Supplying the solution

31 Jan 2003

Starting out 21 years ago printing computer manuals SerCom Solutions has evolved its business to become a leading provider of supply chain management services to the information technology and telecommunications sectors today.

Embracing opportunities and threats presented by the internet was paramount if SerCom was to remain in business. Within its market there has been a lack of companies offering a comprehensive end-to-end solution with many offering rather fragmented services. This limitation was seen as an opportunity for SerCom to offer a true value-adding proposition to its customers. Today it aims to differentiate itself from competitors and position the firm as a global provider of e-business solutions, specifically ‘everything behind the button’.
To achieve this goal, SerCom created a worldwide internet-based fulfilment system. The firm implemented this project in just nine months. It was looking for an enterprise resource planning (ERP) solution. It is unlike other companies in that it is very close to the industry and, therefore, knew what it wanted. In the end SerCom chose SAP 4.6C as a system and Dublin-based Unitech as a consultant company on the project.
Managing director Kevin Henry (pictured) was responsible for the expansion of SerCom from a single 45,000sq ft facility into three locations and for the increase in employees from 90 to 600. He explains how the firm used technology to reinvent itself: “Our business has totally changed in the last 10 years. A good example of that would be the way supply chain management used to be. A big customer, be it Dell or IBM, would forecast their own MRP [material requirement planning] and ERP and send that on to us. We, on their behalf, would buy various pieces, often from third parties in the Far East. Now we have used technology to ensure that our customers have a forecast or likely demand profile. We are using technology so that everybody in the supply chain is seeing the likely customer demand at the same time.
“For ourselves, it [SerCom’s global internet-based fulfilment system] enabled business growth without an equal growth in bodies. As they say, if you double your business, you have to double your management. But we did not have to do that,” he explains.
This single, integrated web service allows SerCom to act as a global outsourcing partner to many of the world’s leading technology and telecommunications companies. The SAP 4.6C system allows SerCom to interface not only with its customers’ IT systems, but with the systems of its customers’ suppliers, driving efficiency, performance and the flow of information across the supply chain. Also, its real-time customer information system can be accessed and updated from any location.
“We are now able to supply directly to our customers and, in many cases, we are delivering right onto their manufacturing lines. The main advantage of this is economies of scale. There are many commodities and we are buying many parts for OEMs [leading original equipment manufacturers that buy in bulk such as Dell or IBM]. We can buy it cheaper and, secondly, we have it sitting on our shelves because of our consignment deals, so the lead time is much less.
“We deliver straight onto manufacturing lines that cuts the need to warehouse at all, ie it cuts out the transaction costs of warehousing. Monstrous savings can and have been made by outsourcing parts of your supply chain management system,” Henry says.
Companies are increasingly outsourcing key aspects of their supply chains in order to achieve shorter lead times to market, reduce inventory levels and achieve more cost-effective and efficient distribution, Henry adds. SerCom’s blue-chip customers include Dell, Canon, IBM, Palm, Microsoft, Nortel Networks, Lucent Technologies, The Learning Company and 3Com.
The worldwide internet-based fulfilment system has been a success, but it is by no means over. The company sees its e-business strategy as a continuing process. Every three months the team meets to discuss any new requirements and functional additions or changes in the system. From these meetings a list of new projects is assembled and the company sets about undertaking as many as possible. This continual assessment and change keeps SerCom ahead of its competition and in a position to attract more business.
“There are absolutely no reasons that we have to confine ourselves to the IT sector,” Henry says. “The reality is that the IT sector has been the first and the most advanced in supply chain techniques, but I think it will come into other sectors. They [other sectors] need to sharpen the pencil in terms of cost and the obvious sectors would be the pharmaceutical and medical device areas. Also, there are plenty of opportunities in semi-state sectors as a lot of budgets have tightened up. It gives these sectors a chance to examine how they are doing things, whether there is a better way and if there should be more outsourcing. I am firmly convinced that there should be. We will see all those sectors starting to follow the lead of the IT industry. SerCom will be happy to help them.”
By Lisa Deeney