Skarnes, Inc.

Based in Minneapolis, Minnesota, Skarnes, Inc. distributes material handling products and provides warehouse storage and material handling solutions. Products include casters, conveyors, overhead hoists and cranes, warehouse storage racks, and industrial ergonomic products. Migrating from RealWorld to Microsoft Business Solutions–Navision provided Skarnes with improved reporting capabilities, the ability to track costs, and the ability to view work in process. Even though they don’t have dedicated IT staff, the solution is easily adapted to meet the needs of their company. Elimination of redundant data entry provided a 40 percent reduction in accounting work time. When Skarnes acquired another company, D.L. Systems, they were able to add the accounting for this company into their Microsoft Navision solution within three months without adding additional staff. A 20 percent increase in productivity has been experienced by the company since staff are now free to “better use their talents and creativity.”

Situation

Skarnes, Inc., a third-generation, family- owned business, started in 1923 in Minneapolis, Minnesota. The company has 31 employees. They manufacture and distribute material handling products and warehouse storage and manufacturing solutions, including such items as conveyor systems, storage racks for warehouses, casters, industrial ergonomic products, and overhead cranes and hoists.

Skarnes was using RealWorld software; while appreciating the familiarity they had with this software, they found it to be “somewhat restrictive.” Designing reports was difficult. The solution was character-based and lacked the capabilities of Microsoft Windows®. Since most new employees came to Skarnes having used Microsoft Windows in previous positions, this solution was a problem.

RealWorld also lacked the ability to integrate Purchase Orders (PO) and Accounts Receivable (AR). When processing POs and posting invoices, data had to be reentered into sales orders costing the company extra time and doubling the chance of human error.

It was essential for invoices to be accurate since salespeople were paid commissions based on these figures. The commission structure at Skarnes was changing. The RealWorld solution wasn’t flexible enough to allow for adjusting the percentage paid on commissioned sales to individual salespeople.

Since the financials for each year had to be printed and purged before beginning the next year, reports had to be printed out to preserve the historical data of the organization. Skarnes had three to four dot matrix printers with two dedicated solely to printing reports. This system was noisy and used a lot of paper.

The marketing section of RealWorld solution also lacked functionality. It was difficult to narrow down what products were selling and to whom. This made it impossible to determine what products and lines were profitable without a significant amount of calculation.

Skarnes approached Symbiant Technologies, Inc., their Microsoft reselling partner, about the possibility of changing solutions. They recognized that upgrading their RealWorld software wasn’t the answer; instead they chose to implement Microsoft Business Solutions–Navision®. “We’ve worked with Symbiant Technologies, Inc. for several years and put a lot of confidence in their recommendations,” says Tom Welter, Controller.

Solution

Skarnes implemented Microsoft Navision software including modules for Financial Management, Inventory and Order Processing, Project Management, HR Management, and Customization Tools. They have 15 users on Microsoft Windows NT® 4.0.

Hytrol Conveyor system in action, one of many material handling solutions offered by Skarnes, Inc. and DL Systems. Features that attracted Skarnes to this solution were the ease of reporting, simplified order entry, seamless data transfer, and the fact that the modules purchased could be tailored to meet their specific needs. Customizations were added to track freight handling expenses for individual customer orders, add purchase order numbers to fields, track special purchase orders (SPO), and commission specific reports.

Skarnes went live in November 2001. “The timing of our “go live” date scared me,” says Welter. “It was the end of our calendar year. I had to go through the end-of-year close-out procedures for our old RealWorld solution just as we migrated to Microsoft Navision.”

Despite these concerns, Skarnes had a pleasant surprise when the transition went exceptionally well; information transitioned smoothly. Since implementation, they now appreciate the effortless year-end close with their new solution. “Now, the only year end transition is having our profits move into retained earnings,” says Welter. “We now flow from year to year and can access the historical data of past years quite easily.”

Since the initial implementation, Skarnes has acquired D.L. Systems and has transitioned them to this solution as well. “Microsoft Navision allows us to run live data between the two companies without the need for any dedicated IT personnel,” says Welter.

Benefits

Exceptional Reporting

The reporting capabilities of Microsoft Navision allow Skarnes to make the simple programming changes needed to run reports customized to meet their needs. The variety of reports available saves the company time and increases the accuracy of information. These reports enable Skarnes to monitor sales more closely, capture open orders that have not been invoiced, and track inventory.

Elimination of Redundant Data Entry

Skarnes experienced a 40 percent reduction in accounting work time with Microsoft Navision. The elimination of double entry for purchase orders and accounts receivable has allowed them to reduce one FTE of administrative staff. Even when they acquired D.L. Systems, Skarnes didn’t need to add more staff. Staff additions would have been necessary had they not been on Microsoft Navision. Welter estimates these cost savings to be in excess of $70,000 annually.

Welter estimated a 20 percent increase in productivity also resulted from the new solution. Staff is now able “to do other projects related to their job and to make better use of their talents and creativity.”

Ease of Use

Skarnes does not have any dedicated IT staff. They have found this software easy enough to use that, since they are a small company, they don’t need dedicated IT staff.

Improved Handling of Commissions

The new solution enables Skarnes to include both salary and commissions on gross profits of various rates for sales staff. This was impossible with their previous solution. “We can figure a commission once and the solution remembers it for the next time,” says Welter.

Ability to Track Costs

This software allows Skarnes to track costs including very precise drop ship costs, along with the associated freight costs, when a manufacture ships directly to the customer bypassing the distributor. Even when the products haven’t been shipped, the solution enables them to view the balance in the drop ship account for the costs incurred. This provides them with the ability to audit the account and view incomplete jobs. This software also enables Skarnes to track POs after they are closed.

Ability to View Work in Process

Microsoft Navision also allows Skarnes to view work-in-process (WIP). Previously, the company was unable to view open orders until they were invoiced. With Microsoft Navision, they can capture and identify reasons for WIP.