Case Study

ERP Case Study JOHNSON INDUSTRIES, INC.

Company Overview

Originating as a family business in the 1920s, Johnson Industries, Inc. began as a wholesale distributor of auto parts. In 1998, Genuine Parts/NAPA acquired Johnson Industries as a means of expanding into a marketplace that provided parts to vehicles still under warranty and still serviced by dealerships. Today, with annual sales of $150M, Johnson Industries has more than doubled its business by procuring companies in similar markets. With an infrastructure of 11 distribution centers (DCs) and three retail outlets that service more than 2,000 dealerships, Johnson Industries is the largest OEM auto parts distributor in the country. See Figure 1.

Figure 1: Company Infrastructure

Challenges Faced

After acquiring the business in 1998, Genuine Parts/NAPA engaged CD Group, Inc. to conduct an audit of the JD Edwards software implementation that Johnson Industries had previously contracted from another consulting firm. CD Group discovered that the entire project budget was spent and only the General Ledger module had been implemented. CD Group also concluded that as a result of acquiring businesses and not consolidating functions or duties across the organization, no clear strategy had been defined as to which business processes were to be centralized versus distributed and what the final solution would look like upon completion. Specifically, CD Group discovered duplicate and/or inconsistent business practices and rules, IT systems, and job duties across the organization as illustrated by the following: Critical business practices, such as invoicing, applying cash, purchasing, and paying suppliers, were being distributed across several DCs, impeding management’s ability to ensure consistent accounting practices company wide. Purchasing from multiple DCs generated multiple statements, requiring payment to be sent to multiple places, thereby creating multiple corporate identities. Business information was...