As an audio equipment distributor, Hwee Seng represents established trade names in the hi-fi industry, like TEAC, NIRO and Robertson Audio. The company has more than 80 dealers in Singapore, including super chain stores like Best Denki and Courts.
With S$3million (US$1.8 million) in revenue, Hwee Seng employs 35 staff in Singapore and 30 staff in Malaysia. Its headquarters is in Singapore and it has offices and service centers in six Malaysian states. Much of the company’s business success is dependent on its relationship with its dealers, which translates into providing good service.
One example is to be able to respond promptly to dealers’ requests for information on stock status and pricing. Previously, Hwee Seng was unable to give an immediate answer on stock status and would rely on hard-copy price lists, which were sometimes not updated, or might not be immediately available.
“I am pleased with the performance of SAP Business One as it gives me real-time and accurate information on our stock level – something that our previous systems could not do. I chose SAP Business One because I believe that SAP is a strong organization that is able to provide support to its customers, unlike others that we have worked with before,” says David Tan, Managing Director, Hwee Seng Electronics.
Its previous ERP system was Swedish software named Hogiart. While the software had the modules that Hwee Seng needed, it lacked the functionality and integration that the company required to gain operational efficiency. “Hogiart has inventory, sales and accounting modules, but the functionality was not there,” says Cecilia Foo, Finance Manager at Hwee Seng. In addition, the system was not robust and could not support their business. “When we put in orders, traceability was difficult as there was no audit trail,” she adds. The solution did not allow for the detailed customization needed to integrate with Hwee Seng’s Malaysia offices. It also did not allow staff to get real-time updates on what stock was on hand. In sum, Hwee Seng’s existing platform not only did not give them operational efficiency, it also did not meet its growth and expansion needs.
Business and technology revamp needed
With the realization that a complete overhaul of Hwee Seng’s ERP systems was required, an online article on SAP Business One caught Tan’s attention. He promptly set up an appointment for an SAP Business One demo session. He signed the contract two weeks after that first meeting.
“SAP Business One had all the necessary business components that spanned the accounting, inventory, and business process operations. Our operation was suffering too much,” says Tan. Hwee Seng selected SAP Business One for its scalability, “Drag & Relate” functionality, customization and support for its users. The applications licensed and implemented include Financials (GL, AP/AR), sales and distribution, inventory management, and purchasing.
The total value of the ERP system, which included SAP Business One software, a hardware server, implementation services and training, came to S$70,000. The implementation of the software took five days, including training and sales support. Subsequently, a support line was provided to answer any further queries the users had. In total, it took less than a month to get all the users up to speed, through support calls by phone.
“The users did not need to have extensive IT knowledge to use the solution,” says Foo. The software was intuitive enough for a user to take just five minutes to learn how to use the software. A tricky part of the implementation was the product part numbers. Hwee Seng has over 300 part numbers, with each number being lengthy, reaching a maximum of 15 characters. These characters would comprise of codes. For instance, the first two digits would represent the brand, the second two digits the type of product, and the model number would be the last string of digits.
The company decided to use the product factory code as their part number. Not only are the numbers shorter, resulting in less errors during data entry, it also means having only one set of product numbers that everyone uses, whether they be the sales department, the purchasing department, the manufacturer or the dealers.
Information at your fingertips
A compelling feature of SAP Business One for Hwee Seng is the “Drag & Relate” feature that allows users to drag information from disparate data stores and link them on the desktop. This integration gives company-wide visibility of sales processes and it also shortens the learning curve, since users do not have to learn new tools to handle analysis and marketing tasks.
“SAP Business One allows us to see the complete trail, from the sales order to delivery note, invoice, the goods return note, and credit note. This is great for answering queries from dealers concerning the status of their orders or invoices,” says Foo. In typical accounting packages, modules tend to be separate and not fully integrated. However, this is not the way businesses operate. Instead, businesses want to access different menus to get relevant information. SAP Business One allows the user to get the information readily with the drill down feature available on every screen.
The solution’s sophisticated analytic tools also give Hwee Seng’s management full control of company information and activities. Simply by dragging and relating one piece of information to another, users can create unlimited reports that help them focus on relationships and transactions that are critical to the business. As all the information is now in real-time, sales people can give an immediate response to any queries from their dealers, the store person can view the stock status at their different locations in real-time, and management has access to all the data at their fingertips. “This was impossible with our previous system as both users and management had to wait for each other to compile and consolidate the information, which often took days to complete,” explains Foo.
SAP Business One also has in place various management controls, such as online alerts to signal an issue demanding immediate action, and sales discount management, which can put upper limits on the amount of discounts that a salesperson can give to different customers. For instance, Hwee Seng can limit the amount of discount given to its dealers, and should a sales person give a higher discount, an alert is sent to management, requiring authorization from management to allow a higher discount.
Hwee Seng also found the account receivables module very useful. For instance, SAP Business One can set credit limits for each customer and if a customer is delinquent in payment and reaches the credit limit, an alert is sent, and special approval is needed before more stock can be released to the customer. “SAP Business One is also intelligent enough to add up not just the invoices but also delivery notes to get the total credit limit, allowing us to see the risk associated with the customer,” says Foo.
With the system in place, Hwee Seng has reduced the total inventory level by 20 percent. The delivery time has also shortened from four days in the past to one or two days, due to the availability of real-time information that has made stock status transparent.
“SAP Business One has created a more transparent and efficient environment for Hwee Seng. We aim to achieve operational efficiency and productivity, and in turn streamline our operations in the sales and marketing departments,” says Foo.
Hwee Seng’s next plan is to create more customized management reports and have multiple “ship to” addresses where one quote is made but delivery is to several addresses. With the SAP Business One system firmly in place, and Hwee Seng’s improved operational efficiency, the company plans to scale the system to meet its growing needs. It may consider using the system to extend its relationships beyond dealers to end customers. It may also plan to bring its Malaysia offices onto the SAP Business One platform.