breadth and depth of knowledge related to industry-specific software technologies, business processes, and integration and support methodologies. Today, hundreds of organizations rely on Crowe for technology solutions that are realistic, cost-effective, and delivered on time and on budget.


Crowe is one of the select few consultancies to be recognized as:

� A 2008 President’s Club for Microsoft Dynamics member;

� A Microsoft Gold Certified Partner in Information Worker, Integrated E-Business, Security, and Microsoft Business Solutions;

� Microsoft Security Partner of the Year; and

� Microsoft CRM Partner of the Year.

This proven expertise and high level of service enable clients in all types of metals manufacturing businesses to realize a quicker return on their ERP investment. Even more important, the Crowe Metals Industry Accelerator for

Microsoft Dynamics AX provides them – at long last – with a flexible, scalable, integrated system that fully supports the unique requirements of the industry.

1 “Magic Quadrant for Midmarket and Tier 2-Oriented ERP for

Product-Centric Companies,” Gartner Research, June 4, 2009,

http://www.gartner.com/technology/media-products/reprints/

microsoft/vol4/article12/article12.html2 ibid.3 ibid.

1.1Define Objectives

& Scope

1.2Select Project Team

1.3Define Roles &

Responsibilities

1.4Define Project

Approach

1.7Create Project

Charter

1.8Prepare Kickoff

Presentation

1.9Conduct Kickoff

Meeting

1.5Perform Risk

Analysis

1.6Create Project Plan

2.1Assess Technology/

Infrastructure

2.2Develop Installation

& Training Plan

2.3Deploy Technology/

Infrastructure

2.4Product Installation

2.5 & 2.6Administration

Training & Backup/Recovery Plan

2.7Technical Training

3.1Communicate Requirements

3.2Gather Information

for Interviews

3.3 & 3.4Schedule & Conduct

Interviews

3.5 & 3.6Document & Analyze

Business Requirements

3.7Develop Prototype

Scenarios

5.1Develop Data

Conversion Plan

5.2Execute Data

Conversion Plan

5.3Design & Develop

Reports

5.4Design & Develop

Interfaces

4.1E-learning

4.2Prepare for Prototype

4.3Conduct Training

& Prototype

4.4Finalize Parameters, Security, Procedures

7.1Prepare Cut-over &

Support Plan

7.2Conduct

Readiness Review

8.1Ongoing Support(Post Cut-over)

8.2Ongoing Support

(Month End)

7.3Obtain Cut-over

Approval

7.4Cut Over to New

System

5.5Design & Develop Customizations

3.8Review/Approve

Prototype Scenarios

6.1Prepare Pilot

Plan & Scenarios

6.2Prepare Pilot

Scripts & Scenarios

6.3Prepare Pilot Environment

6.4Conduct Pilot

6.5Develop End User Training Plan/Matrix

6.6Conduct End User Training

Crowe Horwath Implementation Approach

Technical Installation & Training

Functional Requirements

Training & Prototype

Technical Design & Development

Confirmation

Preparation

Implementation

Operation

Definition


http://www.gartner.com/technology/media-products/reprints/microsoft/vol4/article12/article12.html

http://www.gartner.com/technology/media-products/reprints/microsoft/vol4/article12/article12.html

PERF9341A

Microsoft, Microsoft Dynamics, SQL Server, and BizTalk are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. This material is for informational purposes only and should not be construed as financial or legal advice. Please seek guidance specific to your organization from qualified advisers in your jurisdiction. © 2010 Crowe Horwath LLP

Contact InformationJosh Cole is a principal specializing in advisory services in the manufacturing and distribution industry with Crowe Horwath LLP. He can be reached at [email protected] or 616.752.4274.

If you would like to start receiving information via e-mail about topics of importance to you, please sign up at www.crowehorwath.com/emailsignup.

www.crowehorwath.comWhen printed by Crowe Horwath LLP, this piece is printed on Mohawk Color Copy Premium, which is manufactured entirely with Green-e® certified wind-generated electricity.

About Crowe Manufacturing and DistributionThe Crowe manufacturing and distribution practice works with clients to improve performance and deliver measurable business value through enterprise business solutions, IT value management, business optimization, and merger and acquisition integration services.

About Crowe Horwath LLPCrowe Horwath LLP is one of the largest public accounting and consulting firms in the United States. Under its core purpose of “Building Value with Values,®” Crowe assists public and private company clients in reaching their goals through audit, tax, advisory, risk, and performance services. With 26 offices and 2,400 personnel, Crowe is recognized by many organizations as one of the country’s best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest networks in the world, consisting of more than 140 independent accounting and management consulting firms with offices in more than 400 cities around the world.

Documents

Crowe Metals Industry Accelerator Microsoft Dynamics AX AX Briefing Paper_lo.pdf · Crowe Metals Industry Accelerator For Microsoft Dynamics® AX A Long-awaited Industry Solution