Executive Briefings

Company Size Doesn't Always Dictate Supply-Chain Complexity

A mid-sized manufacturer and distributor of industrial seals struggles with short lead times, a varied product line and the need for excellent customer service.

You don't have to be in the Fortune 500 to have a complex supply chain. Sealing Devices, Inc. has revenues of less than $100m. Yet it's both manufacturer and distributor, has inside and outside sales forces, services 12,000 customers, offers more than 165,000 items, and makes a product that is priced like a commodity but can, if defective, cause the failure of everything from industrial machinery to multimillion-dollar satellites. All of which adds up to a huge challenge in the area of customer relationship management (CRM).

Lancaster, N.Y.-based Sealing Devices sells electronic seals, gaskets and sealants. Founded in 1963, the company is still privately held and family owned. Its products can be found in pumps, compressors and airplanes, among other industrial and aerospace uses. Customers are mostly original equipment manufacturers (OEMs).

Components often must be configured for specific uses. But order lead times can be alarmingly short. "The last thing [customers] think about is the seal or gasket," says information technology director Patrick Harris. "It's one of the lowest-cost items."

Consequently, Sealing Devices must know which raw materials to keep in stock. And it must have a good, clean record of all customer accounts. Until a few years ago, that wasn't the case.

To manage the customer record, the company had been relying on a combination of Lotus Notes for contact management and an enterprise resource planning system from Symix (now part of Mapics Inc.). There was no specific CRM functionality. As a result, Sealing Devices was plagued by overlapping and incorrect data, spread across multiple systems. Price quotes took too long and were based on wrong information. And valuable sales leads were getting lost in the shuffle.

Ironically, the impetus for change came from the current systems provider. Symix wanted to dump the old "green-screen" look and go with a graphical user interface, an easier way of managing complex customer data. Sealing Devices was all for it-but used the opportunity to look at other vendors. To stick with Symix, yet obtain CRM, would have meant acquiring a separate system that didn't even reside on the same server as the ERP. Says Harris: "It was going to cost us quite a bit of money."

Picking a New Vendor
Instead, Sealing Devices went with Redwood Shores, Calif.-based Oracle Corp., largely because the vendor had multiple systems that could work in harmony. In addition to CRM, the company picked up Oracle applications for ERP, financials and electronic commerce.
Sealing Devices had been running some 27 different administrative systems, many of them outmoded and legacy-based, says Robb Eklund, Oracle's vice president of CRM product marketing. Accounts receivable, bid quotation and the tracking of customer contacts were all on different platforms. The problem, he says, lay in "defining and understanding customers consistently across their business."

Time was of the essence. Sealing Devices was in the midst of a rapid transformation from pure distributor to manufacturer. E-business and the internet were emerging as critical tools for ordering and customer care. With company revenues flat, CRM was one way to stand out in an increasingly competitive marketplace.

The company opted for an all-at-once approach to implementation. It purchased the Oracle eBusiness Suite in March 2001. By December 2002, it had gone live with more than a dozen applications, including such CRM-related tools as TeleSales, Sales Online, Order Capture and Customers Online. At the same time, it switched on systems for ERP, business intelligence, order management, manufacturing and financials.

Harris assigned project leaders in each of three major categories: financials, ERP and CRM. The new systems let managers enter information on billing, shipping and contacts in one place, creating a database accessible to all applications. For the first time, Sealing Devices had clean, consistent data about 10,000 companies, 25,000 individual contacts and 19,000 addresses. And it had instant access to all business conducted with a given customer.

The result was a savings of 20 days a year in IT labor required to launch marketing campaigns. Sales productivity rose 20 percent, thanks to the elimination of multiple data entries. Quote-maintenance costs fell 66 percent. And Sealing Devices was able to fulfill customized orders on the same day they were received.

Customer leads become easier to manage as well. Prior to the CRM implementation, sales staff wasn't required to record all opportunities. "They were confident that they knew what was going on," says Harris. But top management didn't know how many potential dollars were on the table at any given time. It suspected that many good opportunities were being lost.

The sales force resisted the new software, fearing it was nothing more than a device for monitoring staff performance. It viewed the additional reporting requirements as a waste of time that was better spent on the road or speaking with customers. But Harris and his project managers pushed the new system through all the same.

They were vindicated by the results. Sales came to realize that many good opportunities had never been pursued. By the end of the second year of using the software, salespeople were entering 37 percent more opportunities a month than in the first year, Harris says. Total opportunities were up by 66 percent.

Even more important to Sealing Devices was a 12-percent rise in revenues-something Harris attributes in large part to the new technology and business processes, given a lack of growth in the market. He expects the company to do even better in the year to come.

You don't have to be in the Fortune 500 to have a complex supply chain. Sealing Devices, Inc. has revenues of less than $100m. Yet it's both manufacturer and distributor, has inside and outside sales forces, services 12,000 customers, offers more than 165,000 items, and makes a product that is priced like a commodity but can, if defective, cause the failure of everything from industrial machinery to multimillion-dollar satellites. All of which adds up to a huge challenge in the area of customer relationship management (CRM).

Lancaster, N.Y.-based Sealing Devices sells electronic seals, gaskets and sealants. Founded in 1963, the company is still privately held and family owned. Its products can be found in pumps, compressors and airplanes, among other industrial and aerospace uses. Customers are mostly original equipment manufacturers (OEMs).

Components often must be configured for specific uses. But order lead times can be alarmingly short. "The last thing [customers] think about is the seal or gasket," says information technology director Patrick Harris. "It's one of the lowest-cost items."

Consequently, Sealing Devices must know which raw materials to keep in stock. And it must have a good, clean record of all customer accounts. Until a few years ago, that wasn't the case.

To manage the customer record, the company had been relying on a combination of Lotus Notes for contact management and an enterprise resource planning system from Symix (now part of Mapics Inc.). There was no specific CRM functionality. As a result, Sealing Devices was plagued by overlapping and incorrect data, spread across multiple systems. Price quotes took too long and were based on wrong information. And valuable sales leads were getting lost in the shuffle.

Ironically, the impetus for change came from the current systems provider. Symix wanted to dump the old "green-screen" look and go with a graphical user interface, an easier way of managing complex customer data. Sealing Devices was all for it-but used the opportunity to look at other vendors. To stick with Symix, yet obtain CRM, would have meant acquiring a separate system that didn't even reside on the same server as the ERP. Says Harris: "It was going to cost us quite a bit of money."

Picking a New Vendor
Instead, Sealing Devices went with Redwood Shores, Calif.-based Oracle Corp., largely because the vendor had multiple systems that could work in harmony. In addition to CRM, the company picked up Oracle applications for ERP, financials and electronic commerce.
Sealing Devices had been running some 27 different administrative systems, many of them outmoded and legacy-based, says Robb Eklund, Oracle's vice president of CRM product marketing. Accounts receivable, bid quotation and the tracking of customer contacts were all on different platforms. The problem, he says, lay in "defining and understanding customers consistently across their business."

Time was of the essence. Sealing Devices was in the midst of a rapid transformation from pure distributor to manufacturer. E-business and the internet were emerging as critical tools for ordering and customer care. With company revenues flat, CRM was one way to stand out in an increasingly competitive marketplace.

The company opted for an all-at-once approach to implementation. It purchased the Oracle eBusiness Suite in March 2001. By December 2002, it had gone live with more than a dozen applications, including such CRM-related tools as TeleSales, Sales Online, Order Capture and Customers Online. At the same time, it switched on systems for ERP, business intelligence, order management, manufacturing and financials.

Harris assigned project leaders in each of three major categories: financials, ERP and CRM. The new systems let managers enter information on billing, shipping and contacts in one place, creating a database accessible to all applications. For the first time, Sealing Devices had clean, consistent data about 10,000 companies, 25,000 individual contacts and 19,000 addresses. And it had instant access to all business conducted with a given customer.

The result was a savings of 20 days a year in IT labor required to launch marketing campaigns. Sales productivity rose 20 percent, thanks to the elimination of multiple data entries. Quote-maintenance costs fell 66 percent. And Sealing Devices was able to fulfill customized orders on the same day they were received.

Customer leads become easier to manage as well. Prior to the CRM implementation, sales staff wasn't required to record all opportunities. "They were confident that they knew what was going on," says Harris. But top management didn't know how many potential dollars were on the table at any given time. It suspected that many good opportunities were being lost.

The sales force resisted the new software, fearing it was nothing more than a device for monitoring staff performance. It viewed the additional reporting requirements as a waste of time that was better spent on the road or speaking with customers. But Harris and his project managers pushed the new system through all the same.

They were vindicated by the results. Sales came to realize that many good opportunities had never been pursued. By the end of the second year of using the software, salespeople were entering 37 percent more opportunities a month than in the first year, Harris says. Total opportunities were up by 66 percent.

Even more important to Sealing Devices was a 12-percent rise in revenues-something Harris attributes in large part to the new technology and business processes, given a lack of growth in the market. He expects the company to do even better in the year to come.