ICT and e-Business Impact in the Furniture Industry - empirica

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ICT and e-business impact in the furniture industrycould also easily be configured according to the company’s requirements. ‘’MicrosoftNavision was chosen as a right solution for a number of reasons - states companydirector, Ian Sonders. Firstly it is a well known business solution for small and mediumenterprise. Secondly, we liked the fact that it was Windows based and fully integratedwith other popular applications used worldwide. This was an important point since fewpeople would need intensive training on a product as familiar as for example MicrosoftExcel and Word. Furthermore, the ability of the system to grow and adjust to our needswas very important. Additionally, purchasing a widely-used system eliminated most of thetechnical support cost’’.Implementation of the chosen solution started in 2000 when the company was in its startupphase. The founders firstly invested in a basic version of the software and themodules were added along with the company’s development. The Navision applicationsprovided Home Base from the start with an integrated system that includes financials,order processing, and warehousing and client management also with support for webportal. The implementation and usage of the ICT has been from the start an integral partof the company’s business plan. The technology tools were chosen and wereimplemented at the beginning of Home Base’s existence but with a defined vision for thefuture. Despite the investment cost of over 30k Euros, the founders of the company wereconvinced that only with the help of a good software package they would be able to startbusiness and solve many problems in the long term, especially as they were planninginternational operations. ‘’The return on investment was not the most important; wewanted to use IT to gain competitive advantage in the industry and have an efficient toolfor solving problems should they arise’’, says Mr. Ian Sonders, Home Base director andco-founder.The new solution offered integrated business applications that allowed a smallorganization like Home Base to connect its headquarters office with distant customers,suppliers, warehouse and logistic contractors. Communication documents are formattedin industry-standard XML which help interoperability between trading partners and theirsoftware applications even if it is different than Navision. Especially important is thecommunication and interoperability with the logistic and warehouse company that storesand delivers orders to Home Base clients.The modules implemented at Home Base include; financial management, customerrelationship management, distribution and warehouse management, order processing,shipment and delivery, production orders, bill of materials and some analyticsapplications as planning and dispatching and automated data capture systems. Inaddition there is an important commerce gateway portal module to give clients instant24h/7d access to their accounts when they can check the stock available, order on lineand verify status of their orders instantly.The Navision package works also with other widely used Microsoft products such asWindows and Office which permits the system to be interconnected with other users evenif they don’t have Navision but only a simple MS office package. An additional advantageof the adopted solution is the fact that it is based on the user interface of Microsoft OfficeOutlook and this interface gives a familiar working environment. Additionally, the softwareprovides an efficient user centre working screen through the ability to tailor screensaccordingly to job functions and roles. ’Extracting information is made simpler by thesystem and the fact that it's compatible with Windows, means a new user doesn't have tolearn the basics before sitting in front of it,” comments Mr. Sonders.149
ICT and e-business impact in the furniture industryIn addition to the Navision package, designers at Home Base use AutoCAD software tomodify and create furniture designs as well as exchange technical information andpictures between designers, the office and the manufacturing plant. The software helps tovisualize the furniture prototype and put it to test. Firstly, a new piece of furniture iscreated in AutoCAD and then a few prototypes are made and sent to furniture fairsaround the world. If the design is liked by viewers then it goes to full production line anditems are included in the catalogue ready for orders. As the prototype model of furnitureis a very important step towards full production, it is essential to prepare it and modify itquickly. The use of IT tools save time and cost, minimising errors.Overall, the comprehensive package of IT applications enables Home Base to streamlinecommunication with its clients, logistics and manufacturing operations. It allows rapidresponses to emails and requests from all over the world overcoming time zonedifferences, helps planning and executes orders quickly, making the business trulyoperational 24hours a day. For example, when at the close of the office in Denmarkorders are sent to factories in Asia and being produce while the office sleeps and at thesame time queries about stock levels from the USA are getting a response from thesystem.5.10.3 ImpactThe implementation of a comprehensive ICT package like Navision was perceived as anecessary foundation for the Home Base business model. With the help of the ICT toolsthe company increased turnover, reduced the time needed for order processing achievingfaster response times and reduced inventory. It is difficult, in Home Base’s case, toestimate benefits in terms of numbers because there are no times ‘’before’’ and ‘’after’’the ICT implementation. Nevertheless the company’s management reveals that salesincreased 100% in the two first years and have continued to do so at the rate of about30% thereafter, when order processing is at least 50% more efficient than without ICTusage.Without the ICT technology the company’s director believes that they would not havebeen able to grow so fast and compete on the furniture market. The ICT tools have giventhe company a competitive advantage, and brought many benefits to businessoperations, in the following areas:Order tracking Complete detailed and up-to-date tracking of orders, efficient orderprocessing capabilities, stock visibility and the ability to provide accurate informationon product lead times – a feature that would not have been available without amodern integrated ICT business solution.Communication E-communication provides a valuable alternative to a costlypaper-based information exchange like drawings, catalogues, letters, invoices,orders, etc. The company maintains cost savings derived from the elimination ofprinting, postage and overall handling of paper - orders, invoices, catalogues, etc.Costs of this nature could be a significant burden on a small enterprise.Operations Furthermore, e-communication at Home Base overcomes time zonedifferences making possible for the business to continue around the clock. Thisbrings important speed into operations plus savings in time and manpowerdedicated to maintaining communication links.150
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