Southern Pump & Tank Co. began operations in Charlotte, North Carolina, in 1935 as a distributor and installer of petroleum equipment. The company now specializes in liquid handling equipment for a broad range of industries in the southeastern U.S., including oil companies, convenience stores, bulk petroleum plants, and fleet-fueling operations.
By 1998, Southern Pump had outgrown its legacy IT systems and was operating on paper much of the time. “Keeping up with service calls was a nightmare, and when our technicians got there, they might not have the right parts on the truck,” recalls John Force, SPATCO vice president for technology. Tracking at the office wasn’t much smoother either: “The information was here, I just couldn’t find it.”
It was becoming increasingly obvious that the company’s existing systems could not be expected to keep up with its growth. SPATCO especially – and desperately – needed to improve service and customer relations. SAP Business Partner Osprey presented the company with the blueprint for a phased introduction of an integrated SAP platform, starting with an enterprise resource planning (ERP) system that would replace its legacy systems and integrate all financial processes. Southern Pump accepted, and Osprey implemented a mySAP All-in-One solution in 16 weeks. Osprey’s Integrated Learning Solutions team provided documentation and training.
Growing the business, growing the system
Next, Southern Pump and Osprey worked together to upgrade the existing SAP processes and to migrate the company’s asset management from a legacy system – which required duplicate data entry – into SAP. Osprey implemented a system upgrade which included the SAP Asset Management module, while Osprey’s Integrated Learning Solutions team once again updated documentation and provided training. The process took only five weeks.
The benefits from the changeover to SAP proved rapid and solid. SPATCO lowered total inventory by 28 percent, reduced slow-moving items by 70 percent, reduced the time from job completion to invoice generation from eight days to three, and compressed the monthly financial close from 20 days to 5. Overall, Southern Pump increased its average gross margins.
“The Osprey implementation team had a breadth of knowledge about mySAP All-in-One and was able to implement quickly,” says Charlie Tew, CEO of SPATCO. “This enabled us to limit the internal business and IT resources we had to dedicate to the project. The payback on inventory alone has almost paid for our SAP implementation.”
Next stop – bringing the customer inside
But SPATCO couldn’t afford to stop there. To substantially reduce customer dissatisfaction and increase the level of service, field service and repair processes had to be streamlined. In some cases, technicians submitted their paperwork only once a week, greatly slowing the accounts receivable and “service to cash” cycles. To deal with these problems, Osprey planned and executed the implementation of SAP Service Management in 12 weeks, again including full training and documentation. Southern Pump uses SAP Service Management to track equipment at the customer site, receive service calls, dispatch jobs, track labor and materials for billing, review equipment histories – and even track the profitability of individual service vans. “mySAP All-in-One closed any holes that we had from a service-issue perspective,” says Tew.
Next, Southern Pump saw the need to give customers direct access to its system, so Osprey completely redesigned Southern Pump’s website, using the SAP Internet Transaction Server. SPATCO customers can now use the company’s website to find a part, order it, and have it drop-shipped to them. They can also enter a field service request online, which is automatically routed to the appropriate service technician via e-mail. And while all this behind-the-scenes integration is going on, customers can track the status of their requests and view service records online.
“Now customers can place service orders over the Internet, and when we send technicians, they know what inventory they need to do the job,” explains Tew. “Our number-one issue within the company is exceptional customer service. Everything that we do starts with the customer. mySAP All-in-One offers us complete information concerning all aspects of the business relationship to better serve the customer.”
Revving up for the future
SPATCO runs its mySAP All-in-One solution on an IBM platform and database. Approximately 130 users access the system across 11 locations, connected by a wide-area frame-relay network. At this point, the company uses mySAP All-in-One to integrate equipment-installation quoting and sales by following the process through from component purchasing, installation and billing to follow-up for 5,000 customers who place 4,500 orders a month across seven states.
Looking ahead, SPATCO plans to implement mySAP Customer Relationship Management (mySAP CRM) to enable service technicians to update and close orders on site, instead of calling in the information, which entails follow-up paperwork. The company also wants to use the solution to support its mobile sales force and to provide an interaction center for customers. This way, information will be sent to the main office in real time.
Altogether, Southern Pump has become a more agile company through mySAP All-in-One, notes Tew. When the troubled economy led to a drop in new construction, the company was ready to grow a whole new segment of its business – service and repair. As a result, service management has become Southern Pump’s fastest growing division. “SAP gives us a competitive advantage that we could not get anywhere else,” he sums up.
For more information on SPATCO, visit www.southernpump.com.