Singapore food distributor implements Microsoft’s ERP software to support growth

One of Singapore’s biggest food distribution companies, Seo Eng Joo Frozen Food (SEJ), which started as a small family business, has successfully migrated to Microsoft Dynamics NAV, an Enterprise Resource Planning software.

The migration was made to support the company’s growth plans, including a targeted ten-fold increase in output in the next three to five years.

Through the deployment, SEJ has seen increased operational efficiencies, with a 15 percent reduction in time spent on administration enjoyed by the inventory control team, and an expected 300 percent growth in customer acquisition from a new business entity established to handle sales in a new market segment.

SEJ moves 15,000 pallets of frozen foods, 14,000 pallets of dry goods, and 1,000 pallets of chilled foods to more than 1,000 food and retail establishments daily. Aside from fast-moving consumer goods (FMCG) distribution, the company also covers trading, import and export, as well as supply chain management services as part of their core business. Given that optimising supply chain management and operation is crucial to the business, SEJ had deployed an Enterprise Resource Planning (ERP) platform to ensure timeliness for the movement of its goods.

For almost two decades, the company relied on the ERP platform which was highly customised for its business operation needs. However, SEJ’s management soon realised that the rigid nature of the legacy ERP was a limiting factor in meeting their expansion goals.

“Our company’s expertise is in FMCG, but we have found IT to be a big challenge,” said Charlie Seo, General Manager, SEJ. “When the company’s management launched our roadmap for long-term growth, we sought to improve our enterprise planning capabilities with a capable and trustworthy partner who could see us through our journey.”

SEJ’s management then embarked on a 12-month selection process for a new system as the legacy ERP was no longer able to meet their expansion needs. Microsoft Dynamics NAV was selected for its high flexibility and scalability, as well as the no-comprise on reliability which is very critical for the industry that SEJ operated in. “In our industry, drop and pick accuracy are very important considerations,” said Charlie.

“When a customer orders, and when we make deliveries, we want to be 100% sure that we are delivering the correct goods at the right time.” The solution had to ensure that different elements such as warehousing, deliveries, storage, inventory and other functions worked well together.

Achieving better control and efficiency

The migration has given SEJ better control and efficiency across the business.

For instance, SEJ now enjoys improved communication across finance, inventory control functions and warehousing functions as a result of improved integration between modules. For example, creation of sales orders automatically generates picking instructions for the warehouse, and confirmation done by warehouse staff automatically posts the shipment.

The communication process is streamlined, and previous manual processes are now automated, which has resulted in a 15 percent reduction in administrative time for the inventory control team. The deployment has also helped reduce the likelihood of human error in transactions and processes.

SEJ has gained greater operational efficiency, both in the processes and the checks-and-balances employed throughout. By facilitating the picking process, Microsoft Dynamics NAV has helped ensure that stocks with earlier expiry dates move out of warehouse sooner than others, driving overall efficiency and reducing turnaround time.

The dimension feature of Microsoft Dynamics NAV allows SEJ’s management team to analyse profits by market segments, geographic zones and brands. Not only has SEJ become more efficient in the way they handle information, the company’s database is now more comprehensive which has allowed them to track more metrics and generate more detailed reports. This has provided them faster decision-making in an industry where delays results in higher perishables that is costly.