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Customer success: PECO Pallet takes charge of unprecedented growth with Microsoft Dynamics NAV and ArcherPoint

PECO Pallet logo Pallets. They’re used to ship product to distributors and retailers. At first, pallets might be easily overlooked. But consider that nearly anything you find at a retailer was shipped on a pallet—and then multiply the amount of merchandise moving around the country every day by the number of pallets required to move it, and you will quickly see that pallets themselves are a big business.

Managing a fleet of pallets is expensive and time-consuming. PECO Pallet is a North American leader in pallet rental services using the concept of pallet pooling. PECO rents out pallets on a long- or short-term basis to manufacturers and manages the pallet inventories, picking them up from their destinations after product is delivered, cleaning and repairing them, and shipping them back to the manufacturer. Pallet pooling is an efficient and valuable service that increases profitability for manufacturers, and it has quickly become the standard in the industry.

With the growing popularity of pallet pooling, PECO Pallet experienced impressive growth, not only because of the popularity of the service, but because they do it very well—they are known for quality pallets, fast delivery and pick-up, and exceptional customer service. Customers have access to an online portal to make ordering more efficient, and PECO can also tie into customer EDI systems to automatically fulfill pallet needs based on production schedules. Efforts to be the best have paid off: PECO has just completed its third year of 33 percent growth.

The Challenge

PECO had been using Microsoft Dynamics NAV, which served the business well for years. By 2009, with 150 depots across the United States and in Mexico and Canada, serving more than 3,000 customer locations and 8 million pallets in circulation, the company’s growth began to create some challenges. Financial closings were slow, transactions were not posting correctly, and the purchase order process was disconnected creating a paperwork nightmare. Every day, a developer had to manually clean up transactions and perform system maintenance, costing the company thousands of dollars unnecessarily.

Although the system was functioning, it would not be able to accommodate the dramatic increase in the volume of transactions and overall growth the company was experiencing for long.

“With all these transactions, the software needs to be optimized, with a fast customer interface,” said Ken Chazotte, Director of IT for PECO Pallet. “Orders are in real time, and we must know exactly what we have and where it is at all times. Timeliness of analytics is critical to identify ‘leaks’—if not, we lose pallets and money.”

PECO began looking for a new solution and a partner to go along with it.

The company had been happy with Dynamics NAV’s overall functionality and usability—it had very strong financials, the flexibility to integrate tightly with other systems, and a user-friendly interface. Moreover, PECO’s NAV solution was tailored for the unique and complex processes involved in pallet pooling, particularly in the area of inventory management.

After looking at other products, such as SAP and Oracle, the decision was made to stay with Dynamics NAV because of its strengths, because employees were accustomed to using it, and because the cost and implementation time with the other products would be prohibitive. The next step was to find a partner to help with the design and implementation of a NAV-based solution—an industry recognized provider of Dynamics NAV with a solid relationship with Microsoft and Dynamics NAV in particular.

Later that year, Chazotte saw a presentation on Dynamics NAV 2009 given by Microsoft and ArcherPoint, a Microsoft Dynamics Partner that was the first to implement NAV 2009. Knowing Microsoft would “only share the stage with a partner with a good track record and solid people,” PECO made contact with ArcherPoint at Microsoft Convergence and had the opportunity to meet some of ArcherPoint’s customers.  “It was nice to see existing customers willing to talk on behalf of a company,” said Chazotte. “After meeting with Greg [Kaupp, CEO of ArcherPoint], we came to understand the depth of experience on the ArcherPoint team.”

The Solution

In March 2011, PECO Pallet partnered with ArcherPoint to develop a new system from the ground up, using Microsoft Dynamics NAV 2009 as the foundation.

“All facets of our relationship have been excellent. We have a knowledgeable partner who continues to provide valuable services as PECO expands into Mexico and Canada.”

The ArcherPoint team started by continuing to support PECO’s existing system, providing development where needed, but only as necessary so efforts could be focused on the new system. The goal was to switch over to the new system by the beginning of 2012. In June 2011, ArcherPoint Project Managers Trish Maes and Ric Derdeyn and Developer Michael Heydasch worked with the PECO team to redesign the system “from a blank sheet of paper, knowing what we knew from the old system and what we needed.”

Due to the complexity of company’s inventory management needs, the decision was made to develop a custom pallet tracking system, built in .NET and SQL Server. This system would integrate with Dynamics NAV and include an EDI system from Lanham Associates to interface with shipping and trucking.

Using the Dimensions and Resources functionality within Dynamics NAV, Heydasch developed a custom sales pricing system to accommodate PECO’s unique pricing structure.

“When we price a new account, we need to factor in how many days the customer will have the pallets, as well as other criteria,” said Chazotte. “This system was designed to enable us to analyze our business more accurately and consistently to get our pricing exactly right.”

The PECO team was pleased from the beginning with the relationship with ArcherPoint. “ERP people are often tied to the software they know,” he explained. “But [ArcherPoint] could think out of the box and grasp how to connect everything logically, even outside of NAV.”

The team built a comprehensive business management solution that tied operations together seamlessly with NAV and the two other systems. 

PECO went live with the new system on January 1, 2012. The operation went very smoothly. “Everything was done in six months [June 2011-December 2011],” said Chazotte. “What impressed me besides their capabilities was ArcherPoint’s ability to move so fast. The few big issues were figured out within a week. By the end of January, the three systems were working together with some minor areas to smooth out, and by February, they were working together completely. When closing at the end of the first quarter went without a hitch, we knew we had it right.”

“Trish did an excellent job with project management using the Agile methodology, keeping her eye on the big picture while still keeping track of every detail and progress,” said Heydasch, “and Ric was on top of any complication that arose before it became a big problem.”

The ArcherPoint team agreed that credit should also go to PECO’s team. “Their pursuit of a solution to exceed their growth potential is worthy of admiration,” said Heydasch. Maes added, “Their team was extremely dedicated and always put in the time required to meet their aggressive timeline.  They were a pleasure to work with."

The Results

The results were astounding. By eliminating the need for a developer to go into the system every day to clean up transactions, support costs were reduced by 75%. Multiple processes were also improved. The purchase order system is now completely integrated, so only one purchase order needs to be created. This keeps the 150 facilities running smoothly.

The custom pricing system has also delivered impressive benefits. According to Chazotte, “With that functionality and the ability to drill down into a sales figure to the data behind it, we have gained insight that has made us more competitive and profitable.”

As for the performance by ArcherPoint: “All facets of our relationship have been excellent,” said Chazotte. “We have a knowledgeable partner who continues to provide valuable services  as  PECO expands into Mexico and Canada."

What’s next for PECO Pallet? “We want to continually update our systems to remain state of the art and ahead of our competition, including enhancing PECO’s pricing module to handle different product lines,” said Chazotte.

What’s different about ArcherPoint?

Our clients see their business systems as unique and important to their competitive position. They prefer software and technology to support their business processes, not the other way around. Our clients are looking for a strategic partnership with the company that implements their software, not just a vendor. They demand the most talented, experienced professionals who understand how to quickly, efficiently solve their business issues. If this describes you, we invite you to contact us to learn more about our people, company and solutions.

About Microsoft Dynamics NAV

Microsoft Dynamics NAV, formerly Navision, is the best-selling mid-market ERP product in the world. With over 73,000 companies and over 1,300,000 users relying on Microsoft Dynamics NAV solutions every day, it is the clear favorite among growing companies with unique requirements.

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