Microsoft® Dynamics AX®

Customer Solution Case Study

Indonesia’s Top Gummy Candy Producer Reduces Monthly Reporting Time by Half by Moving into an Industry-tested ERP

OverviewCountry or region: IndonesiaIndustry: Gummy Candy Producer

Customer ProfilePT Yupi Indo Jelly Gum (Yupi) was founded in 1996. It produces gummy candies for both domestic and export markets. Today it is the largest gum producer in the Southeast Asian region with products shipped to 40 countries around the world.

Business SituationIn the past, applications were developed in-house based on MS-DOS®. Each department had its own application and preparing the monthly report was a major time waster. Each month, the reports were delayed so much that they could not be use for strategic decisions.

SolutionNugroho Harjono, the current Finance Director, was very familiar with Microsoft Dynamics, as his previous company used the ERP. When he joined Yupi in 2008, he pushed for the deployment of Microsoft Dynamics AX®, as he was strongly convinced that it was the right ERP solution for the company.

Benefits Timely reporting Improved business insight Efficient workforce Greener environment

“As Yupi’s business continued to expand, we required the ability to generate timely reports. Great as they were, the in-house developed, MS DOS®-based applications were no longer adequate to support our business. They were not integrated with one another, so a lot of tasks had to be repeated manually. As the result, it took a lot of time to reconcile the figures from the departments and the management was constantly frustrated by the situation. In general, the reports were of not much use, as by the time we found out that the sales of certain gummy candies were slowing down, for example, it was too late to change the production and we already had a large stock in our warehouses.”

Nugroho Harjono, Finance Director, PT Yupi Indo Jelly Gum

Today, PT Yupi Indo Jelly Gum is the largest gummy candy maker in South East Asia.

The main product, Yupi Gummy, is very popular in the local market and it is also

exported to 40 countries around the world. To ensure the highest quality, most of the

ingredients and processing equipment are still imported.

From its early days, Yupi relied on home-made applications based on MS-DOS®. As

the business grew in volume and complexity, generating all kinds of required reports

was a huge daily chore since the figures from the departments rarely corresponded

with one another.

By 2008, the management had become fully aware that they needed an integrated

ERP, but they remained undecided as to which software to use. Nugroho Harjono, the

new Finance Director, had been very familiar with Microsoft Dynamics, as the

company where he previously worked used the ERP solution. As soon as he joined

Yupi in 2008, he suggested that the company deploy Microsoft Dynamics AX®.

The implementation was done in two phases, with the more straightforward

applications such as Finance and Logistics deployed first. After the Go Live of Phase I

in January 2009, the company has enjoyed multiple benefits including shorter report

generation time, increased employee efficiency and better insights into the business.

SituationGummy Candy has been around since the 1900s and has been gaining popularity until today. The gummy candy is a unique confection made of gelatin, sugar, flavorings and food colorings. Only a handful companies make good quality ones in the world, and Yupi is one of them. It produces a lot of different types of gummy candy.

Yupi was founded in 1996 as a joint-venture between Helmut Paasch and Herbert Mederer, owner of the German–based Mederer Corporation. The company was also extremely successful in making its products very popular in Indonesia, Europe, North America, the Middle East and Asia and Australia. Besides selling its products under the brand Yupi Gum, it also serves private labels.

After the monetary crisis hit Indonesia in 1998, which brought the value of the rupiah to the ground and drove the price of the imported ingredients up to the sky, Yupi exported 80 percent of its products and sold only 20 percent locally.

Although it was a world-class company, it took Yupi a long time to modernize its IT systems. In the beginning, it used DOS-based, home-made applications. As expected, the applications lacked integration. One application was not connected to the other, so Yupi had to repeat the processes manually. “Before we deployed Dynamics AX, we had to spend a lot of time reconciling the figures from the departments, and this reduced our ability to adjust our strategy based on market conditions or changes in our

operation,” says Nugroho Harjono, Finance Director, PT Yupi Indo Jelly Gum.

The DOS applications also wasted a lot of paper. The GL reports, for example, had to be printed every month and invoices had to be printed in multiple copies.

Toward 2008, the management had become fully aware that they needed an integrated ERP system. They looked at several alternatives, including a couple of locally developed products and even SAP® R3™. They took no action because it was also a time when the company was undergoing a major management change. It was when Nugroho joined the company and took over the position of Finance Director in June 2008 that the momentum picked up again and the decision was made.

SolutionFirst, Yupi defined the selection criteria. They wanted an ERP solution that was affordable, had all the modules and functionality that they needed, was backed by a reputable company with reliable support and was a scalable solution. “We wanted to make sure that we could continue to use the solution as our business grew,” says Nugroho.

The company that he previously worked for used Microsoft Dynamics. Therefore, as he became the Finance Director at Yupi, he brought with him a lot of knowledge of Microsoft Dynamics and he suggested that the company deploy Microsoft Dynamics AX. They did not choose SAP, as the solution would require a significant investment while it had many features that they were not going to need. The other local products they

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“We looked at several ERP alternatives. We found Microsoft Dynamics AX had the most complete modules for our requirements and all the functionality that we needed.”

Nugroho Harjono, Finance DirectorPT Yupi Indo Jelly Gum

had looked at were not chosen either because the references were not convincing enough. They also had some important modules such as Fixed Assets missing. “We also learned that Dynamics AX was more suitable for manufacturing companies with more complex operation. Besides, we had a lot of confidence in it because the ERP and business management solution was a product of Microsoft,” Nugroho adds. Their decision was then to deploy Microsoft Dynamics AX.

The implementation was done in two phases. The Finance, Logistics and Purchasing modules were deployed in Phase 1. To help them with the implementation, Yupi invited five Microsoft partners to make presentations. “We chose iForte since we were impressed by their professionalism.”

Phase 1 started in August 2008 and was completed in January 2009 as planned. As the modules were more or less standard and they required very little customization, Nugroho and the IT division were confident enough to stop using the old systems right away. Then, based on their experience in Phase 1, they continued to engage iForte for Phase 2. The deployment ofthe Manufacturing/Production module started in October 2009 and was completed in March 2010. “We started Phase 2 later because the Manufacturing/ Production module is more complicated and more customization was needed. Besides, we wanted to familiarize ourselves with the simpler applications before plunging into the more complex one,” explains Nugroho. Because of the

complexity, Yupi ran the old system in parallel with Microsoft Dynamics AX.

BenefitsThe deployment of Microsoft Dynamics AX has brought multiple benefits to Yupi, including cost saving, better insight into the business and more accurate forecasts and a paperless work environment. “In those DOS days, we had to print out the GL reports. Today, authorized employees can see them on the screen,” says Nugroho.

Compelling benefits headings enable reader to scan1. Timely ReportingIn the past reports were completed on the last days of the month while now they are ready to be presented at the board meeting on the 15th. Because the solution enables Yupi to drill down into the data of production cost such as energy costs and raw material cost, if something goes wrong they will still have time to fix it. So for example, if they find out that the wage component has risen significantly, Yupi can confirm that it is caused by a lot of the workers having to work overtime and then find the solution.

2. Improved Business Insight With Microsoft Dynamics AX, business analysis is no longer a challenge. All the data can be imported into Microsoft Excel, in which it can be analyzed to ensure optimum business performance. There is no longer the need to copy and paste data manually, and this shortens the time to post the data to the system.With more accurate data, Yupi can now make better forecasts. This helps them in formulating their strategies. For example,

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“Today, with the help of Microsoft Dynamics AX, we have been able to keep track of the costs of the raw materials, the energy and the cost of production down to the batch level.”

Nugroho Harjono, Finance DirectorPT Yupi Indo Jelly Gum

if the U.S. dollar is appreciated by 100 points, they will know what to do to maintain sales.

3. Worker EfficiencyMicrosoft Dynamics AX has increased workforce efficiency that in just one and a half year Yupi has been able to reassign ten of its employees to other tasks. More importantly, Yupi can save money through better management ofworkers pool.

4. Greener EnvironmentWith Microsoft Dynamics AX, Yupi has been able to minimize the use of paper. A lot of reports no longer have to be printed. Invoices and tax forms can be send out in digital forms. “Not only are we more environmentally friendly, we have been able to virtually eliminate the cost of filing the documents,”says Nugroho.

Microsoft Productivity Tool

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

Partner DetailsPT. Asia Global Solusi (AGS Indonesia)Phone : 62-21-8312487 / 8311904Fax : 021-8312846

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published January 26, 2011

Software and Services Microsoft® Dynamics AX® 4.0 MS Office 2000® Standard Edition MS Office 2003® Professional & Standard

Edition MS Office 2007® Professional, Small

Business, Standard Edition®

MS Office 2010®

MS Visio 2007® Standard Edition MS Visual Studio 2005® Professional Edition

with MSDN MS SQL Server 2005® Standard Edition MS Windows Server 2003® Standard Edition MS Windows Server 2008® Standard Edition