As any cost-conscious, tech-savvy CFO knows, it’s just not good business practice to let an enterprise resource planning system rest on its laurels. That’s why David Ferguson, CFO of PBD Worldwide Order Fulfillment Services, has pushed the envelope with the J.D. Edwards World ERP system that supports the $45 million company.
PBD, of Alpharetta, Ga., provides warehousing, fulfillment, and distribution for some 75 organizations around the country, including the Professional Golfers Association, The American Diabetes Association, The Arthritis Foundation, and The American Medical Association. The company has used World, which runs on an IBM iSeries server, since 1994. But Ferguson is especially conscious of the benefit of using technology to ease customers’ ability to conduct business with PBD via the Web. Consequently, he has personally overseen upgrades whenever new functionality has been added.
The latest upgrade in March enabled customers to receive real-time updates on inventory availability “so if you go out to the Web store, it knows for every product whether it’s in stock or not and can advise the customer before they place the order,” Ferguson explains. The e- Integrator middleware system jointly sold by IBM and J.D. Edwards is a key component of the system.
“That data comes from J.D. Edwards so the e-Integrator product gets the two packages talking to one another to provide that information,” Ferguson says. Since the company Web-enabled its warehouse distribution fulfillment system last year, Ferguson says electronic orders resulted in a cost savings of 25 percent per order.
PBD has also seen a dramatic rise in the number of orders placed online. Through the first five months of 2000, 52,800 orders from a total 352,100 were placed via the Web. For the same period this year, that figure grew to 115,000 online orders from a total of 602,500 orders placed.
Moving forward, Ferguson anticipates more upgrades as new features become available on the J.D. Edwards platform. Specifically, his wish list includes “some business intelligence/data warehousing functionality where you have a repository of data so you can get analysis and information that helps you with key business information” that can be provided to clients.
Ferguson says PBD’s management would like to be able to pass on information such as analysis of sales trends, including sales by territory or region, and items that sell either above or below the expected norm.
Like many organizations, PBD is learning that ERP systems continue to be an integral part of how business is run. In fact, Boston-based AMR Research predicts the total ERP market will grow to $36 billion in 2005 from $21 billion in 2001.
“Despite tough market conditions, and some hesitation in spending, companies will continue to invest in core ECM [enterprise commerce management]-related applications that will enable them to maximize existing IT investments and experience immediate and long-term ROI,” says Bob Parker, vice president of ECM at AMR Research.
Like many companies, PBD initially tread cautiously in the E- commerce waters, starting with a static Web page in the mid 1990s, but it soon realized customers were interested in E-business.
“Once it became apparent a lot of customers would process E-commerce transactions, we felt it was necessary to retain our current customer base but also attract new customers,” says Ferguson. “So we needed to take the next step with a full-featured catalog to give customers the graphical look and feel of a strong storefront.”
That meant having pertinent information available on clients’ Web sites so customers could do a product search and be given the total price of their order with shipping, handling, and tax before they approve it. The key for PBD was to offer those features on the Web and have them integrated as seamlessly as possible.
PBD uses IBM’s WebSphere E-commerce system as its storefront, with e- Integrator linking WebSphere and J.D. Edwards’ World.
Today, the core ERP modules PBD uses are sales-order processing, distribution, accounts receivable, accounts payable, fixed assets, reporting, and general ledger. “We felt J.D. Edwards was the right software for us” because the company’s strength lies in helping manufacturers and distributors, according to Ferguson.
“To us this is the backbone of our operation; everything we do from a process and transaction standpoint in all departments revolves around this system, so the strength of that system is obviously critical so we can grow our business around it,” Ferguson says.
As a third-party distributor, PBD handles the functions related to order processing. For example, some clients that send out catalogs use the company to ship products to customers, and handle fulfillment, warehousing, and reporting.
For PBD, one of the key issues going forward will be the system’s ability to grow along with its ability. So far, Ferguson has been satisfied. He’s also been happy with WebSphere’s ability to integrate new modules from the J.D. Edwards World system.
“We didn’t have to go out and buy the best of breed from different vendors,” Ferguson says. That leaves him plenty of time to make sure his customers are satisfied.