Erie Shipbuilding

Shipbuilder Streamlines Accounting, Supports Growth with Business Software.

Since 2005, Erie Shipbuilding has provided services that include the building, repairing, and converting of cargo vessels. Erie Shipbuilding had accounting software in place for financials, order entry, and purchase orders, but found that it needed production statistics and more attention to detail to meet companywide growth. To track work in progress, determine percent completion, and calculate earned revenue, Erie Shipbuilding decided to implement Microsoft Dynamics™ GP. Since then, Erie has gained newfound insight into project status based on task and labor hours, and achieved the functionality it needs to provide accurate estimates on future projects.

Business Needs

“To support the sophisticated project management and accounting required by our growing business, we turned to Microsoft Dynamics GP.” Kenneth Boothe, Jr., Program Manager, Erie Shipbuilding

Erie Shipbuilding provides services that include the building, repairing, and converting of cargo vessels. When Erie Shipbuilding entered the industry in 2005, the company had 50 employees and could manage operations and drive business through a combination of QuickBooks Enterprise Solutions Contractor Edition 7.0, outsourced services, and manual processes.

With software in place for day-to-day accounting, including financials, order entry, and purchase orders, Erie Shipbuilding found that its growing business needed production statistics and more attention to detail than it was getting from its present system. Erie Shipbuilding also outsourced payroll, but found that this still required timesheets to be managed internally—a process that took one human resources (HR) staff member four hours or more each day to complete.

When it came to purchase requisitions, employees submitted handwritten bills of materials to purchasing department staff who would then enter the information into the accounting software.

Since its inception, Erie Shipbuilding has faced significant growth. Three years later, the company has grown to 150 employees and seen similar growth in both the number and complexity of projects. The once effective disparate and manual processes at Erie Shipbuilding now posed significant challenges. For example, the outsourcing of payroll left Erie Shipbuilding with the daunting task of correlating timesheets and payroll information with project status. As a result, the company could not easily create the reports needed to gain insight into productivity, percent completion, and profitability by worker, team, or task.

Erie Shipbuilding understood that it would need to achieve this degree of visibility into operations if it were to gain the levels of efficiency and profitability needed to grow the bottom line. The company also saw such visibility as critical to creating more effective profit analysis and cost estimate validations for specific tasks and shipbuilding projects.

Solution

Erie Shipbuilding concluded that it needed a single solution that could manage diverse business processes and provide detailed analysis capabilities. The solution would also need to ensure scalability and facilitate user adoption. Erie Shipbuilding considered several options, including implementing a solution created specifically for shipbuilding, extending its accounting software with additional packages, or implementing Microsoft Dynamics™ GP for financial and operational functionality that could be tailored to meet business needs. Erie Shipbuilding found that Microsoft Dynamics GP offered an array of capabilities for finances, manufacturing, project accounting, HR, and payroll, while providing seamless integration with other Microsoft® products and technologies.

Erie Shipbuilding understood that the interoperability between Microsoft Office Excel® and Microsoft Dynamics GP would help speed adoption and help users in accounting and business management functions be more productive.

A Microsoft Gold Certified Partner customized the Project Accounting and Payroll modules to provide project managers with the ability to conduct detailed analysis of labor usage and project costs. Now when employees record their hours, the hours are associated with a project, materials, percent completion, and cost category. Cost categories include more than 1,000 tasks that are specific to projects. Employee hours are also associated with a labor rate that feeds into payroll.

Microsoft Dynamics GP enables Erie Shipbuilding to take project information and generate rich reports, such as labor per area and work center, project labor hours, and project materials. Now on-site valuation analysts can more quickly and accurately track work in progress, determine percentage completion, and calculate earned revenue. “We can see the total budgeted cost associated with a project, and we can view this cost at a number of levels, helping us run the reports that we need,” says Kenneth Boothe, Jr., Program Manager at Erie Shipbuilding.

Microsoft Dynamics GP also helped automate once manual processes. When employees submit a purchase requisition, they do it through Business Portal for Microsoft Dynamics GP. The order is then automatically sent through a predetermined hierarchy of approval.

Benefits
Microsoft Dynamics GP provides newfound visibility into operations across Erie Shipbuilding. Now that all departments share project and labor information through a centralized solution, Erie Shipbuilding can make better informed decisions.

Integrate Business Processes
The ability to share data across diverse business areas has significantly improved operations throughout Erie Shipbuilding. For example, the once manual process of requisitions is now automated.

In addition, the integration of project accounting with payroll enables the HR administrator—who was once tasked with divvying payroll dollars into projects and posting those figures into the general ledger—to spend more time on HR projects. The time associated with managing payroll has been reduced from four hours a day to only two, saving approximately 500 hours a year.

Improve Visibility into Projects
The centralization of labor, financial, and project management data provides Erie Shipbuilding with a holistic view into operations and dramatically improved project accounting. Says Boothe, “With Microsoft Dynamics GP, we can actually see expended labor hours per task on a project. This has helped us distribute our workload in a much more manageable way.”

When Boothe reviews historic project information, he can identify trends and effect positive change across the organization. “We’re monitoring each project and actually seeing a difference in our labor requirements each time we produce a new ship,” says Boothe.

As Erie Shipbuilding continues to grow, the number and variety of projects will inevitably increase. However, the company finds comfort in knowing that Microsoft Dynamics GP will help it provide accurate cost estimates as time goes on. “I expect to control costs better than we ever have in the past,” says Boothe. “With Microsoft Dynamics GP, we can view costs at such a high level of detail that we can use historic project information to accurately adjust our bids on future projects.”