Since 1890, the Henry F. Michell Company has been supplying greenhouses, growers, nurseries and landscapers with top-quality garden products. Acting as a broker and distributor, the firm sells thousands of products nationwide from its Philadelphia location. Yet until 1998, when Mike Vogin joined the company as its first IT Manager, Michell's operations were rooted in a paper-based system that stymied both competitiveness and growth. To move Michell's forward, Vogin chose Vormittag Associates' S2K Enterprise ERP software.
The Michell Company didn't have a formal IT department when Vogin arrived. It did have 40 dumb terminals operating on a UNIX platform and 10 PCs, but the system couldn't catch up with the backlog of paper the company's various departments generated. "You had to walk sideways in certain parts of the building because the papers were piled so high," Vogin said.
Michell's vice president, Henry F. Michell 4th, and Vogin decided that a new computer system and ERP software would allow the company to automate its business processes and compete effectively in the industry.
Vogin came from an IBM shop and considered the AS/400 as the best solution for Michell's business environment. "It's all distribution," he explained. "The customer places the order, we process, and we ship. How much more is there to distribution?"
Breaking Ground
Back in the 1890's, Henry Michell, founder and president, could have demonstrated his answer simply with a pencil and paper. A century later when Vogin began Michell's IT department, he found a staff of 13 people doing Henry's tasks, but with few of the benefits 100 years of technology advancements should have reflected. “They were doing data entering, mutual editing of orders, order checking, and just a lot of paper flow," Vogin recalled.
With the AS/400 as his choice for a computer system, Vogin began searching for an ERP software solution and the right team to implement it. "If a company is going from a paper environment, they should get the best software based on their needs and demo it extensively," Vogin said.
Vogin organized demonstrations from Vormittag Associates, Inc. (VAI) and other software companies for the various groups of managers at Michell's. Along with accounting and the typical business administration departments, the company has divisions for greenhouse plants, nursery supplies, roses, and seeds. Vogin noted that the seed department makes up 25 percent of the company's sales, and was especially concerned with the distribution support of that department's future software. "Within our different departments there were favorites," Vogin recalled. He said the company's criteria included eliminating the paper-based system, improving customer and vendor relations, increasing support for the sales force, supporting e-commerce, and a strong distribution system. "Each department had favorites and we had to do a lot of soul-searching to narrow it down," Vogin said. Michell's called VAI in for a total of four different demonstrations, and decided that its S2K Enterprise ERP software best answered its needs. "The price from VAI was very attractive, and their graphics and inquiry features were superior," Vogin said.
Tilling the Land
Converting Michell's legacy software and customizing it started in January of 1998, and involved 10 months of work. During the conversion process Michell's staff went through a training program. "We first concentrated on our department heads," Vogin explained. "We have four product divisions, plus people from our accounting division and sales department. During this time we had a test environment and all the managers would do training for their support staff."
Vogin also recommended Vanguard Systems, a Philadelphia-based midrange integrator and software developer, to help build infrastructure after the company went live with the new system. "The first 10 months were spent implementing our old system on the AS/400 and integrating the VAI software," Vogin said. "Then Vanguard continued on with various stages of important changes we wanted to make."
Vogin stressed the importance of having a competent integrator on the team, and credited Vanguard with helping Michell's to maximize its success with the S2K Enterprise software. "Michell's is unique in the way they do business," said Greg Cucchi, manager of professional services at Vanguard. VAI's S2K Enterprise is a distribution product that fits well with the company's seed division. Michell's other divisions act like brokerage firms and each one deals differently with a common group of vendors. Yet the software was able to handle all the complexities."
Vanguard built infrastructure for Michell's based on the IBM AS/400, VAI's S2K Enterprise ERP software, and assorted plug-ins such as Domino/Lotus Notes and Fax/400 from American Presence.
The Domino/Lotus Notes came into play when Michell's issued laptops to its outside salespeople and brought them online. Before the new system, outside sales people did their order entries by handwriting, fax and mail. Data entry people at headquarters hand-coded and priced all orders, then entered the data. Now the salespeople use direct order entry through the Internet or direct access to the server.
With VAI's e-commerce capabilities, customers can also order online. "Our product data integrated right across to VAI's e-commerce software and that's another reason we went with it," Vogin said. The date is seamless and worked very well."
Weeding Out the Problems
Although the data integrated seamlessly, Michell's soon discovered that customers had problems with the data's presentation. Some of Michell's product divisions have to make as many as 1,000 items available online. Customers told the company that trying to wade through the long Web pages was a cumbersome task, so Vogin directed the creation of unique searching capabilities based on VAI's software. "Vanguard came up with nice criteria to narrow the searches," Vogin said. "When customers are searching, they are online on our AS/400 looking for the items. It's a big benefit because if you have any price changes or updates, the e-commerce site is also updated."
A key element in Michell's sales and distribution process involves the access of order information by customers, vendors, and its sales force. Initially the system implemented all records on paper, but Vogin had Vanguard integrate a new solution soon after the transition period. "We had the computer automatically generate four different pieces of paper," Vogin said. "Then I couldn't take the sea of paper anymore and I looked into a software package from American Presence, which allowed Vanguard to adapt the orders from our printer spool files to a fax output."
New Sprouts
Recently, Vogin started the next phase of the program -- converting Michell's customers from faxing to e-mail. New when an order is generated, the software looks to see if the customer has an email address and prioritizes the confirmation for email.
Confirmed seed orders move on to distribution, where VAI's ERP software generates barcodes and pick tickets for the warehouse. The order is moved to another station for a final confirmation on the quantity, and a packing slip is generated.
"Shipping accuracy and inventory have improved tremendously," Vogin said. In fact, after using VAI's S2K Enterprise ERP software for more than two years, Vogin has seen improvements across all of Michell's operations.
"Before the new system I had a staff of 13 people in the IT department," Vogin recalled. "Today I have a staff of three -- a network administrator/PC specialist, a daily operations person that deals with the issues concerning VAI software, and a support person that assists both."
The benefits also have extended beyond Michell's headquarters to the desktops of its customers. Customers have told Michell's that they like the convenience of being able to order online and check their order history and shipping status. They can also check credit limits and payment history.
Before automation, an order took 1 ½ days to make its way through Michell's order entry process. Now the S2K Enterprise ERP software checks credit, confirms availability, acknowledges the order, ships what is available and enters back orders, all within minutes. The acknowledgement can be emailed, faxed or posted. Billing occurs automatically as soon as an order is shipped. And finally, the charge information is routed to accounts receivable where the customer's account is updated.
"Sales have increased," Vogin said. Much of that increase is attributable to the fact that the order-entry automation and customer self-service has freed Michell's sales reps from time-consuming paperwork and increased their sales productivity. All told, Michell's rate of sales growth in the last two years has doubled that of the previous four years, and sales for the last fiscal year grew by 20 percent.
Vogin expects Michell's sales to continue growing and plans to upgrade the company's AS/400. "We've already upgraded our AS/400 from a 620 to a 720," he said. "With the combination of Lotus Notes, Web site hosting, and e-commerce, we've outgrown it."
For more information about VAI’s ERP software solutions, call VAI at 1.800.824.7776 or email sales@vai.net.
