Advance Chemicals reduces operating costs | KPMG | AU

Microsoft Dynamics reduces operating costs for Advance Chemicals

Advance Chemicals reduces operating costs

Advance Chemicals implements Microsoft Dynamics NAV solution to control costs and improve production planning. The solution resulted in significant cost savings.

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Partner, Management Consulting

KPMG Australia

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Advance Chemicals has over 75 years’ experience in the manufacture of cleaning, maintenance and specialty chemicals for a wide range of industries including manufacturing, textile, food, automotive and hospitality.

At their factory in Altona, Melbourne, Advance Chemicals manufacture over 1200 products that they sell to over 1000 customers in Australia, New Zealand, China, Fiji and Korea. After receiving key industry environmental ISO accreditations, Advance Chemicals faced significant growth opportunities and predicated that their annual growth rate was expected to double over the next four years. After determining that their former ERP system supplied by 2Clix would not be able to meet their requirements, they contacted KPMG for a new ERP system.

The new solution needed to be able to manage the following:

  • lot and batch tracing for a new product range
  • a stable, meaningful Bill of Materials (BOM) reflecting product quality on a repeatable basis
  • cost control at the product BOM and customer level
  • production planning and scheduling
  • capacity planning
  • overall integration with their existing systems.

Client results

  1. Reduced staff costs: the streamlining of processes in production and warehouse coupled with the Microsoft Dynamics solution has resulted in reducing the workforce by four people and a saving of $300,000 per annum in staff costs.
  2. Cost savings of up to $1,000 per month: sending out quotes, invoices, and statements via email in PDF format saved a minimum of $300 per month in stamps and stationery.
  3. Improved inventory management: NAV gave more control over the company inventory resulting in significant reduction in inventory of raw materials and finished goods.
  4. Improved work efficiencies: improved document control, warehouse efficiency and integrated payroll mean that personnel in all parts of the company were able to save time finding information, finding materials and implementing HR.

Adrian Borsi, Operations Manager, reiterates the positive outcomes. “We can trace raw materials to finished goods to customer receipts and any point in between. This satisfies our veterinarian requirements. Further, we now have full cost roll up (from BOMs and Routings) for every product – we therefore know our profitability for each product for every sale regardless of how much costs may have changed. We can now schedule and plan productions within our capacity limit and provide sensible, accurate supply promise dates to our customers.”

The project

Advance Chemicals chose KPMG Hands-on Systems because of their proven track record implementing hundreds of similar systems in the past. Adrian explained that KPMG's Hands-on Systems has “this general experience that goes beyond just the software and was invaluable in our environment and provided productivity gains in particular which we would otherwise have never even been aware of.”

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