Dee Noon’s Digital Transformation With ERP

Dee Noon Corporation Sdn Bhd (Dee Noon) was established on May 2006. Managing director of Dee Noon, Mr. Kang, and his team develop products on concept lifestyle furniture such as bedroom, living room, kitchen furniture, and so on. Dee Noon exports its products to over 20 countries including South East Asia, Asia, and European countries. Currently, they are capable to produce about 70 containers every month. Besides homemade furniture, they manufacture OEM products for local sellers and built-in kitchen cabinets for local housing projects as well.

Dee Noon provides services that allow customers to modify the specification of the model based on their own preferences. The research and development department produce model according to local culture for different countries, for example, bedroom set sell good in Indonesia so they make the product and export it to the country. This shows that Dee Noon highly emphasizes customers’ preferences so that they put effort to understand local trends and manufacture the best product of them for the customer. This reason has made Dee Noon become one of the most respected manufacturers in the furniture industry.

Build up a systematic internal process

By gaining customers’ trust, Dee Noon always ensures their product quality is able to fulfill customers’ expectations. As business is gradually expanding, internal management should be the first step to start with in order to improve productivity. Mr. Alvin Kang comes out with the idea to adopt an ERP system in Dee Noon to improve the internal process. Digiwin’s Workflow ERP system had become his choice after he understand what ERP system could benefit Dee Noon. “The main point to implementing an ERP system is to improve my company workflow and assist my team to work effectively and improve the accuracy of the work done,” said Mr. Kang.

Implementation of ERP system

There are a few reasons why management decided to implement an ERP system to improve the overall business processes. Before we implement the workflow ERP system, the ERP system currently uses mainly control on stock and purchaser issue Purchase Order through the system, while the marketing department issue Proforma Invoice (Sales Order) manually. Besides, accounting systems do not link directly from sales, purchases and stock.  Therefore, manual work is required to get all the information from different department and input the data into accounting system.

The second reason is production department is not using any system to control the whole manufacturing process. They are using paperwork most of the time from issuing job orders, travel cards, and so on. While material requisition and production stock were keyed in by the storekeeper. Based on the practice, the head of the production unable to track the status of the Job Order such as how much material has been used for particular Job Order and what is the quality of Finish Goods for one Job Order.

Based on the explanation above, the inventory system is important to a business because it should cover all the process flow such as the ability to check available stock when issuing sales orders in the system, items and quantity to be re-order to be generated according to parameter, the material used for each Job Order and produced quantity should be capture for analysis purpose and so on. All the information shall link together with accounting for better monitoring and supervision for cost accounting calculation.

The consultant comes out with some solutions after the interview and introduces them to the user during standard training. During standard training and hands-on practice, we observe users’ understanding and familiarity with the system, everyone understanding might not be at the same level at the same time, therefore we spend more time on strengthening their understanding of process flow and system operation.

During the implementation, we could find out some gaps between the system and the actual process which is supposed to be followed. What we do was make some minor adjustments to the system by customization, the purpose is to fulfill the customer’s requirement yet meet the internal control mechanism.

Took time to adapt to the new system

We understand the current process flow, we help to reorganize the process flow with some minor changes in order to fulfill the internal control mechanism. This part was taking longer time as users have been doing things in a current way for years, and it is not easy to change the method immediately.

Among all the departments, the accounting department was the one facing the biggest challenges in learning a new system. ERP system structure is way more complicated compare with an accounting system. The accounting module in the ERP system not only covers accounting transactions but it covers all business processes. The accounting department has to audit the data flow from another department so that they only can proceed, for example, the tax code chosen by purchasing department could affect the Sales and Services Tax (SST) declaration. This step could take some time to do checking and verification even communication with purchasing department.

After we adjust the process flow, users give their full cooperation to follow the steps during daily operations. We always believe practice makes perfect, user put efforts into practice and management show their support for the changes in the process flow because they understand the purpose and it fulfills internal control management.

Preparation of data

Besides, the preparation of data is one of the most important steps during ERP implementation. The huge amount of data such as item data, BOM, unclosed Sales Orders, unclosed Purchase Orders, and Inventory opening took user plenty of time to sort out and enter into the ERP system although they need to deal with daily work at the same time.

Due to opening data needing to be done before go-live, we have decided to start entering unclosed sales orders which going to ship on June 2019. While purchasing dept have started to issue purchase order by using the ERP system since May 2019. The research and development department was carrying the heaviest workload during opening data entering. They have to create item data for finished goods and raw materials and also BOM data. However, they managed to complete all the data entered into the ERP system before the go-live date and it took about 20 days.

The project manager plays a very important role during this period. They will organize manpower and clear instructions to users induce to completion of above data before go-live.

Coordinate to make the bridge of communication between department

In addition, the project manager plays as a coordinator between departments in the company. They get to understand the responsibilities in each department and held up meetings for discussion. Under the supervision and coordination of the project manager, communication across departments has become efficient. Now, users are able to identify which department should refer to when they found some error or issue.

ERP Go-live

Dee Noon successfully go-live on the targeted date which is 1st June 2019 after being trained for 30 days onsite and offsite in the period of six months. One of the biggest benefits that we can see after ERP system implementation is BOM data are now entered into the ERP system with a multi-selection of type of board and packing method, but previously BOM data mainly refer to the hardcopy but not the system. After BOM data enter into the ERP system, the marketing department is able to select the board type and packing method based on the setup of the BOM. This reduces communication by using hardcopy because users can directly get the information from the system.

Now, the production department issues Job Orders by using a system based on Sales orders. They can know the board type and packing material immediately from the Sales Order and this information will pass to purchasing department through the system for quicker preparation of the material. This practice will help to reduce the over-purchase of material and be well-managed in storage.

They are able to link all the process flows together which cannot be achieved by the system before we implement the Workflow ERP system, the process flows such as from BOM to Sales Order, Job Order, and Purchase Order will be generated from Sales Order and so on. In the future, management able to monitor the business process by using one system because all the process flows are linked to each other.

Overall internal processes and communication have been improved after getting involved by external consultants. We believe continuous support from the management and cooperation from all members could lead to a productive and effective business process.

DigiwinSoft Malaysia_Dee Noon

From left: Ms. Jasmine Kang (Project manager), Ms. Lok Kah Mun (ERP Project Manager), Mr. Kang (Director of Dee Noon), Ms. Khor (Project manager)

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