JD EDwards upgrade keeps Trex on solid competitive ground.
by Carol Hildebrand, November 2009
Trex Company has built an empire on grocery bags. The company turns plastic, wood scraps, and sawdust into wood-alternative decking, using 1.5 billion recycled grocery bags to make Trex products each year. In fact, the average 500-square-foot composite Trex deck contains about 140,000 recycled plastic bags.
Although Trex certainly pioneered the use of 98 percent recyclable materials to create its signature deck flooring, several competitors have sprung up in the 15 years since the company was founded. Indeed, Trex executives realized that aging technology and unwieldy manual processes left over from the company’s early days could seriously hinder the company’s ability to quickly and reliably deliver orders to wholesale distributors and retail centers.
So when Kirby Miner came aboard as CIO, one of his first missions was not only to replace the company’s aging enterprise resource planning (ERP) system with Oracle’s JD Edwards EnterpriseOne 8.12 but also to use the upgrade as an opportunity to improve efficiency and productivity to stay competitive.
“We had been growing so fast that it was like running with our hair on fire for the past seven years,” says Miner. “We were trying to keep up with demand, branding, and a product list that grew to include railings, trim, and fencing. As a result, our IT became a tertiary type of event and our systems grew stagnant.”
Working with Oracle Partner CSS, Trex pursued a plan to streamline operations by simplifying sales and inventory processes and creating a more transparent financials process. At the same time, the company wanted to slash IT costs by moving an externally hosted ERP system into the Trex data center. Concentrating on the priorities set by executive management, Trex and CSS used creative, cost-effective project methods and subject matter experts to make the plan a success. As a result, Trex realized numerous business process improvements that today enable management to concentrate on the things that are important to the company’s success—providing the best products for environmentally friendly outdoor living.
“Our project was complex and involved various business units—this was much more than just an upgrade. Finishing on time and under budget is a credit to the leadership we got from CSS and the support we got from our senior management team,” says Miner.
Clearing the Decks
Trex had reached a point where its leaders knew they had to gain efficiencies to continue the company’s growth.
“We had a great product, but we needed to make the manufacturing and distribution processes more efficient to become more competitive,” says Miner, who found multiple areas ripe for improvement within IT.
For example, the company’s accounting processes, while accurate, posed one challenge. The financial chart of accounts was difficult to navigate and inefficient. “With many companies such as Trex, as the business changes, they start adding more general ledger account numbers rather than restructuring the chart of accounts,” says Keith Jones, director at Charleston, South Carolina-based CSS. “So more often than not, the account numbers don’t adhere to a set of standards that ties them to particular parts of the business, meaning that it becomes difficult to access information for reports.”
Waiting for end-of-month accounting reports was not sufficient. “We’re not a 35-person staff anymore,” says Miner. “We wanted more-detailed, faster, and customizable reporting.” For example, the company wanted to be able to access and analyze more-detailed information on purchasing variances, and it wanted to give users the ability to produce customized reports on the fly.
As with the chart of accounts, Trex needed to improve and automate outdated business processes to support company growth. “We can no longer get by with manual processes,” says Miner. “We wanted to use technology to streamline the supply chain process.”
The prime target was the distribution process. Trex uses a multitier distribution system, with about 80 percent of sales going to traditional building distributors and the remaining 20 percent heading to big-box retailers such as Home Depot and Lowe’s. But although those bigger companies used electronic data interchange (EDI) to share data online in a structured format, many of the smaller accounts were lagging, which was a major stumbling block for efficient replenishment. Moreover, the product list had dramatically expanded beyond decking to include a variety of products in multiple sizes and colors.
JD Edwards EnterpriseOne 8.12, including accounts payable, accounts receivable, general ledger, fixed assets, electronic data interchange, procurement, sales order processing, and work orders