This Way Up

February 27, 2008 by Christine Macfarlane

“The company started in 1926, we’ve been in the same building since 1955, and we’d been on the same software since 1978. It was time for a change”, says Jeff Ellsworth, COO at Primus. Refreshing the way it does business would also help to support the owners’ goal to create a new face for Primus to present to its clients.

The desire to implement a stronger presentation of its own image paralleled Primus’ vision of expanding its contribution to its clients’ successes through the power of consistent, persistent, professional communication. They believe that investment in good branding rolled out through good signage can lead to more sales, greater customer loyalty, and priceless good will.

Signs of the times

The business man driving to a new city can find his way to his destination easily. Even with the most sophisticated turn-by-turn GPS navigation system, he still will appreciate the city that identifies his location and provides easy-to-read street signs at every intersection.

The mother traveling with her children will continue to do business with the car rental agency that posts clear, visible row and space markers at the airport car rental lot so she can easily spot the van in her rental agreement.

Buyers and sellers of commercial and residential property will be influenced to trust their business to professional real estate companies and financial institutions that project a trustworthy image displayed through well crafted signage.

Patrons of casual dining establishments will return again and again to places made attractive and welcoming with friendly, consistent interior design and messaging.

Consumers shopping for gasoline will be pre-disposed to buying from reputable dealers with signs that are eye catching and consistent from one location to another.

Located in the Orange County city of Stanton, California, Primus is a well established U.S. manufacturer and distributor of custom signage for petroleum, automotive, food and beverage, retail, car rental, real estate, and financial services companies, as well as for cities, towns, and other government entities. It also provides design services to consult with and support clients with brand imaging.

“The future of our business is image management”

Research by McKinsey & Company, the global consulting firm, in 2000 suggests that strong, well-leveraged brands produce higher returns to shareholders than weaker, narrower brands. Ellsworth says, “The future of our business is as an image management company. We are expanding our services to work with clients far earlier in the development of their signage so that we can help them with branding as well as with production of their signs.”

In order to move in this direction the company wanted to improve some of its processes. For instance, fully one third of its business comes from special orders. The problem was that these orders were created with no part numbers, bills of materials, or costing. They were hand logged into the system and paperwork was filed away, but without standard costs and a closed loop reporting system there was little chance of accurate record keeping. “It was essentially an ‘after-effect’ accounting process,” recalls Ellsworth. “We had to manually match up individual items with financial statements, which made selling difficult and cost accounting practically impossible.”

In addition, because the process functioned in a non-standard, manual-mode way, it was difficult to bring new people on board and train them effectively.

One option was to upgrade its current environment. “The software we were using actually had much of the functionality we needed, but it was just too cumbersome to use,” says Ellsworth. “It would have taken a computer scientist to figure it out.” There was, however, a general feeling among the decision makers that it was time to clean house and start fresh.

Choosing a new route

Many companies put a great deal of effort into defining a list of vendors to evaluate. Ellsworth says that wasn’t the case for Primus. His background, including his experience working for a reseller of a competing ERP solution, led him to recommend the SAP Business One application as the first one to consider.

Ellsworth contacted Vision33, an SAP Business Partner and full service IT consulting company in nearby Irvine, California, for a demonstration.

The Primus decision makers honed in on the ability of SAP Business One to enable the company to deal with special orders on the fly and get them into the system with part numbers and bills of materials. Vision33 demonstrated this capability to their satisfaction, along with other functions having to do with business management, especially cost accounting, and that sealed the deal.

After three months of staging, with ample time for people in each functional area to test it in advance, the new environment went live in October of 2005. “We spent quite a bit of time cleaning our data,” says Ellsworth. “In the end we just brought forward our customer data, and information about vendors, items, and base prices.” And because they were committed to a clean start, they cut over to the new system all at once.

Ellsworth notes that in the beginning people still tried to use the system in the old way. “The cultural change actually happened rather slowly, but now people can’t believe we used to do things in such an inefficient way,” he laughs.

The marque of operational excellence

Today, operating efficiently in the SAP Business One application, the Primus management team has reason to be optimistic about the company’s ability to expand its reach to more customers, add new services, and to ramp up its volume output.

For one thing, sales people can deal with special orders on the fly and get them into the application. Vision33 created a tool within SAP Business One that builds a part number and bill of materials in real-time. All sales people have to do is choose from a set of options and the logic behind the scenes can determine the cost, generate a quote, and send the order straight to the shop floor.

Getting a better handle on costs through fine-tuned sales reports and accurate documentation enabled Primus to price several product lines more accurately. In addition it provided a rationale for their customer discount structure. Ellsworth says, “The result is that we’ve seen a seven to ten percent gross profit improvement.”

He also estimates that the company is doing thirty percent more volume than three years ago without hiring any new people. “In order to achieve this volume increase with the old system we would have needed to hire as many as five new people,” he says.

“In addition to operating more efficiently and more profitably, our clients tell us we’re easier to do business with,” says Ellsworth. “I’d say that our move to SAP Business One gave us a business and an image makeover.”

“One other thing I want to mention,” concludes Ellsworth “is how easy it is to make changes in SAP Business One. We are currently in meetings to further standardize our business practices, and when people ask me ‘can we add this field to this form so we can do thus and so?’ the answer is always, ‘Yes, we can do it immediately.”

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