Stock control

Deploying a solid financial management platform frees up Fleetwood's funds for growth.

Driven by a string of acquisitions and the need to reduce stock, Fleetwood Corporation has been working on a new manufacturing and financial management system to support its future expansion.

Based in Perth, Fleetwood manufactures and sells a range of caravans and transportable homes, and manages a chain of holiday parks. Over the last six years the company has been steadily growing through acquisition, adding six new businesses to its portfolio, including Hertz Campervans in 1997, Coromal Caravans in 1999 and in 2000, caravan components manufacturer Camec and Flexiglass Challenge, manufacturers of fibreglass canopies. But through the acquisitions, the company has also been inheriting a large collection of disparate systems.

"As we acquired each business, we took on their existing control system and most retained their existing management, so up until 12 months ago we had five different financial packages in use throughout the group and with that, came five different software vendors and there was no economy of scale in that at all," says Fleetwood's group financial controller, Brad Denison: "A couple of our divisions had manufacturing operations and we didn't really have a very strong manufacturing product anywhere in the group. The small companies were using in-house developed packages or just off-the-shelf packages such as Excel spreadsheets and Access databases that were supported by various home made databases to control their manufacturing."

For Denison, the key was to replace all of that with one package that was particularly strong in supply chain management, to allow for more effective and efficient reporting. Based in Perth, Fleetwood is a publicly listed company with annual revenue of $160 million and 650 staff across the group. It has offices in Adelaide and Melbourne and sites in every state in Australia, as well as New Zealand.

Denison needed to find a software solution that would not only work across the group, but also it had to do two things. Firstly, the system had to ensure that Fleetwood's management had access to consistent and timely financial information and it had to be able to manage the operational activities of a number of operating entities that had, in many cases, slightly different requirements.

Although none of the newly acquired businesses were large companies, each company had its own unique requirements in terms of the way its financial systems needed to be set up and in particular, the way in which Fleetwood's manufacturing system needed to be set up to accommodate those businesses. Therefore, Denison wanted to find a financial software package with a business management application that could be integrated into a full manufacturing, distribution, e-commerce and CRM solution.

Consolidating finances

Taking nine months to install, Microsoft Business Solution's Navision was chosen to streamline reporting across Fleetwood's different business units. To date, Navision has been used as a pilot across three divisions; Coromal Caravans (the second largest manufacturer of caravans in Australia); parks and the parent company Fleetwood Corporation, with full implementation across the whole group set for 2004: "We basically used the software vendors to help us with the pilot and really to educate our own team. We're now rolling out the software ourselves to all of the other divisions."

Denison expects to see a return on his investment within five years, which should free up funds for other activities. "There are potential economies of scale by getting one software package right across the group. In fact, the reduction in stock from just two of our major manufacturers will probably pay for the entire project within five years: "But the greatest benefit in bringing all of your systems together in to the one over-riding package is that it forces your people to be both independent and inter-reliant on one another - it actually makes a much tighter control to the overall organisation; for example, if the purchasing manager's decisions about what to purchase are dictated by how well the production manager has done his production scheduling, the organisation as a whole is likely to benefit because the purchasing guy is more confident about holding less stock."