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e-Business in the chemical, rubber and plastics industry5.8 Unicorn Ltd. (The UK)AbstractUnicorn Chemicals is a company specialised in supplying manufacturing chemicals tothe automotive and utilities sectors. Its advantage stems from developing andmanufacturing highly specialised solutions, which address particular customers’ uniqueneeds. The firm realised that knowledge about customers’ problems combined with theknowledge of their purchasing patterns could generate cross-selling opportunities andincrease revenues. However, its existing accounting system was unsuitable to supportthis. Thus, in 2003, the company decided to replace it with a new businessmanagement software. The system benefited the firm by helping it to reduce inventorylevels and purchasing costs and to generate additional revenues.Case study fact sheetFull name of the company:Location (HQ / main branches):Main business activity:Year of foundation: 1971Number of employees: 15Turnover in last financial year:Primary customers:Most significant geographic market:Main e-business applications studied:Case contact person(s):Unicorn Chemicals Ltd.Blackpool, UKManufacture of lubricants and specialised chemicalsolutions€2.2 millionCompanies in the automotive and utilities sectorsUK / EuropeICT for management support, impact on productivityMr Tim F. Kilpatrick, Managing Director5.8.1 Background and objectivesEstablished in 1971, Unicorn Chemicals is a small company based in Blackpool, UK. Itspecialises in manufacturing and supplying chemicals mainly for the automotive andutilities sectors. Its share in the UK market is around 3%. In contrast to many companiesfrom the chemicals sector, Unicorn Chemicals’ advantage does not rest in its scale ofoperations. Instead of producing chemicals in large quantities, it focuses on manufacturinghighly specialised solutions, which address unique problems of particularcustomers. Then, after formulating a chemical solution, it produces and delivers it in smallquantities.Unicorn Chemicals’ business model requires from it to closely cooperate with itscustomers in order to understand their problems and needs. To meet this requirement,Unicorn Chemicals dedicates considerable technical support devoted to working in closepartnership with its customers and suppliers to identify requirements and specifysolutions. Over the years, this approach allowed the company to develop a broad rangeof unique specialist products and solutions.One of the most challenging issues Unicorn Chemicals faces when operating this way isthe need to understand its customers. Extensive knowledge of customers’ problems doesnot only allow the firm to develop appropriate solutions, but to generate and benefit from177
e-Business in the chemical, rubber and plastics industrycross-selling opportunities. This, in turn, translates into higher revenues and,consequently, growth.5.8.2 e-Business activitiesIn early 2003, Unicorn Chemicals realised that its accounting operations were inefficientfor two reasons. First, the existing accounting system, TAS Books, was becomingincreasingly unstable and unsuitable for the company’s requirements. Second, becausefinance functions were outsourced, the firm felt that it did not have accurate and up-todateinformation on its business. Consequently, it realised that it was missingopportunities and chances for growth. To address this issue, Mr Tim F Kilpatrick, UnicornChemicals’ Managing Director, decided to look for new applications, which “would allowthe firm to track customers’ purchasing profile, industry analysis and control stock.”System selectionWith the above in mind, Mr Kilpatrick began to scan the market in search for a suitableapplication that would replace the legacy system and help the firm develop a betterunderstanding of its customers and the solutions they buy. He knew that a number of itscustomers used standardised industry applications developed by SAP. In the course ofinformal talks with their representatives, he asked about their experience with the solutionthey used. Having gathered positive feedback, he contacted an SAP representative witha request for detailed information.The interest in SAP software was strengthened by its proliferation in the chemicalsindustry. Thus, taking into account interoperability issues, the firm wanted to operate anapplication that has acceptance by its customers. “Regarding our company support of theintegration of companies into our business with the help of ICT, as a small organisationwe generally respond to our customers’ requests and let them take the project lead,” saysMr Kilpatrick.The firm signed a contract with Yuma, a local SAP implementer, for implementing SAPBusiness One ERP and CRM modules. Although the system’s modules cover nearly allbusiness activities ranging from finance to human resource management, UnicornChemicals opted for a version that would match their immediate needs. Consequently,the primary focus was on supporting inventory management and sales and purchasingactivities. Despite the fact that such modules as sales opportunities or production wereequally attractive and appealing, the firm took a thoughtful approach and decided to waituntil it had developed a concept to effectively use them and integrate into its business.Implementation process and system costThe implementation team had to install the application within a very short period of time.Because the financial year began on the 1st of October, Unicorn Chemicals insisted thatthe system went operational by then. Thus, considering that the implementation workbegan only a few weeks before, the time schedule was extremely tight.Beginning in September 2003, the system provider implemented the software within 3weeks. During this time three IT specialists worked at Unicorn Chemicals’ premises andaccomplished the following tasks:System configuration,178
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