Having achieved a figure above the industrial average in turnover-per- employee thanks to fast and consistent growth, Merkez Motor prefers Microsoft Dynamics NAV and its business partner 6 Gen in order to improve the risk management and centralize the corporate data.
Merkez Motor Makina San.ve Tic. Ltd. Şti. is founded by Emre Tavman in 1997 as a sales and marketing company providing electrical motors. It sustained its growth especially by exclusive dealership of WAT branded industrial motors manufactured by Arçelik. Introducing into the market other products not marketed by Arçelik by procuring them from other suppliers, Merkez Motor became one of the largest electrical motor and reducer sales companies in Turkey with its experience of over 10 years and quality. He made the exclusive dealership agreements with leading companies in electrical world of German and other European countries.
With Kerim Koç becoming a partner in 2000, Merkez Motor founded the Marble sales company, Sermeks and Dinamik Motor A.Ş. in 2006 in Ankara, where it is an exclusive dealership of Arçelik. Sustaining its fast growth, company reached a turnover of 20 million TRY with 22 employees.
State of Business
A company of three persons at the beginning, Merkez Motor has grown fast even in the unstable economic conditions. Especially after foundation of Sermeks and Dinamik Motor, company starts to experience difficulties in either inventory follow-up and customer services due to lack of a centralized system. Existing accounting software and Excel files created by employees for their own needs become time-consuming and caused errors, which are helplessly used for following up 6 thousand inventory item and 3 thousand customers and for endless revisions required by customers especially in reducers. Furthermore, Mr. Tavman sums up those old days as “I had a great difficulty in following up the works. I could not see who placed orders, which is available in the inventory and which are expected. Just only after delivery note is issued, a record is created in the system and could use data in the system following the shipment.”
Also, as trade volume grows, the problems in following up products and customer profitability and especially trading between Merkez and Dinamik Motor could cause difficulties. It was also not easy to calculate profitability by looking at the whole trading of the same customer in three companies. Despite of concerns of top management and among employees in being not yet ready to migrate in the ERP, Mr. Savman wisely considered that “Just as death is an earlier event for everyone, migration to ERP is also always earlier for companies. We will never feel ourselves fully ready.” and decided on migration to a common database and deployment for all three companies without waiting no more and gave the start signal for ERP selection works in 2009.
Solution
The first important criteria for ERP for Merkez Motor was the capability of the consultancy firm to make agreement over turnkey price in order to manage the risks better. Placing less importance on the functionality in terms of the management of the processes, firm had hard times to decide on whether using global or local software. Although they thought that local software is very powerful in terms of the accounting and respond faster to the general applications, they also considered that global software will be greatly advantageous once company expands into neighboring countries as a result of growing business.
For Mr. Emre another important decision was the selection of a business partner. Since easy communication with business partner will directly have an impact on easy understanding between company personnel and consultants, accurate analyses, accurate satisfaction of additional requests, it is an important factor in achieving success.
As a result of all these criteria and presentations on the solution, Merkez Motor decided on working with 6 Gen, business partner of Microsoft Dynamics NAV, and Microsoft Dynamics NAV (Navision). Seasonedly experienced in the field and hosting additional solutions for agile firms like Merkez Motor, 6 Gen implemented all processes to go into live production in a short time such as 45 days with NAV extension developed with the industrial and product insight that 6 Gen has. With a parallel implementation for one month, users are familiarized with the system. As of January 2010, company as a whole started to use Microsoft Dynamics NAV
In the first months of 2010, upon removal of the errors coming alongside with older data after migration and satisfaction of the additional requests emerged during the deployment, Microsoft Dynamics NAV became the one single data source of Merkez Motor.
Advantages:
Instant Access to Corporate Data
Merkez Motor reached the levels that are desired in continuity and consistency of the customer services, which is an important issue for the firm, after the deployment of 6 Gen extensions of Microsoft Dynamics NAV. Mr. Tavman highlights his satisfaction as “In our banks, even if our customer representative is replaced, new representative becomes knowledgeable about our operations in the next day. But it was taking too long for us for a new recruit to become knowledgeable about our operations. Now we have the same system that I have always admired for. All customer related data, older orders, current orders, orders in shipment, payments and invoices in progress etc. data are now available for anyone authorized. And no vacancies, no personnel sick leaves now causes any customer dissatisfaction no more. This is a turning point for us.”
Improved Customer Service Quality
Having all data easily accessible and in a centralized system enabled us to improve our customer service quality. It is possible respond to customer requests instantly. Inventory, shipment reservations in inventory, missing materials from customer orders and estimated inventory incoming dates are easily seen. And such data are available to anyone authorized. Mr. Tavman says “once we receive a call from our customers, we are able to answer them instantly. It is very nice to answer them without needing to call customer representative, warehouse or shipment colleagues. I feel the proud of applying in my office, too, the banking systems that I have admired for long years.”
Mr. Emir, 6 Gen project manager and managing partner says “During the processes of receiving sales order, transferring it to the company units and shipment execution, some errors could be made due to separate entry and processing of the data each time. Especially, since marble has many detailed materials, orders are transferred to the suppliers in Excel or Word files. And this could cause problems in some detail materials. With the migration to Microsoft Dynamics NAV, the same order placed by the customer is being delivered to supplier and the same data is being used at any stage of the system. Both suppliers and warehouse and shipment employees can see order contents as it received from the clients. Thus, no order errors occur arising out of the data errors And also chance of return and new product shipment costs and most importantly prestige loss in the eyes of the customers are avoided.
Elevated Control
Mr. Tavman says that he was very concerned the fact that he, as an business owner and top manager, was able to make some queries only after the delivery note is issued. He also states that he bothered in not having an answer to questions such as which customers placed an order request and how such requests are responded and did customer receive the orders in the former system. To be present in the company every moment, to have meetings repeatedly with employees or prepare some reports resulting in longer overtimes in order to ensure the control have negative implications on the company efficiency. However, after the new system, top management is completely hands-on the requests from customers, offers delivered and orders placed. Mr. Tavman understood better such convenience brought by the system during a abroad trip. “I went to Korea in February. I connected to the system thousands of miles away and queried the system to see what we sold to whom today. Once I saw sales are good, logged out the system and had the visit with a peace of mind” and Mr. Tavman adds that his biggest ideal is to see that everything remains in the same order while he is away the company. He highlighted that contributions of Microsoft Dynamics NAV and 6Gen team is the biggest step taken to reach that aim.
the biggest step taken to reach that aim.
Risk Management
Underlining that the former system was a simple accounting system, Mr. Tavman says that as an entrepreneur his main concern is to manage the risks. Not being able to see costs and profitability on the product and customer basis poses a unmanaged risk. In the former system where 3 companies are isolated each other, it was not possible to see the profitability or total receivables from a customer by looking at its trading with these three companies. But thanks to Microsoft Dynamics NAV, such difficulties are now a matter of history. Even if a customer does not have receivables in one company, and since it is possible to see receivables in other companies, the risks such as shipping products to customers with bad debts are eliminated.
With 6 Gen extensions, different credit limits for different payment methods are defined for each customer. Total customer risk is defined by establishing different limits for each company, total check-note, own and customer checks. Thus, risky receivables are minimized.
Many different discounts applied to the dealers could pose risk of the sales below costs since they could not be followed up with their related costs in the former system. In addition, it is also possible to see situations such as discount over total amounts for some products, dealer discount, payment discount and repayments over total year-end turnover. After such many discount applications, it could sometimes possible to have dealer sales price below the purchasing cost of the product. In the new system with 6 Gen extensions, cost of the products are calculated by the system and it is automatically compared with the final price on each order line basis. Thus, if it goes below the costs, then user is warned. As a result, it is avoided for Merkez Motor incurring a damage or loss due to discounts applied at different criteria and times in any sales.