How Pacific Dunlop Garments Successfully Implement MAE ERP System Garment ERP Software

The Company:

Pacific Dunlop Garments, in business for over a century, owns the production and distribution rights for many well-known international brands and is the largest garment retailer in Australia. It currently operates seven factories in Beijing, Shanghai and Guangdong.

A decade ago the Group became over-extended and had operational problems which led to insolvency. It used information technology to strengthen production management and control costs, reduce inventory, and shorten production cycles. As a result Pacific Dunlop returned to profitability and acquired additional well-known European and American brands and general merchandise groups as its customers.

In 2002, Pacific Dunlop invested US$ 30 million to build a new factory in Zhongshan. This enables it to react more rapidly to world markets and customer needs. Recently, it purchased Sara Lee Courtaulds, a large UK garment manufacturer and merchandiser with operation in England, Sri Lanka, and Morocco.

Transformation of the industry:

Wu Wenhe, Business GM of Pacific Dunlop Garments in China: "The clothing industry is undergoing a transformation: suppliers have to offer more than quality and value; they must react quickly to the needs of customers and the market; producers have to produce on a large scale and standardize management practices; all enterprises in the supply chain must learn how to co-ordinate and interact more efficiently.

Pacific Dunlop has responded to these pressures with a competitive strategy to shorten its production cycle from three to nine months to just fourteen days"

Why Parellax?

To shorten your production cycle to just fourteen days you must leverage information technology.

The Group examined software solutions from many global software companies and finally chose Millenar Apparel Enterprise (MAE), Parellax Limited’s Enterprise Resource Planning (ERP) system.

As Wu Wenhe explained, Pacific Dunlop's management believed that Parellax had the right solution for the Group for several reasons:

First, MAE is specifically designed for our industry so it fits our requirements very closely. A generic solution like Oracle or SAP would have required extensive and expensive customizations and it would never have met our needs as well as MAE.

Second, we had confidence in the MAE implementation consultants and business analysts. They all had strong garment industry backgrounds and impressive skills and experience.

Third, MAE is versatile and expandable. We can be configure and customize it to meet the requirements of any type of operation. That is important to us because we are always adding new businesses and continuously improving our business processes.

Fourth,
Parellax has the most advanced technology and uses the world’s leading database, Oracle, as its technology platform. We wanted the reliability and stability that that platform offers us.

Finally, the MAE development team impressed us. They demonstrated the ability to extend their product and add new modules and functionality to meet our projected needs. They can provide solutions such as e-commerce, ERP, and SCM to integrate our system with those of our suppliers and our customers. For example, when our inventory of certain raw materials falls below replenishment level the system informs suppliers directly. This is a feature which shortens our production cycles considerably.

Pacific Dunlop purchased MAE in 2002 to help it re-engineer its business processes to lower inventory, reduce cycle times, and increase its responsiveness to its customers. Today Pacific Dunlop uses MAE to run its entire business.

Splendid Results

The MAE implementation team performed detailed business process analyses in each of the Group’s six factories in China. Based on this, the team advised Pacific Dunlop how to use MAE to re-engineer the Group’s business processes to streamline operations and improve the efficiency of management and production. Pacific Dunlop has achieved unprecedented profits after implementing this solution.

Mr.Wu Wenhe tells the story:

“After analyzing the recommendations, we decided to make the Dongguan garment factory the test case for the first stage of implementation. We implemented several key modules, including order processing, inventory management, material requisition, production control, and accounting, and production progress management. Within six months these modules were working smoothly in the Dongguan factory with impressive results. We then implemented the system in all the factories and offices owned by the Group and incorporated Supply Chain Management functionality into the system to integrate the Group with its suppliers and further enhance its competitiveness.

Our product planning process has changed. In the past, we produced finished goods based on sales forecasts (Make-to-Stock, – production was determined by inventory). The factory reacted slowly to the market and had a large amount of inventory. Today, production is based on customer orders. (Make-to-order - production is started by an order). We react more quickly to market demand; our products sell better; dead stock is reduced, the storage period of materials and finished products is shortened, and inventory turnover speeds up.

Before, overseas import distributors needed to stock inventory for about six months. Today, we have reduced that to one or two months leading to a reduction of 65-80% in inventories.

In the past, the factories had to order material in advance and hold finished products for an average of four months. Today the factories order materials only when orders are received. Storage time is reduced and finished products need to be held for only three weeks. This has reduced inventory by 25%.

In the past, overseas designs required six months. We can now complete them in two to three months, a 50-65% time saving.

In the past, production cycles took three to nine months; today we have shortened them to fourteen days, as was our goal.

We have automated and simplified our complicated order management process and have improved the communication between departments. Now employees enter information into the order processing system once; MAE processes all relevant information and documents automatically and greatly reduces losses caused by human error. We can now process orders ten times more quickly than in the past.

The Group now has the confidence to implement further IT applications which will enable each buyer to process 3,000 orders, each for only 300 pieces, at one time, thus shortening the production cycle even more. Mr. Wu Wenhe believes that the technology advantage of POS, the Internet, and Parellax's Electronic Data Interchange (EDI) system will connect the whole supply chain of the industry, and make his plan come true.

With the help of Parellax’s technology, Pacific Dunlop’s management can see the market situation at any point in time. We use this information to organize our resources to meet the demands of the market. It has been instrumental in lowering costs and increasing profits .Annual turnover has been increasing by 50%. The Group is now looking ahead and believes that the solution provided by Parellax will serve as a foundation for Pacific Dunlop's future development.