Lorenc Logistic – a new system will help us to grow and be more effective. It has already increased our effectiveness by 40 %

Lorenc Logistic entered the Czech market in 1992. Originally a carrier and forwarder from Klatovy, it now also offers its own warehouses, truck service, refueling station and a carwash. Despite the economic crisis, the company maintains a turnover of three hundred millions CZK a year and is planning to expand abroad. Microsoft Dynamics NAV, an international system supporting national languages and legislation, is to help with this goal.

The old system was limiting the company’s growth

kamiony Lorenc Logistic The original corporate information system used by Lorenc Logistic was created specifically for transport companies. As the company continued to develop and expand its services, there was a higher need to implement a complex solution, especially one allowing an easy system connection abroad. The reason for this need is the fact that Lorenc Logistic, which managed to grow from a small family business into an important player of more than a local influence, expanded to Wloclavek, Poland. As the company continued to grow, there was pressure to interconnect the company system with customers‘ information systems, to improve the financial management, especially when it came to speed, and to solve many other requirements, which the current corporate information system was not able to fulfill. The need for a new, versatile and more flexible system supporting national languages and legislation became apparent. The company decided to employ a new system in 2008, when the global economic crisis first became visible in the logistics business. It didn’t stop the company’s development though – at the time it was rather limited by the current information system than by the crisis.

The new system had to be able to grow with the company

In the internal contest, the company has chosen Microsoft Dynamics NAV implemented by NAVISYS. Microsoft Dynamics NAV had several important advantages – it was sufficiently versatile, it was easily adjusted for the company needs and it also supported the international environment. The system implementation started in the second half of 2008 and took less than a year to complete. The new system brought important changes to the day-to-day company life. Employees must be able to input much more data to the system, but it provides the management with an immediate and detailed overview of the company activities using various reports that management had defined in cooperation with NAVISYS. Microsoft Dynamics NAV also allowed the company to directly connect with customers‘ information systems, so customers have the required reports in real time, not in several weeks as before.

New system offers a complete review of the company activities

Microsoft Dynamics NAV with BIZ4Logistics has affected all of the company departments. When it comes to dispatching, the management has on hand the overview of transport per individual dispatcher, vehicle or customer and it’s easy for them to view destinations, expressed volume, turnover and profitability for individual orders. It’s also easy to simply compare prices from a customer to a price for the carrier (in case of forwarding) and prices from a customer to calculated transport costs (in case of transport in own vehicles). Management thus has available priceless information on what types of orders and customers are the most profitable for the company at a given time. As for the carwash, the company uses the reports for the overview of washed cars per customer. It’s possible to check the number of washes, type of the washes (what type of a vehicle and what type of washing took place) and, of course, the turnover. Based on the type of washing it's possible to predict a detergent consumption, which can afterwards be compared to the actual consumption. Moreover, in Lorenc Logistic they now know who are their regular and important customers and are able to offer them better customer service, such as little rewards for loyal customers.

Service effectiveness has increased by 40 %

In the truck service area, management has on hand an overview of repairs per each customer, including the repair type, number of repairs and turnover. At the service, the mechanics‘ number of hours worked is also compared to the number of actually invoiced hours and an overview of the direct spare parts sale is also evaluated. Just the option to compare the mechanics‘ worked hours to actually invoiced hours increased the service effectiveness from 50 % to 70 % during the first year of the system implementation. It is mostly because the exact time is now given to a particular repair, and afterwards it's determined whether the mechanic observed this plan, managed to finish the repair faster, or took a longer time to complete the task. In the latter case, the mechanic must state the reason. The company set a goal to reach a work effectiveness of 90 % in the service.

Other areas will be monitored closely as well

Because Microsoft Dynamics NAV with BIZ4Logistics easily adapts, and because of the clear benefits of accurate evaluation of the individual service activities, Lorenc Logistic plans to implement similarly detailed monitoring in transport as well. There it will help to compare full and empty miles (miles with cargo and without cargo), which should help to minimize the number of empty miles and thus reduce the costs for the company. Microsoft Dynamics NAV will also bring another important function to the company, which would be virtually impossible with the previous system – a thorough control over the fuel consumption of company’s vehicles compared to the weight of the cargo and the route profile, which, as the company hopes, will bring further savings on operating costs and increase the effectiveness in the goods transport.

Microsoft Dynamics NAV will help the company to grow

Already Microsoft Dynamics NAV, thanks to its versatility, supports and monitors many more processes than the original system. In Lorenc Logistic, nearly everyone uses it. The new system thus helps to control the activities of all individual departments, such as source documents for wages or negotiations with customers and many more. Besides the increased work effectiveness and a significantly faster transport of the data important for decision making, it also helped the company to satisfy the customers‘ wish for data accessibility for their information systems and helped the company to evaluate which customers and order types are the most profitable. Even now, more than a year after the Microsoft Dynamics NAV was launched, the system continues to develop as the way the company works changes and with management plans to expand its activities behind the boundaries of the Czech Republic.

The case study was published in the annex Business information systems of "Hospodářské noviny" on October 20, 2010.

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