Transformation with New Technology

In 2005, executives at KIK Custom Products—a Canadian company based in Concord, Ontario—saw the opportunity to quickly grow revenues from $250 million to over $1 billion USD through three strategic acquisitions over a two year period. Today, KIK is one of North America’s largest custom manufacturers of both retailer and national brand consumer products. But management knew rapid growth would come with challenges.

KIK management was looking for a way to migrate its Contract Manufacturing division (which manufactures products for national brands) and Retailer Brand division (which makes private label products), to operate on the same Oracle JD Edwards enterprise resource planning (ERP) system to streamline financial reporting across divisions and to accommodate increased manufacturing capacity, however, this objective had to be achieved incrementally.

To begin with, KIK management focused on implementing JD Edwards EnterpriseOne financial solutions for general ledger to successfully standardize financial management across the entire organization. This involved robust interfaces with four different ERP systems. The KIK management team then set their sights on standardizing the Contract Manufacturing division to JD Edwards World. With these critical goals achieved, KIK management most recently worked with Oracle Diamond Partner, Deloitte to replace a legacy ERP system in the Retailer Brand division with Oracle’s JD Edwards EnterpriseOne.

Sam Porcasi, Vice President of Information Systems at KIK, knew it would be a challenge to find a technology partner to support its far-reaching, incremental ERP plan. Management decided to work with Deloitte because of Deloitte’s strong presence across Canada and because its consultants combined real-world management and training expertise with outstanding knowledge of JD Edwards. “The Deloitte team understood where we were and where we were going. The comfort level was there,” he says. “We had a clear vision on what we wanted to do, and Deloitte helped us articulate that approach and obviously execute it.”

Along with applying successful project methodologies, Deloitte consultants also worked with KIK leadership to help them see the ERP implementation project as a way to also instigate change management across the organization. “We tend to look at technology projects more as transformational projects,” says John Shelley, “Our focus is on organizational readiness, which comes from a combination of change management and throughout the project, risk management.”

With Deloitte’s guidance, KIK leaders decided to standardize on Oracle’s Red Stack, including Oracle Fusion Middleware, and leverage Oracle BI Publisher for custom-facing labels and reports. In 2009, the project team began implementing JD Edwards EnterpriseOne in layers. First, the emphasis was on implementing JD Edwards EnterpriseOne Orders-to-Cash to tackle distribution issues. At the end of the first phase, KIK had an integrated solution for managing sales orders from entry to accounts receivable. Second, in 2010, KIK started the next phase to implement Procure-to-Pay and Manufacturing, which was completed by the end of 2010. The project went live in January 2011 on budget and two months early.

The new Oracle JD Edwards EnterpriseOne system in the Retailer Brand division has enabled KIK to expand capacity to manage many more orders than was possible in the past. For example, any order in the system needs to be validated with 30 tests to ensure that pricing and other aspects are correct. In KIK’s legacy system, validation would take up to three hours, with more time required if any problems were identified. “We re-created order validation in JD Edwards,” says Porcasi. “Today order validation has gone from hours to minutes or less.”

For their part, Deloitte staff attributes much of the success of the sometimes-challenging project to KIK’s engagement. “KIK has a strong entrepreneurial spirit. There was always a very positive attitude and the right people coming to the table to find a solution,” says Shelley. “We had a collaborative relationship with KIK—their expertise in the business and our expertise in the system.”

For the future, KIK management is clearly keeping an eye on continued growth, “Our business model is changing,” observes Porcasi. “We do try to make decisions against what the future business looks like, not what it looks like today.”