Lindab

Global HVAC Duct Manufacturer Uses Technology to Support Its Growing Business

Lindab is a global leader in the manufacture of sheet-metal ventilation products, with decentralized operations in 28 countries and annual revenue of U.S.$820 million. Lindab needed a common technology strategy that would efficiently address the diverse needs of its international subsidiaries. Lindab's mainframe system, created in-house, was difficult to localize for new operations, and some established operations had installed an inflexible enterprise resource planning system that was costly to implement and maintain. Lindab chose Microsoft Dynamics™ AX, formerly known as Microsoft® Business Solutions–Axapta® software, because it is easy to configure and because it scales according to size, number of users, and operational complexity. And, because the software is easy to integrate with other software, Microsoft Dynamics AX streamlines business process flows at Lindab.

Situation

Since its inception in 1957, Lindab Group has pioneered new metal building-material solutions that simplify construction. Based in Grevie, Sweden, Lindab employs roughly 4,000 people throughout Europe and in growing operations in the United States and Central Asia. Architects and construction professionals prefer Lindab round metal ductwork because of its rigid and precise construction as well as its unique double seals that typically improve energy efficiency 90 percent over competing products.

During the 1990s, Lindab's innovative products were making fast headway in new markets in the United States and Eastern Europe, with the U.S. group growing from just a dozen people in 1993 to become the largest manufacturer of sheet metal products for ventilation by 2003. Unfortunately, Lindab lacked an IT strategy to adequately support this growth opportunity.

Lindab's IT environment consisted of a mainframe system, developed within the company, for use in Scandinavia. Lindab extended this system into smaller, European operations with localized versions running on the Microsoft® Windows® XP operating system. Because the system was built in-house, each new localization required significant effort that was disproportionate to the benefit received. Moreover, some operations used completely different systems. Germany and Denmark, two larger European operations, adopted a European enterprise resource planning (ERP) product that ran on an AS/400 computer.

In 1999, the Lindab Board of Directors decided to abandon the company's legacy technology and move to a more modern system in which it could safely invest future IT resources. The ERP system used in Denmark was tapped for use throughout Lindab, but complex implementation and dependence on the vendor for customizations soon convinced the corporate IT group that an alternative was necessary. “We had built the previous system ourselves, so our people were used to being able to request changes as needed,” says Bertil Hökerberg, Systems Engineer. “With the chosen ERP system, we couldn't do anything. If we wanted to change or modify some functionality, we were totally dependent on the vendor. Making changes was time-consuming and expensive.”

Solution

Lindab IT professionals saw an earlier version of Microsoft Dynamics™ AX, formerly known as Microsoft Business Solutions–Axapta® software, in 1999 and recognized it as a solution for the company's problems. “From a technical standpoint, it was modern, based on Microsoft standards; it was something we could change and modify,” explains Hökerberg.

Currently, 50 percent of Lindab's international subsidiary companies are using Microsoft Dynamics AX, with more companies coming onboard as Lindab adds new operations and switches over established operations. In terms of users, the Microsoft Dynamics AX user community at Lindab has grown from 35 people in 2001 to approximately 650 users in 2006. Lindab uses Microsoft Windows SharePoint® Services to manage Microsoft Dynamics AX project communications between internal team members and external consultants.

Each Lindab subsidiary has its own software installation of Microsoft Dynamics AX. Lindab uses Microsoft BizTalk® Server 2002 Enterprise Edition to communicate between subsidiaries' separate Microsoft Dynamics AX installations. Microsoft BizTalk is also used to exchange electronic data interchange orders with customers, vendors, and business management systems outside of the company. With some exceptions, all the server hardware and databases are running in Sweden, with thin-client access at the local companies. This centralization of core IT functions provides lower configuration and maintenance costs. Lindab employs wide area network and virtual private network technologies for connectivity between local companies and Sweden.

In order to ease implementation at new sites and create further efficiencies, Lindab developed a standard setup of Microsoft Dynamics AX, which serves as a base upon which different country operations can add their own functionality. The standard setup covers functions which all Lindab operations share in common, as well as required policies, such as adherence to the European Union chart of accounts. Local companies also modify their Microsoft Dynamics AX implementations to satisfy local accounting rules and special business conditions.

A local Microsoft partner plays an essential role in Lindab's Microsoft Dynamics AX strategy. Microsoft Gold Certified Partner Columbus IT helped with Lindab's first Microsoft Dynamics AX implementation in the United States in 2001 and has since partnered with Lindab worldwide in other local implementations. Because Columbus IT is trained on Lindab's standard setup of Microsoft Dynamics AX, they provide efficient implementation and support services. Columbus IT also maintains collaboration with the main Lindab IT group in Sweden and helps develop new functionality.

As of July 2006, Lindab began integrating a Manhattan Associates warehouse management system with its Microsoft Dynamics AX solution in the United States. The Manhattan Associates Supply Chain Execution for Dynamics AX solution will increase efficiency and allow Lindab to continue its rapid growth in the U.S. market.

Benefits

Microsoft Dynamics AX is a flexible, powerful foundation for Lindab's growing global business, providing reliable technology that adapts to local business needs, integrates operations, and supports business innovation. With Microsoft Dynamics AX, Lindab can confidently invest in expertise and modifications, knowing the technology will support business in years to come.

“With Microsoft Dynamics AX, we have created the business management platform that will support the company strategy to be twice as big, based on growth and acquisitions within a five-year period,” says Christer Ericsson, Chief Information Officer for Lindab Group.

Provides Reliable, User-Friendly Solution

Not only does Microsoft Dynamics AX provide a reliable, long-term investment, but also it delivers real, day-to-day benefits, such as stable operation and user-friendly features. “Microsoft Dynamics AX was a lifesaver because we rarely experienced interruptions during the workday; we didn't have to restart the server every five minutes. And there were nice, user-friendly, Microsoft features, like error reports, training, and Help screens,” says Jamie Cole, Materials Manager for Lindab in the United States.

Adapts to Local Business Demands

The configurability of Microsoft Dynamics AX is essential to meeting the needs of diverse Lindab subsidiaries. “Lindab's U.S. factories can produce five billion possible product configurations. Fortunately, Microsoft Dynamics AX is flexible enough to support our unique pricing system,” says Steve Emmons, Lindab IT Line Division Representative.

Emmons is in charge of Lindab's pricing scheme in the United States. Instead of having to manually calculate the price of those products, he can run orders through a three-tier pricing matrix, enabled by Microsoft Dynamics AX. That matrix takes into account materials cost, customer discounts, and configuration.

Scalability is another important factor in favor of Microsoft Dynamics AX. While some locations may have up to a hundred simultaneous users on Microsoft Dynamics AX, others in the Baltic countries or Central Asia may have only a couple of users. “With Microsoft Dynamics AX, we have the possibility to provide a solution for even a very small company. You could basically run it on a laptop, if you like, and then use it to manage your growing operation,” says Hökerberg. “Implementing a traditional ERP system for such a small company is prohibitively expensive.”

Integrates and Streamlines Operations

Microsoft Dynamics AX enables streamlined business flows that reduce costs and add a competitive edge. Because Lindab adopted Microsoft Dynamics AX early on, the U.S. operation has become a laboratory for new integrations and uses of the solution. In the United States, there are no standardized fittings for ventilation ductwork as there are in Europe; therefore, roughly 65 percent of Lindab's U.S. production is made-to-order. This high level of customization presents complex manufacturing challenges, especially as Lindab differentiates itself from U.S. competitors with dramatically shorter delivery times—usually just eight days compared with the three to four weeks that competitors take.

Lindab can make and deliver products on time because of streamlined order management facilitated by Microsoft Dynamics AX. “Microsoft Dynamics AX integrates the business processes in sales, operations, and production so that all the people involved are pulling information from the same source instead of multiple sources,” says Cole. “Microsoft Dynamics AX unifies our entire business into a single, streamlined whole. We've been able to do with it whatever we need.”

Facilitates Business Innovation

Through innovative integration, the benefits of Microsoft Dynamics AX to Lindab's U.S. operations extend to resellers and direct customers, as well. For example, Lindab created a computer-aided design (CAD) add-on called CADvent® that allows engineers to quickly create an accurate bill of material from a CAD drawing. CADvent integrates with Microsoft Dynamics AX to automatically generate up-to-date product data. This add-on is a powerful timesaver for architects and builders who want to easily tap Lindab's expertise and make sure they are not missing any crucial parts--a situation that might delay construction schedules. As an added bonus, Lindab employees no longer have to manually create a bill of materials.

Lindab also teamed with a building engineering software leader to create the Lindab Client, a Web-enabled pricing system that pulls data from Microsoft Dynamics AX. This product has proven phenomenally successful and supported the processing of more than U.S.$20 million in customer-created quotations in the first few months of its launch.

Microsoft Dynamics

Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what's most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success. 

For More Information

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For more information about Columbus IT products and services, call (45) (70) 20 50 00 or visit the Web site at: www.columbusit.com In the United States, call (800) 736 7766.

For more information about Lindab AB products and services, call (46) (0) 431 850 00 or visit the Web site at: www.lindab.com