WD-40 has automated its order processing in Europe with a modern enterprise resource planning (ERP) system to support its business growth.
The sales and marketing firm – which makes the WD-40 concentrate but is not a large-scale manufacturer of the rust-busting fluid – has chosen Epicor as its ERP system.
Jonathan McCoy, IT general manager at WD-40 and head of IT for the company in Europe, the Middle East and Africa (Emea), says automation is the critical benefit of the Epicor 10 system, one aspect of which is that the company is now “continuously selling”.
“We don’t have the friction between our suppliers and our finance team that we used to have,” says McCoy. “Effectively, before, we had to almost close for a week at the end of each month. The automation we’ve done on our financial reports has made it more efficient, running rather than checking reports from the end of one month to the beginning of the next.”
Belfast-born, Galway-raised McCoy is, like quite a few IT directors, a convert to business technology from the humanities, having taken a degree in English, drama and history at the University of South Wales. He has put aside a boyhood ambition to be an actor and writer to take up corporate IT.
The ERP system in question has a demand processing module, which means that WD-40 has managed to automate much of its order processing, in partnership with Amsterdam-based TIE Kinetix, which integrates e-commerce processes for its clients.
This is how it works: WD-40 receives electronic orders that automatically go into the system; the warehouse then ships the orders; and electronic invoices are immediately issued to customers.
The company itself does not sell directly to consumers. It is a B2B business that has distributors in some countries and direct selling offices in others, including the UK, which sells to the likes of B&Q, but also, as a generic example, cycle shops.
“We had been selling to a third party that would then sell on to DIY customers, but this was changed so that we could work directly with customers,” says McCoy. “Because we had Epicor ERP, we could introduce electronic ordering for a large volume of customers quickly. It became a much smoother process across Europe.”
“Companies often get stuck with a customised ERP that they don’t upgrade. I wanted to be able to upgrade, and so stay flexible”
Jonathan McCoy, WD-40
WD-40 was founded in 1953, and is headquartered in San Diego, California. Nasa chemist Norm Larsen sought and found a “water displacement” solution to protect the Atlas Space Missile from rust and corrosion. It was his 40th attempt – hence the name.
The company’s UK headquarters is in Milton Keynes, and covers the Europe, Middle East and Africa (Emea) region, which accounts for about 40% of the global business. WD-40 employs 400 people worldwide, and 220 in Emea.
“We are quite compact as a company, so we have a big drive for automation,” says McCoy. “Our business model is 55/30/25, which is common in our sector. It means 55% margin, 30% cost of business and 25% EBITDA [earnings before interest, taxes, depreciation and amortization] profit. We plan to grow the business from $400m to $700m over the next seven years, and automating things like invoicing and shipping is part of that.”
McCoy says that shortly after he joined the company in 1999 as its first UK IT manager, it was running a Unix-based ERP system that was not, at that time, either Y2K or Euro compliant. Called Scala, it was subsequently acquired by Epicor in 2004 and developed further.
By 2011-2012, the company had come to review its ERP options. Should it stick with Epicor’s iteration of Scala or make a break? “Scala had served us well, for about 10 years, but we were struggling to make it work with our growth, and getting the flexibility we needed,” says McCoy.
The immediate business context was that the company wanted to open a new direct sales office in Portugal to support its existing Spanish office. A similar issue had arisen with the opening of a new office in the Netherlands, which was an expansion of the German one.
WD-40 needed software that could incorporate all the sales and purchasing data from its existing German and Spanish sites so it could be migrated to the new sites in the Netherlands and Portugal.
Read more about Epicor
- What is Epicor?
- Epicor ERP targets midmarket industries that run the gamut and is designed for global scalability and configurability.
- 2016 Panorama Consulting report ranks the top 10 ERP vendors based on market share, cost, functionality and implementation time, with Epicor on top, followed by Infor and SAP.
“SOA is the big thing for us,” says McCoy. “The ability to change the way the system works without changing the system is very important. We have not had to customise Epicor at all. For example, the way we categorise our customers is not going to be there in standard ERP functionality. In the old system, we would try to force it to work, renaming fields, and so on.
“Companies often get stuck with a customised ERP that they don’t upgrade. I wanted to be able to upgrade, and so stay flexible. Otherwise your business suffers. We have also taken our time with the integration country by country.
Working partly with Epicor directly, and partly with consultancy and reseller Aspera, WD-40 started an initial Epicor 9 implementation in 2014, finishing in 2016. It then upgraded to version 10 and is looking to get into a “cycle of upgrading every year”, says McCoy.
The unlimited capacity to add user-defined fields to the system is key for the firm, says McCoy, who describes the supplier’s roadmap as “impressive”.
He feels the hybrid model of dealing with the supplier directly but with “tailored support with Aspera team” is better than having to deal with the likes of Microsoft’s ERP software wholly through partners.
Another advantage for Epicor, he says, was that it “didn’t have to repurchase with the shift [from Scala] to Epicor”, adding: “Yet another was that it is easier to recruit IT professionals with [modern] Epicor skills than Scala skills, and easier to get access to partners, such as Aspera. “I talk to Epicor product managers directly, and they are very approachable. Aspera gets our business too, so it all works for us.”