Hansen Products: market position and growth challenges in New Zealand manufacturing

Abbott Laboratories

Hansen Products

Hansen Products is a New Zealand-based corporation that designs, manufactures and distributes over 1,000 products with distributors in 10 countries (Hansen Products, 2011). Hansen's business processes eventually outgrew its nine-year-old system of finance and multiple databases, so Hansen decided to update and integrate its company-wide systems with Microsoft Business Solutions' Axapta (Istart, 2011) as its ERP system. Axapta is listed among the Top Ten ERP programs (Top10ERP, 2011) and at least one industry review praises Axapta as strong, fast and relatively low-cost (Collins, 2003). Effective implementation requires cooperation by a company: "The importance of management involvement cannot be overstated, as they serve as the visionaries and advocates for the project" (Blytheco, LLC, 2008). Aware of the need for extensive cooperation, Hansen appointed a "dedicated team" to the ERP modules (Istart, 2011).

Hansen's ERP system handles all its "financials, manufacturing, inventory and forecasting" (Istart, 2011). Within six months of ERP implementation, Hansen's production benefitted from its ERP system: the manufacturing processes are more efficient, with "tighter production planning and scheduling" (Istart, 2011). Hansen states that it now knows the products that must be manufactured and assembled, the raw materials to order for manufacture and when they should be ordered (Istart, 2011).

Non-production processes have also benefitted from the ERP system: manufacture from raw materials can be entered in the main system; Hansen is better able to control its own purchasing because it knows what it needs and doesn't need from its own suppliers; sales orders can be entered with customer codes or product codes; Hansen's preference for full cartons for shipment is the favored in the database; customer service has improved because the system generates an automated e-mail acknowledging an order, then another automated e-mail when the product ships; the more efficient production planning and scheduling allows it to better forecast business needs so it can effectively manage its expansion into Canada; Hansen also saves time by not duplicating information and freeing up more staff time which would otherwise be spent keying in data; information is processed in "real time," so Hansen immediately sees changes and can make smarter business decisions (Istart, 2011).

The production and non-production effects are logically closely related to each other and can be illustrated by a sample order. If a customer from New Guinea orders 10,000 "Fast-Fit Tapping Saddles," Hansen's New Guinea distributor enters the order in the ERP system and Hansen's ERP system automatically acknowledges the order by sending an e-mail to the customer. Hansen's ERP system also determines whether the company has an adequate amount of the ordered product. If it has insufficient product, the ERP system shows that and Hansen can quickly order the materials from its own suppliers, direct the production department to make the adequate amount, then arrange for shipment, convert the currency, bill the customer and send an automatic e-mail when the order has shipped, all through its ERP system. If, on the other hand, Hansen already has the 10,000 "Fast-Fit Tapping Saddles," Hansen's ERP system can determine that the amount is adequate, find its location, arrange for shipment, convert the currency, bill the customer and send an automatic e-mail when the order has shipped. In that example, the ERP system: allows international distributors to enter their orders in a unified system, avoids overproduction and underproduction of a product, helps Hansen see what it needs to meet an order, orders needed raw materials and manufacture of the product, ships it, converts currency and sends another e-mail to the customer when the order ships. In sum, Hansen's ERP makes the interplay between production and distribution is a more comprehensive, smoother, faster, more efficient process.