As a global leader in lifting and fastening technology, Kito Crosby manufactures and distributes products such as essential lifting and rigging solutions, specialized hardware, cranes and electric hoists. Kito Crosby is headquartered in Richardson, Texas, and has operations around the world. At the center of his Mission statement security, innovation and global impact.
With a diverse portfolio of brands – Kito, Crosby, Harrington, Gunnebo Industries, Peerless and eepos – the company experienced rapid growth, increasing its revenue from millions of US dollars to around one billion US dollars. But after numerous acquisitions, the company was left with a fragmented IT landscape of outdated, unsupported and unscalable systems.
In order to create a unified digital core and standardize processes, Kito Crosby chose RISE with SAP and implemented SAP S/4HANA Cloud Private Edition, aiming to achieve its long-term strategy of a single global instance.
A successful strategy Towards the cloud
Kito Crosby adopted a greenfield clean core strategy to eliminate existing fragmentation and enable long-term scalability, said Johnson Lai, Chief Digital Transformation Officer and Chief Information Officer, in an interview. “We previously did not integrate our ERP systems, so our IT landscape was very fragmented and our business process capabilities were limited,” he said. “That's why we wanted to renew all of our ERP systems and
“Initiate significant changes for the entire company with a new implementation.”
The greenfield and “clean core” approach—essentially setting up an entirely new system that prioritizes standard features over customization—were crucial in rectifying Kito Crosby’s current technology landscape so that processes such as order fulfillment, accounting, manufacturing, and shipping could be integrated. This approach also enabled the company to take a closer look at core processes and optimize processes, especially in warehouse management and sales and production planning, emphasized Lai.
Since Kito Crosby did not have the internal staff to set up the servers and infrastructure for this project scope, they decided to use RISE with SAP SAP S/4HANA Cloud Private Edition. “SAP has a lot to offer and we wanted to take advantage of that,” said Lai.
The company began its transformation in North America because it is its largest market and operating an older, unsupported ERP system there posed the greatest risk.
Change processes should not be underestimated
Although the workforce was initially motivated and energetic, according to Lai, they quickly became overwhelmed by the size of the project.
Paradoxically, many wanted to adapt the new SAP S/4HANA Cloud Private Edition solution to work like the old technology. “Everyone is convinced of the “Clean Core” approach until it comes to their own functions. Then you would rather have individual adjustments. There was some resistance to using simple features,” Lai said. “But once we showed people live demos with their own data, that resistance slowly faded,” he added.
The IT department in particular was keen to build and operate its own infrastructure and servers and not leave it to another company. A certain sense of responsibility is important, says Lai, but since Kito Crosby ultimately had to quickly replace its legacy system in North America, it was necessary to work with SAP. And it was the right decision: “Some of those who initially wondered why we outsource some of the tasks to SAP have now become our biggest advocates. We find that working with the SAP team is no different than working within our teams.”
According to Lai, companies facing a digitalization project should “never underestimate the impact of changes on employees.” Global projects require extensive planning and appropriate time for employees and managers to get involved.
Experience and advantages of Cloud ERP
Modernizing the ERP system brought Kito Crosby measurable benefits, including improved customer service, better inventory control, and more efficient manufacturing and warehouse operations. Thanks to improvements in business processes and optimized system functions, Kito Crosby's delivery reliability reached its highest level in 10 years.
“We are seeing these benefits around the world and look forward to leveraging our experience gained in North America globally to bring together all the small ERP systems that are outdated and unsupported into one SAP system and achieve a single global authority,” Lai said. Since Kito Crosby started using SAP S/4HANA Cloud Private Edition productively and fully leveraged its native features, the company has achieved measurable benefits and benefited from optimized business processes. The transformation delivered significant performance improvements in key metrics, such as more on-time customer deliveries, significant reductions in backorders, higher inventory accuracy, and faster cross-company processing.
At the same time, new standards are being set in terms of efficiency in warehouse operations and record quantities are being achieved for removal and storage, replenishment and shipping. These results were achieved safely, without injury, and with fewer resources.
Switching to the cloud
Following the recently completed acquisition of Kito Crosby by Columbus McKinnona world-leading developer, manufacturer and marketer of intelligent motion control solutions, Kito Crosby continues to build on its strong digital foundation.
“Because we started with a new implementation and followed the Clean Core approach as much as possible, we believe the upgrades will be even faster and with less effort,” said Lai. “We want to introduce the latest version of SAP S/4HANA Cloud Private Edition to leverage the AI capabilities of joules can use.”
The next plan is to consolidate the SAP ERP Central Component (SAP ECC) 6.0 system in Europe.
“This is just one example of how our IT team supports the entire company in continuing to delight our customers and end users,” explained Lai. “As we continue to expand our business activities, we expect additional benefits from the technology, advanced features and AI tools in our SAP landscape.”
Gillian Hixson is an Integrated Communications Specialist at SAP.
