Microsoft Aims at Enterprise App Market

The 1980s and ’90s saw an explosion of business applications to digitize

the way companies do business. Software developers built Enterprise

Resource Planning (ERP), Customer Relationship Management (CRM) and

Supply Chain Management (SCM) suites by the score to eliminate

paper-based administrative processes, and provide management with

accurate data. Firms like SAP, Siebel and Oracle thrived in this new

environment.

Now Microsoft Corp. is intent on moving into this lucrative turf. Through

a combination of acquisition and in-house development, the software giant

is broadening its Microsoft Business Solutions portfolio.

”Microsoft is making headway into the enterprise application space,”

says Paul Hamerman, vice president of enterprise applications at

Forrester Research, Inc. of Cambridge, Mass. ”It acquired ERP vendors

like Great Plains and Navision and has been steadily growing its revenues

in this sector.”

According to Hamerman, however, Microsoft still only accounts for about

four percent of the business application market. German ERP powerhouse

SAP, on the other hand, has a 35 percent to 40 percent share within the

ERP market alone.

Microsoft plans to narrow the gap with a little help from its friends.

”Partnering on government, retail and manufacturing applications has

worked well for Microsoft,” says Hamerman. ”Microsoft assists other

ISVs to offer both stand-alone Windows-based tools, as well as

applications that extend the range of products like Great Plains.”

Windows in the Warehouse

In warehouse management, Microsoft Dynamics GP (the new name for Great

Plains) offers some inventory functionality. While that may be enough for

some companies, it falls short for organizations that live and die by

inventory efficiency. Industries, such as produce or liquor suppliers and

other distribution-intensive fields, require a full-featured warehouse

management system (WMS) as the backbone of their business. It’s in

specialized niches such as this that Microsoft partners can offer the

most assistance in popularizing the Windows platform as a business

application staple.

Motek Inc. of Beverly Hills, Calif., for instance, offers Priya WMS, a

Windows-based warehouse management system tailored to the needs of the

warehousing and distribution field. Four Seasons Produce Co. of Ephrata,

Penn., uses this tool to store, track and deliver more than 11 million

cases of food, produce and other goods each year throughout the Eastern

seaboard.

The company began the implementation of Priya last year to combat

inefficiency. Over time, IT workers there had added additional warehouses

to cope with double-digit annual growth. Finally, the company had five

facilities within a 10-mile radius — four for storage and one for

shipping.

”Our biggest hassle was caused by transfers between buildings,” says

Heath Johnson, director of IT at Four Seasons. ”Every night we had to

move goods to the main facility so they could go out the next morning. As

well as being inefficient, this added greatly to our costs.”

To make matters worse, Four Seasons had to track goods and inventory

manually. This meant keying in every item received and shipped, and

applying labels to every box by hand. With so many transactions taking

place, the company suffered from significant errors. It wasn’t uncommon

to lose track of whole pallets of produce, which ate into profitability.

Four Seasons opted for a set of best-of-breed tools, including Priya WMS

by Motek; a radio frequency (RF) system by Symbol Technologies Inc. of

Holtsville, N.Y., and a hands-free voice-based picking system by

Vocollect Inc. of Pittsburg, Penn. These applications are mainly hosted

on servers running the Windows 2000 Server.

In addition, the company decided to consolidate its five dispersed

locations into one central building. It embarked upon the construction of

a 262,000-square-feet warehouse facility and headquarters complex.

However, Four Seasons couldn’t wait for the construction to be completed

so it attempted to deploy the new warehousing systems at five locations

at one time.

That proved to be too much, too soon.

”We underestimated the amount of training, process revision and manpower

required,” says Johnson. ”We needed more time to make the system

efficient in one warehouse before rolling it out to the others.”

Increased Efficiency

Within six weeks, the company had successfully implemented Priya at one

location, and had eradicated various RF handset bugs. That led to further

projects over the next few months to add the WMS to additional buildings.

”Our success in one facility gave us the foundation to cross-train other

staff,” says Johnson. ”We rotated staff through the successful WMS

warehouses to build their confidence and prepare for the rollout.”

The new system tells the product selectors (known as pickers) where to

go, validates the location, and directs what quantity to pick. Instead of

having to look at a screen or label, the picker has both hands free and

hears the commands via an earpiece. After each pick, he says what has

been picked. This method has significantly enhanced selection accuracy

and productivity.

Since Priya’s full implementation, the produce company has achieved some

spectacular results: 63 percent reduction in inventory picking errors

(now only 12 in 10,000 cases picked); 38 percent increase in selector

productivity; 22 percent reduction in lost sales due to errors; and a 64

percent reduction in hours spent on inventory control

”We used to pick 155 to 160 cases per hour and now it is up to 220 cases

per hour,” says Johnson ”We also have accountability and traceability

right down to the loading dock and truck so we can detect the source of

any errors.”

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