EPICOR Strengths: supporting multi-company organizations
Distributed organizations whose subsidiaries operate as separate businesses often face challenges with their part and pricing policies. Their centralized organization-wide controls create many problems, but these can be effectively overcome by using the mechanisms built into EPICOR Kinetic ERP. This allows for maintaining full control over part distribution and pricing policies across the entire organization, speeding up processes and eliminating errors.
Such mechanisms are commonly referred to as multi-company support. They provide a simple, consistent way to calculate the cost of producing individual products in factories located in different countries and to adjust local pricing policies accordingly. The main challenges are differences in production costs, taxes, duties, currencies and other charges resulting from shipping, as well as the settlements of “intra-group” transactions between subsidiaries.
EPICOR Kinetic ERP allows each new product to be entered into a central register and the information contained therein to be distributed to other subsidiaries. At the same time, a price calculation is performed according to a defined algorithm and criteria, and it is also automatically communicated to all members of the organization.
This allows the system to handle also the internal transactions in an automated way. When one company enters an order, it is sent to the other company. All the necessary documents are generated automatically – from the manufacturing stage to distribution. Among other things, a sales invoice is generated and sent to the ordering company, where it is posted as a purchase invoice. Of course, different price lists – internal and external – function consistently within these mechanisms. All this is a standard part of the system. There is no need to set up data exchange formats. All settings are made using the built-in functions.
Such mechanisms are used by one of our customers, Cold Jet, with its headquarters in the US and several branches throughout Europe that operate as separate organizations.
Cold Jet has two business lines involving the use of dry ice. The company manufactures systems for eco-friendly cleaning, surface treatment and finishing of parts for many industries around the world. Secondly, they are producing systems for making, dispensing and packaging dry ice for use in food transportation, refrigerated supply chain management and dry ice cleaning. The Cold Jet equipment is manufactured in the United States and in Poland and Denmark. However, the other subsidiaries in Europe – including Germany, Belgium and France – only handle their sales and distribution. Obviously, the price for one subsidiary that buys the product from another will be different from the price for the end customer. The problem is even greater when the company is not large, but the number of transactions is significant.
Using the built-in functions of EPICOR Kinetic ERP, we have given the head office in the USA full control over the pricing policy. Prices are calculated based on planned production costs, separately for each country where sales take place. At the same time, different price lists are used for inter-company transactions and for end customers.
Cold Jest’s problem was compounded by the fact that the company’s business is thriving, with the sales of equipment growing, while its human capital remains constant. It has several hundred employees in the United States and from a dozen or so to several dozen per company in its European subsidiaries.
The implementation of EPICOR Kinetic ERP allowed speeding up transactions and improving the efficiency of the financial processes. Thanks to a centralized database of items, the management is keeping its finger on the company’s pulse.
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