Australian Linen business gets house in order with Sage

After problems with a series of bolt-on systems were leading to critical delays at homeware wholesaler Linen House, the company decided it had had enough. An Accpac ERP and Warehouse Management system, backed up by Sage CRM came to the rescue...

From humble beginnings in 1993, Melbourne-based Linen House has grown to become one of the most innovative and successful wholesalers of bedlinen and homewares in the Southern Hemisphere. Today it employs 80 people and has expanded with subsidiaries in New Zealand and South Africa.

Business challenges
Linen House originally managed its front office with an accounts package backed up with a variety of bolt-on systems, which made data integrity and information flow from one operation to another very cumbersome.

As a consequence, allocating receipts with numerous transactions for major customers could take as long as five hours. Reconciliation difficulties meant that GST returns took a minimum of four hours, and balancing subsidiary ledgers to the general ledger could take a full day. Even the input of electronic orders was a semiautomatic function only that would take three to four hours.

“Quite simply, basic but essential business tasks were too cumbersome and this was affecting cashflow, service and strategic planning,” says Mark Bartolozzi, director of Linen House.

Linen House recognised the need for a comprehensive business management solution that could support and synchronise all of its key operations, from order processing through distribution, to invoicing and other customer communications. It also wanted more powerful reporting capabilities that could help it assess all operations and plan further expansion.

The company recruited experienced systems integrator, Online Business Systems, to provide a seamless, enterprise-wide solution.

A Sage business choice
Following a review of possible options, Linen House selected a 50-user Sage solution incorporating Accpac ERP, Sage CRM and Accpac Warehouse Management, along with an EDI (electronic data interchange) management solution that enables electronic orders and invoicing to be exchanged via the major retailers to their exact standards. It also purchased five years of Sage’s SupportPlus on all products.

“Sage was the only vendor that could supply a truly integrated end-to-end solution, with no third-party software or communication required, and at a realistic price point,” says Bartolozzi. “Online Business Systems demonstrated a commitment to understanding our business processes and being able to provide valuable input to operational change brought about by system change.”

Following a three month implementation, the system went live in Melbourne in November 2005. Such was the positive return of the system, it was subsequently rolled out to a subsidiary - Company Aura Lifestyle P/L - in July 2006.

Time and cost savings
Following the Sage installation, Linen House immediately experienced several major time and labour cost savings.

Key to this result is the seamless flow of information through all of the Accpac modules, coupled with the quality task-flow enforced by the system, and the automated action alerts that ensure the system is operating within the means it was designed for. All this has led to operational efficiency and greater service levels throughout the entire organisation.

For example, now, when a new order comes into Linen House via EDI, the Accpac system imports the order and verifies pricing and stock availability. At the same time the warehouse has visibility of the order, enabling preparation of the picking process before the order has even been received by the warehouse. Invoices and carton contents reports are automatically generated upon completion of each order being picked, along with the freight manifest which is electronically forwarded to the transport company each evening.

Consequently, the input time for electronic orders has been reduced to just 20 minutes. Because all stages of an order’s journey are tracked, there is also increased accountability which ensures that Linen House’s high service standards are maintained.

In the all-important accounts department, the system has drastically reduced the time required for administration tasks – by up to 50 hours per month. The tasks of receipt allocation to major customers and balancing ledgers have each now been slashed to thirty minutes. GST returns are now prepared in just 20 minutes – and, more importantly, they balance to the cent with an accurate audit trail.

Critically, Accpac ERP enforces stringent quality control processes which eliminate costly human errors.

The warehousing function has similarly been given a boost, with stock management, stock level accuracy and picker/packer performance greatly improved by the efficiencies and controls built into the Accpac system.

Bartolozzi says he was most impressed by the exception reports which enable managers to quickly pinpoint and address pending issues. “Sage has given us a warehouse that is much more accountable and streamlined, which is not only generating hard dollar savings but incalculable soft savings in terms of prioritised actions and improved customer service.”

“The most important aspect of the Sage installation is that we can now generate very accurate and timely reports, which gives us the up-to-date cross-organisational picture we need to make critical business decisions. Combined, all these improvements are creating a very sturdy foundation from which to launch our expansion plans.”

For more information
Sage Business Solutions
0800 904 409
sales.pacific@sage.com

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