Regency Media tackles international growth with the help of SYSPRO

Australia’s largest privately owned DVD manufacturer had a booming business and needed an IT system to support its international growth...

For 22 years Regency Media has been manufacturing audio cassettes, CDs and more recently, DVDs for the Asia Pacific market.

It’s a niche manufacturer that has achieved international success as it works behind-the-scenes, pressing and packaging the latest Hollywood blockbusters, TV releases and chart-topping songs in readiness for local distribution. Clients range from major recording studios to small independent producers. Its competition is aggressive and global, and includes organisations such as Sony and Technicolour.

The company is Australia’s largest privately owned DVD manufacturer, operating from facilities in Sydney, Melbourne, and – from September – Calcutta, India. Annual revenues exceed $40 million and in 2008 the company expects to produce 15 million CDs and over 43 million DVDs.

Disparate databases
Five years ago Regency Media’s business may have been booming but the IT systems intended to support company operations were beginning to hit the wall. Core business data was located across seven separate databases.

Lack of integration, disparate systems and an inability to access corporate data were all growing problems. Management realised it was time for one source of information; a single ERP system with a single database.

IT manager, Ryan McNaught, says: “We began looking at options in early 2003. As a medium sized business we didn’t particularly want to go down the path of the giant applications so we looked for a solution that was tailored for the mid market.

One of McNaught’s biggest concerns was to find software that would be flexible enough to adapt to Regency Media’s operations rather than requiring the company to adapt to the software’s processes.

“As an example we recently began work with a new customer who has some very specific requirements. We have to be flexible enough to quickly adapt processes to meet customer needs.”

That flexibility and speed are two of Regency Media’s core strengths against its larger, offshore competitors. Inventory management was also a major consideration for the new system. Piracy is a real fear for many of Regency Media’s customers and the company has to submit to an annual security certification which in part relies upon the ability to track and trace every single DVD or CD.

After evaluation and due diligence Regency Media selected SYSPRO, an enterprise resource planning solution with a thirty year history of helping mid-sized manufacturers to get more out of their business.

Replacing flawed processes
On 1 April 2004 the system went live with SYSPRO deployed on Microsoft Windows Server 2003. Microsoft SQL 2005 provided the long-awaited single database.

“Like any earth shattering, business changing event, implementation obviously had a few teething troubles,” McNaught acknowledges.

“These things call for a large cultural change and it takes time to break down the old ways of doing things. When we first started using SYSPRO it was to replace things like accounts payable, accounts receivable, general ledger and scheduling.”

Although the focus was largely on replacing existing functionality, McNaught was anxious to ensure that the changes did not merely replicate processes.

“A change of system gives the chance to analyse processes and to consider if this is what you want to do going forward. If you find the processes are flawed, implementation gives you the perfect opportunity to change them,” he says.

“After about six months we could see we were beginning to get a return on our investment. Everyone was much more comfortable with the system so we were able to turn our attention to new things, like streamlining warehouse processes,” McNaught explains.

A veteran of a number of similar implementations, he was determined to ensure that the company took its time with the new system, avoiding the pitfall of taking on too much at once.

“I’ve seen countless systems fail because people tried to do it all at the same time.”

Four years later
Four years after implementation, Regency Media is still tweaking its systems and McNaught doubts the process will ever stop.

“In that time the system has changed dramatically. We now use every module and we do so much more with it,” he says. “We’re always looking to do things better, faster and easier. We can’t afford to stay still.” The company has remained true to its intention of fitting the software to its processes rather than being forced to change.

“System flexibility has been important in this,” McNaught agrees.

“As an example, we employ some very highly skilled specialists and we don’t want to waste their time by making them administrators. So we’ve made changes in the system to reduce their paperwork and keep them focused on their jobs.”

The maturing internet has also offered Regency Media new ways of doing business. By linking the company’s web presence with SYSPRO, customers can now place orders and submit their material securely and electronically.

Entire projects can be managed via the website, reducing the cost of order processing. It’s an important benefit for a high turnover, low margin business.

The move into India
In recent months Regency Media has been particularly busy getting ready for the opening of the new Indian manufacturing plant. As an extension of the company’s manufacturing capabilities, it will be important for the new operation to work in a manner that is consistent with the two Australian plants.

To help achieve this McNaught’s team has installed the same ERP system in the Calcutta factory.

“We were able to take a copy of the processes and procedures that we do here and transplant them straight over to India with minimal modification. It took a lot of the potential headache out of the equation.”

Apart from some minor software changes to meet India’s complex tax regulations the Calcutta deployment has been carried out by Regency Media’s inhouse IT staff. The team handles about 95 percent of all work on the ERP system, in part to keep costs down, but also to ensure that knowledge is built up and stays within the company.

With the new plant all but ready to go live, McNaught’s attention is now focused on keeping the ERP system operating at optimal efficiency so that it can support production in the build up to Christmas.

DVD and CD manufacturing is subject to seasonal fluctuations with about 80 percent of demand occurring between July and December. It’s a time for special editions, boxed sets and one-off packaging offers, and it’s guaranteed to keep Regency Media’s production lines busy through to the end of the year.

For more information

SYSPRO
www.syspro.com.au
(02) 9870-5555

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