Financial Data in Real Time and On Time

Lightweight, energy saving and recyclable. Most companies can’t claim to make products that match that description but Fagerdala USA can. The company’s molded foam products, specialty resins and extruded foams help boost performance and economy of many common items, such as toys, and packaging and shipping materials.
Fagerdala USA’s products can be found in an array of everyday items. Pharmaceutical companies rely on its temperature-controlled packaging to protect medicines during shipment. Stereo equipment makers pack their CD and DVD players in Fagerdala USA’s molded foam. Both the floating pool noodles that children use and the access doors above spare tires in cars are likely to be made by Fagerdala USA.
Fagerdala USA is a subsidiary of Gustavsberg, Sweden-based Fagerdala World Foams. With operations and headquarters in Marine City, Michigan, Fagerdala USA expanded into Illinois and California. To support its growth and ongoing success, the company depends on real-time data and standardized and streamlined processes from SAP Business One and integration help Computer Decisions International (CDI), an SAP partner.
“With SAP Business One we now have cohesion between sales, inventory and shipping,” says Lou Giovannone, Fagerdala USA’s group controller. It’s a big improvement from pre-SAP days when business processes were not integrated and not optimized.

Anytime, anywhere access

With the new applications, month-end financial close is 75 percent faster, down to six days from 45. Demand planning and financial forecasting are also more accurate. In the past employees had difficulty reacting to demand fluctuation. Such fluctuation might occur, for instance, if an automaker that uses Fagerdala USA’s spare tire access doors experiences an up tick in sales. Fagerdala USA must be able to accommodate the increased demand.
Or as another example, when summer comes and the demand for pool float toys increases, Fagerdala USA must be able to react and meet the higher demand.
Now employees have online access to sales, inventory and production data so they can react quickly to such changing customer needs as well as adjust financial plans accordingly.
Because Fagerdala USA has four, geographically dispersed manufacturing facilities, eight companies that function as separate entities, and managers in many locations, key data must be accessible from anywhere at any time. “The nature of our business is that customers give us big, blanket orders and then tell us what they need produced and shipped from week-to-week. With SAP Business One our systems are Internet-based and integrated. We can make decisions more quickly and be more effective,” Giovannone says.
Employees can access SAP Business One as needed, including the general ledger system, cost controlling, data collection, material purchasing, plant resource scheduling and bill of materials creation systems. They can track customer and supplier interactions. They are able to view and manage manufacturing jobs throughout the process so they are as cost-effective and time-efficient as possible.

Out with the old, in with SAP

When Giovannone joined Fagerdala USA a few years ago the company had in place three different, PC-based accounting and production control systems. The systems lacked Web functionality and were not integrated.
But Fagerdala USA also had an excellent existing relationship with CDI and had already purchased SAP Business One. So Giovannone took the initiative to learn the application himself, a task he says wasn’t difficult. Then, he started on a plan to retire the legacy systems and roll out SAP.
“The system is easy to learn and navigate. It is very intuitive,” he says. “As soon as I started to use it, it was immediately apparent that it was a good fit and an excellent system.”
Part of the implementation was ensuring that data about suppliers and trading partners was accurately integrated into the system. To make sure there was no disruption to business, Giovannone and his team decided to begin with data about smaller companies and move on to bigger ones. The smaller ones took about two weeks each to input while the larger ones took a month or so because there were more and larger data files.
After a fast four months all eight Fagerdala USA companies and all four Fagerdala USA plants were up and running and on the new system. As the roll out progressed Giovannone shut the older systems down, an important step that helped the company eliminate unnecessary IT maintenance time and cost.

Communication and easy navigation

SAP Business One generated benefits almost immediately. As a result of the greater integration and automation, Fagerdala USA was able to reduce its accounting costs and manpower. It cut its nine full-time accounting staff to four. And as the company continues to grow, it hasn’t had to hire new accounting people. It has been able to maintain its productivity and while keeping staffing costs under control.
Not only are accounting processes more streamlined and month-end close faster, financial processes are also more flexible. Because data is updated in real time, Fagerdala USA can react more quickly to market changes or customer needs. This improvement allows the company to be more strategic in its financial planning. It can manage processes to achieve high productivity while keeping a close eye on manufacturing costs.
“SAP Business One is Internet-based so the applications allow us to communicate and do any task we need to do on the spot. We can navigate from top-level financial statements down to details such as purchase orders and invoices. We can quickly and easily retrieve large amounts of data,” Giovannone says.

Role-specific views

Fagerdala USA employees have been receptive to the new applications. They needed to learn a new user interface, but Giovannone says that came fairly easily and took about a month to master. Because the system is uniform from plant to plant, employees can easily collaborate.
“Employees like the new applications because they´re integrated. Managers and employees can communicate more effectively,” he says. They use it to generate inventory reports and to schedule production orders and shipments. Each employee has a role-specific view into data he needs and each manager has a dashboard to monitor the whole process.

Award-winning SAP partner

Giovannone is quick to give credit to CDI, which he says played a crucial role in the successful implementation. An SAP partner with several SAP awards under its belt, CDI first demonstrated how SAP Business One would work within Fagerdala USA’s operations and then assisted with the roll out. “CDI comes from the manufacturing industry. They understand our language and our problems,” he says.
Fagerdala USA has more SAP plans on tap as well as plans to add modules from CDI’s Microshop application, which works with SAP Business One. Giovannone says the company will implement real-time production monitoring in the near future to give plant managers moment-by-moment status data. And it may automate procurement, to improve purchasing efficiency.
For now, the company is enjoying the benefits it has already achieved. “Anybody can look at open sales orders or shipments in progress and get up-to-date information. Financial processes are integrated and standardized,” Giovannone says. “That makes everybody happy.”

Sarah Z. Sleeper
Sarah Z. Sleeper