Case Study

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RSA MicroTech produces and distributes industrial fertilizer products to coast-to-coast wholesalers from four production facilities connected through their headquarters in Marysville, Washington. Orders range from a few hundred up to tens of thousands of dollars and total between $12 million and $15 million in annual sales. Along with managing inventory for the on-demand orders that can comprise up to half of all the orders it gets, RSA MicroTech must also meet complicated reporting requirements that differ for each state in which it sells. Although RSA MicroTech used Open Systems Accounting Software (OSAS) for some time, it used an older version that didn't have the enhancements that simplify workflow. And there was little connectivity between production facilities and the company's headquarters, making things inefficient and cumbersome. There had to be a better way.

The Problem

RSA MicroTech used OSAS at its home office and at one of its production facilities in Kansas to enter orders, manage inventory, and complete accounting. But since the home office wasn't directly connected to any of the production facilities, accessing and transferring data was difficult. "We would upload the data file from Kansas and the other facilities would dial in remotely," says Ralph Rogers, RSA's corporate controller. "It was cumbersome to get the data from Kansas and it was very slow for the remote users to pass all that data back and forth over the phone line."

Because of this limited connectivity, order processing was centralized at the home office. While adequate, this practice made fulfilling on-demand orders more difficult and delayed physical inventory processing. All procedures - such as filling orders or tracking down inventory issues - were initiated at the home office, slowing business.

RSA faced other difficulties meeting the reporting requirements for states in which they sold products. Many U.S. states require companies to report the amounts and types of fertilizer they sell in those states. And these requirements differ from state to state: one may require companies to break down the report by county, while others only want the state as a whole. And most states penalize companies if reports aren't made on time.

"In the past, someone had to go through all the invoices and figure out where products went," Rogers says. This task was more difficult because "although it's being billed from Iowa, the actual fertilizer may have been delivered to Iowa, North Dakota, South Dakota, and so on." Each invoice would be scanned individually to determine where the goods went so that reports could be done as the law required.

The Solution

With help from TBC International (RSA MicroTech's OSAS reseller), Rogers upgraded OSAS and switched from Windows to Red Hat Enterprise 3.0 for the wide area connectivity needed. They then connected all branch facilities to the home office with a virtual private network (VPN) and terminal emulation software that lets employees access OSAS over the Internet with a permanent, secure live connection.

TBC helped RSA MicroTech modify OSAS to automate reporting. Says Rogers, "They set up reports to pull from the ship-to address instead of the bill-to address so we could report the correct information to the correct regulatory body."

Mike Scully, a TBC consultant, describes the modifications this way: "It used to be just weeks and weeks of work for people. Now, we've turned it directly into spreadsheets: push a button and boom, here's everything for this state, broken down by county or by whatever the requirements are. As a final step to ensure the new system would be successful, Rogers and TBC trained RSA MicroTech's personnel. Employees were brought in to the home office from field locations, production facilities, and warehouses for training, letting them to focus on the tasks at hand without distractions.

The Results

The wide area connectivity offered by Red Hat Linux has let RSA MicroTech disperse order processing back to its production facilities, streamlining business flow. "Now they do their own data entry, run their own variance reports, and can investigate variance when it occurs," Rogers says. "Inventory runs smoother because when something is out of line in inventory, they know about it first and can check it."

"Because sales representatives are always connected to all locations via the VPN, they can access information and check for item availability at other warehouses. Rogers says, "It's really about information access. If they want to know about a specific product in a specific warehouse, they don't have to stop, call here and have somebody check; they can just go find out for themselves."

Red Hat Linux has proven to be a better fit for how RSA MicroTech does business. "Performance-wise, when you compare OSAS on Linux to OSAS on Windows, it's an order-of-magnitude faster. It's no longer a network environment in terms of data sharing. Disk activity stays on the Linux box, increasing performance," Scully says. Red Hat Linux has also improved RSA MicroTech's bottom line by saving money. "We didn't have to invest heavily in T1 lines and stuff that causes infrastructure costs to go up. It's very cost-effective because we're paying for an Internet connection on one end and then there's no cost after that," Rogers says. "The machine didn't have to be as robust to process all the users who are on it now," he continues. "It's been very stable - it doesn't crash; it doesn't lock up. For the most part, we leave it back there and we really don't think about it too much."

Because of their OSAS modifications, RSA MicroTech also saves money by avoiding state-assessed penalties if reporting isn't completed on time. "Our ability to generate the information and provide it to the states in a timely manner has been a cost savings. It's allowed us to avoid penalties simply because we can collate the data and respond to their timeframe," Rogers says.

Training and working with OSAS daily has also made a difference for employees and has smoothed their workflow. Rogers says, "They have a better understanding of OSAS and can utilize the information better. They now understand that this negative number means that the product was pulled from the wrong code and they can investigate those things."

RSA MicroTech has found the recipe it needed for continued growth: knowledgeable, connected employees that use streamlined business practices to minimize costs and maximize profits - all made possible with OSAS and Red Hat.