Precept Ministries International (Precept) is a 30-year-old ministry with over 220 employees worldwide. Precept produces and publishes books, tapes and study guides for Bible study. Other publishers� Bible study materials are also distributed globally through Precept�s catalog and bookstores. In addition, Precept provides services through institutes of training and conferences conducted at both the Precept headquarters in Tennessee and at locations around the world.
Precept�s management faced serious and growing challenges in achieving timely and cost-effective order fulfillment. With its global distribution and broad range of fast-moving products, existing systems consistently failed to deliver. In its effort to enhance competitiveness, enable continued growth and reduce operating costs, Precept worked with CGW to implement the Enterprise One (E1) WMS and Enterprise One+ (E1+) fulfillment system. As it turned out, the E1 system provided a key part of the solution, but the scope of the project ultimately encompassed the entire organization and its information system infrastructure.
The Challenge
The project team quickly learned that problems identified in order fulfillment and customer service were symptoms of challenges in other parts of the organization. It was clear that a first-rate WMS and fulfillment system would pay large dividends, but it was also clear that there were necessary improvements on a much broader scale. With the realization that a broader project scope would be required to ensure long-term success, Precept contracted with the consulting division to deliver a total systems and organization analysis. The team identified major challenges and delivered solutions in several key areas.
Order Management
Precept management recognized that centralizing control of order processing would pay dividends in terms of efficiency and customer service. But they needed assistance in planning and implementing necessary changes. The project team worked closely with both the shipping department and with operating department managers, some of whom had assumed independent responsibility for processing and fulfilling certain orders. Common ground was identified, redundant processes were eliminated, and a new centralized order processing system was designed to meet the requirements of the entire organization.
Inventory Management
Because each operating department fulfilled some of its own orders, each department also maintained some of its own inventory. Department managers thought this was necessary to satisfy their segments of Precept�s customer base. Products were often ordered and controlled in a decentralized manner, and proper documentation was not always maintained, resulting in growing inaccuracies in Precept�s central inventory, costly and ineffective replenishment activities and duplication in labor costs.
Solving these problems required more than a technical approach. Again, the total solution approach adopted by Precept paid large dividends for the organization. The project team was able to address inventory management processes and organizational structure issues at the same time that technical decisions were being considered. Nothing regarding inventory and order fulfillment was addressed in isolation. As a result, Precept was able to fully implement the necessary centralization through a combination of structural adjustments, business process realignment and education of staff.
Purchasing and Vendor Relations
Purchasing operations were far from adequate. Autonomy among operating departments and an array of manual posting after the fact precluded accurate company-wide visibility of inventory and also precluded effective analysis of inventory requirements. Last minute requests and inadequate projection of requirements stressed vendor relations. And purchases were too often received without item numbers, cost information, selling price and related information. It was often unclear which department had placed the order, and valuable time and energy were wasted attempting to run down necessary information. The situation contributed to sub-optimal discounts from vendors, inefficient receiving operations, inaccurate accounts payable records, excessive handling of material and erratic payments to vendors.
The purchasing function suffered from poorly functioning software, inconsistent tracking of information and involvement by too many staff members. While the new accounting and related systems would go a long way toward resolving problems in the purchasing process, fortunately for the organization, Precept management had opted for a solution that allowed re-engineering of organizational structure as well. With the active participation of Precept�s purchasing staff, the project team used the total solution, integrated approach in making both organizational and system changes required to ensure a first-rate, effective purchasing operation.
Customer Relations
The ultimate impact of all of the problems was on customer relations and on bottom-line performance. Orders could not usually be shipped the same day they were received because of real or perceived inventory shortages. So the shipping department constantly struggled with manual procedures in an attempt to determine which orders could be shipped to best avoid back orders. Further, data entry was fragmented, quality control varied, duplication was abundant, and general confusion prevailed for both the staff and for customers. It was not unusual for customers to receive incorrect shipments or to receive products under different customer numbers. Additional customer relations problems were caused by duplicate monthly mailings.
The multiple methods of order entry, fulfillment, shipping systems and inventory management resulted in critical information about customers, products and order status being spread among departments. Responding to a customer�s question could require the involvement of several departments, all of which might have some piece of the required information. Customers were constantly placed on hold for extended periods while operators searched for information. Even worse, departments inevitably had different answers to the same question.
Choosing the Right Partner
The net result was that the organization was expending so much energy and was so distracted by trying to manage inadequate systems and control existing business that it could not grow. Even worse, it was not able to effectively sustain business volume at its existing levels. The more the organization attempted to accomplish, the more costs escalated, and the more the bottom line suffered. Precept had reached a point of diminishing returns. In the struggle to deal with immediate problems caused by inefficient business processes and inadequate management information systems, strategic planning and technology planning took a back seat.
Precept�s management took the prudent comprehensive approach of partnering with a qualified complete solution provider as opposed to a software vendor without the expertise and staff to address issues across the organization. Precept and CGW, in concert, squarely confronted the strategic requirements of the organization. By doing so, they delivered a solution that left no stones unturned.
Precept�s ultimate challenge was to integrate all the departments of the organization onto a single system. The first link in the integration process was to give customer service the visualization of order status and inventory levels. This visualization and collaboration of information would enhance the company�s ability to better serve its customers. The next link in the integration process would streamline the exchange of information from the shipping department to all the other supporting departments.
The order-fulfillment process was another bottleneck in the system. Originally, it took about two weeks to process an order. Customer service was not sure if sufficient inventory was available to fulfill the order, and the warehouse was not sure where the inventory was located. With the implementation of E1 Inventory and Fulfillment Manager, total order and inventory visibility could be achieved. Now customer service can see the status of the orders all the way through the system and be sure that product is available to fill the orders.
Once the fulfillment process was complete, E1 Shipping Manager took over and completed the order transaction. In this process, E1 would capture the weight and package number in the system. The appropriate carrier and rate would then be selected. The carrier label and the package contents label would then be printed. The system would then interface shipping details of the order back to the Solomon where an invoice would be prepared. All of these transactions would be completed in a real-time manner.
This one step enabled Precept to streamline the shipping process to increase productivity and also enable the company to increase billing accuracy and efficiency.
For more information, please contact Stratix Corporation by phone at 800-883-8300.
With the implementation of E1 Inventory and Fulfillment Manager, total order and inventory visibility could be achieved.