case studies : Lexon (UK) Ltd
summary
Lexon is one of the fastest growing UK businesses, specialising in providing pharmaceuticals to chemists with rapid order to delivery schedules.With an £80 million a year turnover, Lexon currently supplies more than 6000 product lines from its 80,000 square foot warehouse to pharmacies across the UK, with either same day or next day delivery.
"It's all the little things combined: we could not have continued to grow without moving to Navision. It has given us an edge."
"Electronic order entry at Lexon processes 6,000 line items a day, which saves us 5 telesales operators. Over three years, that is saving us £225,000, on a total ERP investment of £150,000 for a 46-user system.
Thats a return on investment of £75,000"
case study:
Challenge:
Lexon had experienced rapid growth in its business and reached the limits of its Sage Line 100 system. To implement new features such as advanced telesales and predictive ordering, Lexon needed a software solution that could be tailored to meet its needs. It required an application that matched its rapid delivery schedules with a level of reporting that could highlight business trends and shortfalls.Solution:
Microsoft Business Solutions Navision Edition provides the basis for an extensive overlay system that allows Lexon to implement its own business policies and interfaces for electronic ordering for customers.Key Benefits:
- Single screen input to reduce time taken for orders with proactive selling features and minimal use of 'mouse'
- Advanced call scheduling and warehouse workflow management with document barcoding.
- Compatibility with EDI to allow customers to place orders remotely
- SQL database provides stable framework for future development
Executives at pharmaceutical distribution company Lexon were growing increasingly frustrated of working within the restrictions of its Sage Line 100 system. As a result, they decided to replace it with a customised software solution that would include features such as advanced telesales and predictive ordering, It selected Microsoft Business Solutions Navision Edition, which allows Lexon to implement its own business policies and interfaces for electronic ordering for customers.
Background:
When Anup Sodha and his two partners founded Lexon in 1995, the plan was to have at least a £5 million turnover within five years. However, things didn't work out that way. By 2000, Lexon was a £30 million a year business and growing at a rapid rate.Though facing stiff competition in the market, Sodha believed that simple business practices such excellent customer service combined with competitive pricing would be enough to carve out a niche for the business. Sodha, who had experience in the use of advanced software systems, also believed that application software could give Lexon a competitive edge.
The company had started with the respected Sage Line 50 product. Although dated, the product was fast, cheap and while the company remained small, it excelled. Sodha said, "Line 50 was a good product but we simple grew out of it, as it was a DOS package there were item and file size restrictions that we simply couldn't get around. The logical assumption was to move up to the next sage product and in 1998, we moved to Sage Line 100 - but I have to admit it was a mistake."
From the beginning, Lexon encountered problems with Sage Line 100,
"It was having a negative effect on our network and although we
had more features than Line 50, it was still not how we wanted to
work. At this point we took a step back and decided that for the long
term future of our company, we needed to look at a system that would
work with us not us having to work within it's limits,"
explained Sodha.
Solution:
He then spent eight months looking at respective software applications on the market. "It was hard work. I made endless calls to reference site customers and vendors for distribution applications generally written for UNIX such as Sage Tetra, XKO, CSD and BRANTECH. I also looked at software on the Windows platform, like Exchequer, Great Plains, Access, Navision - it was such a big decision and the consequences so far reaching that we looked at everything," he said.Lexon even talked to programmers about creating a bespoke system. "We knew what we wanted - it had to be flexible, it needed to run off a standard database like SQL or Oracle and we wanted a Windows-based system over Unix which would have fewer future compatibility restrictions and better user interface. At the same time we were well aware that majority of the companies involved in distribution still used legacy Unix based systems because of the perceived speed and reliability of the operation system. And most importantly we didn't want to be tied to a small vendor that if it went out of business, we would be unsupported."
With turnover reaching £25 million and several business awards from the Sunday Times and Daily Telegraph, Lexon decided to invest in Navision. Sodha said, "Navision offered the best fit on paper and the deciding factor was when myself and a programmer from our in-house IT team met a Navision programmer at the CIM conference in Birmingham. It was clear that Navision was like a kind of putty, the financial modules seemed solid and with the rapid development environment within Navision, we could change almost any aspect to provide the types of features we needed that would give our business a competitive edge."
Lexon implemented a core system to replace Sage Line 100 in six months
using a Windows 2000 server platform and a Duel Zeon Dell server. The
basic Navision system was implemented in three months. Using the
c-front application development language for Navision, Lexon were able
to implement unique features that helped both sales and operational
management.
Conclusion:
"In the old system we had a situation where only one person could do the invoicing because the pickers and packers were just scared of the complexity of the old software. The new system is a simple, single screen that is intuitive and requires just one hour of training to get anyone to use it.
"The new system is also linked into both sales, stock checking and pickers. If an item is physically not in stock, it alerts stock checkers and purchasing and the overall affect is to give us a 99.5% stock accuracy. With barcode tracking of documents our operational workflow has vastly been improved increasing productivity.
"It's all the little things combined: we could not have continued to grow without moving to Navision. It has given us an edge," said Sodha. For example, if an item is not in stock, the system will give telesales operators a list of matching alternatives. When the item comes back into stock, the system will automatically schedule telesales people to contact customers to inform them of re-stock.
Another benefit is the massive reduction of paper flow, with only one document used for pickers, invoicing and returns.
Lexon has also developed an electronic order pad software which it gives to each of its customers. The order pad allows chemists to fill in its orders and transmit them to Lexon via EDI and straight into the Navision system.
"The nature of our business is changing. For some of our customers they want to do it themselves and others prefer dealing with telephone staff. You have to give flexibility to customers and our software platform gives us this ability."
With an £80 million a year turnover, Lexon currently supplies more than 6000 product lines from its 80,000 square foot warehouse to chemists all across the UK, with either same day or next day delivery.
"I can honestly say we have no regrets. It took us a long time to find the solution that best fitted our company and I know that for the next five years at least, no matter how quickly we continue to grow, our system will be able to cope."