“This industry is more technologically conservative and doesn’t require leading-edge solutions that other industries have had for years,” Miner says. “Although retail is more automated, we had a very crude EDI process. It worked, but we wanted a better way.”
By improving EDI, the company hoped to help distributors manage inventory more efficiently. “If they aren’t being efficient with inventory, our product won’t get to the people building decks,” Miner points out. “We need to get product out more quickly, so they can carry less inventory. Companies such as Lowe’s and Home Depot are very particular about how much inventory they carry, and with cash flow an issue for smaller lumberyards and dealers, it’s important to turn inventory more efficiently.”
The last hurdle lay in Trex’ IT infrastructure. The company was unhappy with its current hosted computer environment, which was costing roughly US$500,000 in vendor fees annually. “Our infrastructure was not kept fresh, nor were upgrades performed to the software when Oracle came out with patches,” says Miner. “We were still living with the same software that came out years ago.”
Building the Future
Trex answered the challenges by looking at the initiative through the lens of business value rather than treating the project as a straightforward technology upgrade. “What the company did was target opportunities for improvement on a list before starting the project,” says Jones. “It’s not just doing the upgrade. It’s also doing the upgrade with the intention of getting business benefits out of it.”
Working together, Trex and CSS analyzed and redesigned 10 to 15 business processes to take advantage of tools and functionality within JD Edwards EnterpriseOne 8.12. Some focused on financial processes like the chart of accounts and reporting. Others focused on moving orders through the supply chain, inventory, and replenishment. “We examined our processes to eliminate unneeded tasks and leveraged the software to cut out manual steps,” says Miner. “We tried to find ways to move orders through the system faster and more accurately by taking out most chances for human error.”
The team built its analysis on current business drivers and worked closely with subject matter experts within the business units to provide several process change options that aligned closely with strategic goals.
“CSS was able to listen to user needs, examine current processes, and give 2 or 3 choices rather than 50,” says Miner. “It’s a very decisive leader and did a good job of helping drive home the business requirements that had been set up.”
The team also made the decision to “go vanilla” and avoid software customization as much as possible, a choice predicated on the limitations imposed by the previous incarnation of ERP software. The previous system was built around an older generation of technology, requiring Trex to customize the system to interface with basic banking functions such as EDI and purchase cards. “It was like a guy who has a new car with an elaborate stereo system but uses a boom box in the front seat while driving—all because he didn’t read the owner’s manual,” says Miner. “Does he get music? Yes, but it’s cumbersome, expensive, and redundant.”
The team decided that it was more effective to adapt processes to the software rather than vice versa, a decision reinforced by the fact that JD Edwards software is built on a deep reservoir of collective best practices. “Oracle is expert in ERP, so why not leverage that?” says Miner. “Why pay for it and then go and do something else?”
Finally, the team built a physical infrastructure that enabled Trex to move the application in-house, enabling the company to migrate away from a hosted system environment. Trex had to invest in hardware, but the company was able to fill an open IT position with an expert in JD Edwards software, which enabled it to support the application without adding to head count. “By bringing it in-house, we ended up saving about half a million dollars a year,” Miner says.
The implementation went smoothly—not surprising, considering that it was Miner’s 17th ERP implementation. The entire project took seven months and went live in May 2009. “The day after we went live, I was able to attend [Oracle user group conference] COLLABORATE—that’s how confident I was in CSS and our team’s ability to get things going,” says Miner.
As Trex continues to expand, Jones sees the project as the foundation of a broad operational overhaul. “In manufacturing, the big-time ROI comes from improving manufacturing operations, and that’s what Trex is teeing up for,” says Miner. “It now has both the technical and accounting structure in place to support that.”
Even better, Miner thinks this project will help Trex accomplish a larger goal of removing waste from the environment. The company is one of the only in its niche that uses primarily recyclable materials—Trex now buys about 70 percent of the nation’s recycled plastic bags and adds sawdust to create its composite products. By analyzing consumption and making its manufacturing processes more efficient, the company will be able to lower its prices and increase orders. “If we sell more Trex products, we’ll recycle more and our competitors will be using less virgin plastic,” Miner says. “It’s better for the environment.”