Mizuno USA, based in Norcross, Georgia, might have a big parent company in Japan, but it operates independently in the United States with just 300 employees generating US$180 million in annual revenue. It sells equipment for golf, baseball, softball, volleyball, and running, and its challenge was to grow the business while maintaining high levels of service.
Mizuno implemented JD Edwards (now part of Oracle) in 1998 to replace a legacy ERP system. The company went with a major vendor to meet its specific order and inventory management requirements: experienced golfers want custom clubs, and Mizuno offers custom club configurations built from its inventory of standard parts. Mizuno buyers can choose the length, shaft, lie, loft, and grip for their clubs, and JD Edwards offered a configurator solution that made this possible.
"At that time, we had had the No. 1 iron on the PGA tour for eight years in a row, so we were really trying to find a sustainable point of differentiation from our competitors, especially in the high-end golf market," says Keith Neely, vice president of information technology and customer support, Mizuno. "What appealed most to us about the JD Edwards EnterpriseOne application was the product configurator [JD Edwards EnterpriseOne Configurator]. This tool allowed us to take our product specifications along with the knowledge necessary to assemble specific club makeups, and build it into the software," he says. "Prior to using the configurator, this information existed only on paper and in the minds of our highly experienced shop floor personnel. Now, at the point of order entry, we can tell a customer whether we can personalize a set of irons in order to meet their specifications. We now know whether a particular loft and lie combination can support the head weight of a specific driver. The configurator solution was key to our go-live, and at that particular time, we didn't see any other ERP applications that had the flexibility of the JD Edwards solution."
The configurator solution is a great example of why Mizuno has captured so much value from its information systems investment: the operating units are heavily involved in designing and using the systems. "Most of the work we're doing is with the business itself," says Bill Franklin, vice president of planning and development at CSS International, in Charleston, South Carolina, which worked with Mizuno on the implementation. Every feature is something that Mizuno wants and needs to run its operation better, not something pushed down from on high.
But although the business units drove the system design, Mizuno's management realized that the Oracle system was designed to fit best practices in business operations. It decided to use the base applications as a guide to organize its administrative functions. Where the company differed, it had a choice: it could continue with its current practices and customize the Oracle system, or it could see if the system's built-in best practices made more sense to follow. "Our system is 95 percent pristine," Neely says. "We brought standardization to the front end of the business," and that allowed the company to increase its efficiencies while growing revenues. Limiting customization also makes upgrades simpler, and Neely's team uses Oracle's Entity Relationship Compare tools to help. "Those tools are amazing, and they are part of the core software now," he says.
Mizuno also standardized processes among its four business units. By integrating order entry, inventory management, purchasing, and accounting, Mizuno saw efficiencies right from the start. "From an operations perspective, an item is an item is an item," Neely explains. "We need to price it, pick it, pack it, and ship it no matter if it is used by a softball player or a runner. One of our goals was to standardize item setup across business units in order to make it easy for the distribution staff to handle shipment and for the customer service team to handle inquiries."
Mizuno realized even greater efficiencies around cross-functional processes. "Analyzing the points of integration within the system, or the 'handoffs,' forced the operations departments to talk to each other," Neely says. For example, if a salesperson overrides a price at order entry, the accounting department is notified right away, which eliminates the need to wrap up loose ends at the end of the accounting period. "That's what led to the majority of our savings," he says.
The leverage has been tremendous. Since completing the Oracle conversion in 2000, Mizuno has gone from 220 employees to 340 and from US$77 million in revenue to US$180 million. The order cycle has been cut from seven days to two. Receivable days sales outstanding (or DSOs) have gone down 20 percent, because Mizuno can price and invoice correctly. The call center staff has remained steady at 16 people, because they can answer more calls more quickly and more accurately. The company's total IT staff has just 11 people, only 4 of whom are dedicated to Oracle support.
Neely encourages staffers to participate in users groups, including the Quest International Users Group. As a result, "We have a network of business process owners from around the company," he says, and it is the businesspeople, in addition to the IT staff, who attend the annual Quest and Oracle users group conferences. That way, they can ensure that the system meets their needs. He also says that having a sophisticated IT system helps Mizuno recruit employees with big company experience. It assures them that, regardless of Mizuno's size, it's committed to growth.
Oracle products and services: JD Edwards EnterpriseOne, including Financials, Sales Order Management, Purchase Order Management, Inventory, Configurator, Advanced Warehouse/Transportation, and Human Capital Management
Other products and services: Consulting services from CSS International