Case Study: Using SAP to Streamline Operations of a Manufacturer


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A case study following Crestron's initial decision to implement SAP R/3 as its Enterprise Resource Planning (ERP) system through more recent upgrades, with BearingPoint's help, to implement further process improvements.

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Case Study: Using SAP to Streamline Operations of a Manufacturer

  1. 1. Crestron Electronics Using SAP to streamline operations of a manufacturerCompany information Crestron Electronics, Inc., a fast-growing manufacturer of high-end control and automation solutions for corporate, residential and educational markets, had decided to implement SAP as the backboneClient: Crestron Electronics, Inc. of its enterprise resource planning (ERP) system. With BearingPoint’s help, the company was able toHeadquarters: Rockleigh, N.J. deliver SAP process improvements and to increase the number of orders processed, reduce customer complaints and improve access to sales, finance and inventory metrics.Revenue: U.S.$400 millionEmployees: More than 1,200 Latest achievements: Benefits Achieved through • 2008 Consumer Electronics Association Process Improvements:Industry: Automation and control Mark of Excellence Award for the best in • Increased number of orders processed by custom home electronics products, services 53 percent without increasing headcount and installed technology • Eliminated 500 accounts receivable (A/R) • 2008 CEDIA Electronic Lifestyles Awards man-hours annually with automated invoice for excellence in the residential electronic generation matching systems industry: • Reduced customer complaints on shipping – Best New Product for Crestron iServer™ charges by 97 percent – Best New Technology for Crestron • Delivered on-demand, executive-level access Adagio Digital Media System (ADMS) to sales, finance and inventory data – Inaugural Inductee into CEDIA Product HallInsight | Case Study of Fame for Crestron SmarTouch™ (STS)
  2. 2. Crestron Electronics Looking to grow Electronics manufacturers have experienced profound market changes since 2001. Products and services are more commoditized due to accelerating globalization, more demanding customers and an increasingly complex sales environment. As a result, electronics manufacturers are seeking new ways to protect margins and promote growth. Crestron Electronics, Inc., a fast-growing, medium-size electronics manufacturer based in“BearingPoint helped us plot a Rockleigh, N.J., realized its client/server ERP system could no longer provide robust sales, technology road map to continue finance and inventory information. In 2003, the company’s IT department replaced its expansion of our business by existing system with SAP R/3. After the SAP system went live, Crestron did not enhance its SAP system until 2006. fully using our SAP investment.” By 2006, Crestron realized that it needed to enhance its SAP implementation to help increase —Andrew Ho, Director of Business sales and profits. With a compound annual growth rate of 12 percent, the manufacturer knew Projects, Crestron Electronics, Inc. its first priority was its customers; however, it became evident that its lack of experience with SAP would become a competitive liability for the company. Crestron needed a dedicated SAP adviser with extensive experience and knowledge to help its business projects department address operational and strategic issues and derive more value from its SAP investment. Relying on experience After receiving detailed responses to its request for proposals, Crestron selected BearingPoint for its technical insight into specific business areas and its experience with more than 3,500 SAP implementations. Using BearingPoint’s methodology, consultants mapped Crestron’s SAP implementation and developed an enterprisewide approach to how Crestron could realign processes, make organizational improvements, set up customer satisfaction programs, administer change management and conduct systems integration. Specifically, BearingPoint’s project team helped Crestron: • Unify its existing SAP, supply chain management and customer relationship management (CRM) systems to support business expansionFigure 1. Number of orders processed • Outline a road map to guide its business projects department through additional business-per quarter at critical points of SAP critical technology rolloutsimplementation Methodology details1000 With Crestron’s legacy ERP system, executives lacked access to sales, inventory and finance, including A/R and order-to-cash (OTC) process information. To obtain performance metrics, 814 Crestron executives had to rely on a difficult and time-consuming manual process that required800 searching e-mails and notes to collect and analyze the necessary data. Then, senior staff with 711 systems knowledge had to interpret the data. The entire process required significant admin-600 istrative overhead and took employees away from their other important responsibilities. 532 Working closely with Crestron, BearingPoint came to understand the company’s challenges Post-implementation Post-implementation and created an approach to address them with an appropriate set of SAP analytics. Now, Pre-implementation400 Crestron has on-demand reports for sales, finance and inventory—using data that existed in Crestron’s ERP system but was not previously utilized.200 Streamlining processes Crestron needed a scalable, more efficient business system that could handle growth. 0 Q1 2006 Q1 2007 Q1 2008 Improving the SAP order-processing solution allowed the company to increase the number of orders processed per quarter by 53 percent (Figure 1), without increasing headcount, and keep up with its growing business.2  Insight | Case Study
  3. 3. As an industry leader committed to its clients’ goals, BearingPoint delivered quickand measurable results to Crestron, adding value at the appropriate steps of itsthree-year SAP road map. By enhancing Crestron’s SAP-based sales, distribution and financefunctions, BearingPoint helped the company gain significant operational benefits withinits OTC process.“The process improvements that BearingPoint helped us create made our order-to-cashprocess more efficient, which laid the groundwork for productivity gains in other business- “The process improvements thatcritical areas,” says Andrew Ho, Crestron’s director of business projects. BearingPoint helped us with madeBearingPoint also helped Crestron streamline its OTC process and configure business rules our order-to-cash process morewithin SAP, automating many processes that Crestron used to perform manually. This efficient, which laid the groundworkallowed the company to keep up with the increased demand for order processing withouthiring new personnel, even with significant business growth. In addition, using automated for productivity gains in otherinvoice generation and matching helped the company save 500 man-hours annually in business-critical areas.”its A/R department. —Andrew Ho, Director of BusinessUsing the enhanced SAP system, Crestron can now automatically generate invoices overnight Projects, Crestron Electronics, Inc.via batch-process computing, significantly reducing its need for manual labor. Invoices thatwere previously faxed or sent via e-mail have also been automated. The system also allowsCrestron’s bank to handle matching and reconciliation of payments by interacting with itsSAP system, promoting quicker resolution and identification of exceptions.Crestron’s customers are also benefiting from improvements to its SAP system. The companywas receiving complaints about shipping charges billed outside customer accounts. Toresolve this problem, BearingPoint modified the SAP system to properly track and directly billeach customer’s shipping account. Since it began using individual customer United ParcelService accounts rather than custom invoices, Crestron’s customer complaints have decreasedby 97 percent (Figure 2). Customer service representatives can now focus on more business-critical processes such as customer retention and past-due invoice resolution.Looking to the futureToday, BearingPoint continues to guide and support Crestron by realigning and improvingprocesses, further enhancing its SAP system to increase customer satisfaction and managingchange. Crestron’s modernized SAP system provides the company with a foundation tosupport its growing business through improved customer service and sales. A three-year roadmap to provide even greater efficiency is under development, comprising implementation Figure 2. Number of customer accountof SAP CRM 2007 and integration with its new SAP ERP Central Component 6.0 platform complaints per monthand business warehouse systems. 75 75About this case studyResearch and analysis for this study was conducted by Mainstay Partners, an independent 55consulting firm, and was based on information gathered from interviews, planningdocuments and searches of industry literature. 35Mainstay Partners is a leading provider of independent value assessment and IT strategyservices. Our clients include Motorola, Honeywell, Oracle, EMC, Network Appliance, SAP,Microsoft and BearingPoint. For more information, visit 15 2Information contained in this publication has been obtained from sources considered reliable, 0but it is not warranted by Mainstay Partners. Copyright © 2008 Mainstay Partners LLC. -5 Legacy Current Insight | Case Study  3
  4. 4. Helping our clients get sustainable, measurable resultsBearingPoint is a leading management and technology consulting company servingthe Forbes Global 2000 and many of the world’s largest public services organizations.Our thousands of passionate, experienced consultants help organizations around theworld solve their most pressing challenges, day in and day out. Through our collaborativeand flexible approach, we help our clients get practical, sustainable, measurable results,make the right strategic decisions and implement the right solutions.We are BearingPoint, management and technology consultants.To learn more, contact us at 1 866 BRNGPNT (+1 508 216 2523 from outside theUnited States and Canada), or visit our Web site at, Inc.1676 International DriveMcLean, VA© 2008 BearingPoint, Inc. All rights reserved. Printed in the United States.BearingPoint® is a registered trademark of BearingPoint, Inc. or its affiliatesin the United States and other countries. Any other marks are the propertyof their respective owners. C4620-1008-01-USNYInsight | Case Study