"ERP-Distribution Buyer's Guide"

If you receive errors when attempting to view this white paper, please install the latest version of Adobe Reader.

"Established in 1993, Technology Evaluation Centers, Inc. (TEC) is the first web-native technology research enterprise. TEC is organized in evaluation centers like Enterprise Resource Planning (ERP), CRM, SCM, etc."
Source: Technology Evaluation Centers

Resources Related to ERP-Distribution Buyer's Guide:

• Enterprise Resource Planning (ERP) (Wikipedia)

ERP-Distribution Buyer's Guide

Introduction

Welcome to Technology Evaluation Centers' guide to enterprise resource planning (ERP) for mid-market distributors, third party logistics (3PL) providers, and affiliated companies in the logistics sector.
This guide features information on vendors offering dedicated ERP-distribution solutions for the midmarket. These solutions are all designed to address the logistical, financial, and workflow issues facing the distribution industry today.

Inside, you'll find a chart highlighting 10 featured vendor solutions by installed base and business components, ranging from warehouse, transportation, and inventory management, to international trade logistics, Web commerce, and human resources (HR) and financials.
As well, you'll find an analysis of the state of the market by the editor of Supply Chain Brain. Customer success stories have been included to illustrate how ERP-distribution solutions have helped companies like yours solve distribution and business logistics problems.

For your convenience, there's also a vendor directory to assist companies looking for either full ERPdistribution systems, add-ons, or third-party solutions for the following: demand management (DM), retail systems, supply chain management (SCM), transportation management systems (TMSs), and warehouse management systems (WMSs).
We hope you'll find this guide a useful tool in determining which ERP-distribution solutions are best suited for your company's business model and particular needs.

David Bourque, Technology Evaluation Centers

State of the Midsize ERPDistribution Marketplace

Toward the beginning of this decade, the world's largest corporations were faced with an ultimatum: either invest heavily in new, multifunction, collaborative ERP systems, or stay out of the race to be a global competitor. Those companies that accepted the challenge experienced many difficult and expensive growing pains, but their efforts paid off. Better enterprise IT has catapulted them to the top levels of global competitiveness. That same bet-the-company decision is now facing the thousands of firms that make up the midsize enterprise, i.e., all businesses with annual sales between $50 million (USD) and $1 billion (USD).

Even companies at the low end of this range are finding themselves operating in the global marketplace for the first time. Some are selling more overseas. Most are sourcing or manufacturing offshore. All are competing with foreign counterparts. Whatever the international activity, these companies need IT systems that allow them to participate in global supply chains. Traditional forecast-driven planning must give way to demand-driven business processes. To lower costs, supply networks must reach around the world and be agile enough to change partners in days rather than months. Outsourcing and collaborative partnerships have grown to the point that real-time supply chain visibility is needed throughout the enterprise, from the loading dock to the boardroom.

Besides facing the global challenge, midsize companies are having to deal with the same cost and profit squeezes as their larger competitors. Higher quality IT systems can produce cost efficiency by integrating operations and lowering overhead. Just as important, they can increase sales and revenue by more closely meeting customer demand, improving product quality, and fulfilling orders accurately and on time.
For most companies, whether they are manufacturers, retailers, distributors, or service providers, these business requirements mean having enterprise systems that can truly be the backbone of the companies' operations and strategies, not just their transaction systems. The largest midsize companies have been transitioning away from the old legacy systems for several years, and they have shown their smaller brethren that the time is right to invest in integrated IT systems.

Among the Global 1000 companies, a few very large IT companies have dominated the decade-long shift to highly sophisticated enterprise systems. For midsize companies, the choice of providers is far wider. At least a score of highly respected IT providers offer ERP systems for the mid-market. Many of these ERP providers established themselves in the mid-market to meet the planning and scheduling needs of the thousands of manufacturing companies that dominate the ranks of small and midsize firms. Most of these providers have since expanded their offerings or merged with providers in different markets and different specialties.

Several trends are emerging in the mid-market for ERP systems:

• Rather than develop a mix of best-of-breed solutions, most midsize firms are looking for providers whose systems offer broad functionality, from basic backroom financial capabilities, to operational tasks such as sourcing, product development, and logistics.
• ERP systems can no longer be purely internal IT tools. They must allow companies to extend their supply chains to link with customers, suppliers, service providers, and all other transaction partners.
• Midsize companies prefer to work with IT companies that have specific expertise in their industry, and consequently, most providers in this space tend to specialize functionally, such as in manufacturing or distribution, or vertically, as with food or chemical industries. Midsize companies will definitely seek ERP applications configured with industryspecific functionality.
• Many midsize firms, especially at the smaller end of the spectrum, are turning to providers that offer hosted on-demand systems or software as a service (SaaS) packages. This approach allows for a wide range of ERP capabilities without large up-front investments or big IT staffs.

In summary, mid-market organizations are eager to make more ERP investments, not just to support profitable growth and more efficient operations, but also because such IT investments are viewed as their ticket to the coming era of global competition.

SupplyChainBrain.com is today's most widely used online resource for supply chain management information, providing more than 1.5 million visitors annually with a depth and breadth of coverage unmatched in the field. Visitors access the latest Features, Trends, Case Studies, Research, Analysis, Blogs, Events, Videos, Webinars, Podcasts, White Papers, Interviews, Opinions, Jobs and News associated with more than 65 highly organized channels of content.

SupplyChainBrain and its well respected content partners delve into each and every aspect of the supply chain. In addition to the fundamental principles of supply chain management, SupplyChainBrain offers forward-thinking ideas and cutting-edge solutions. By identifying emerging trends, technologies and best practices(and continuing to write about these as they evolve and mature)SupplyChainBrain provides coverage that is both practical and visionary.

The Nerve Center for Today's Supply-Chain News, Developments & Innovative Thinking

Methodology

This buyer's guide examines vendor capabilities across four business areas:

1. supply chain management
2. distribution process management
3. distribution process management
4. back office

The ratings are based on the major criteria organizations consider when evaluating an ERP-distribution solution. It should be noted that the ratings are intended as a guide only. To determine the vendor solution that best meets your organization's distribution software requirements, a needs assessment should be conducted, with the results of the assessment measured against the ratings found in this guide.

Rating Definitions

These ratings indicate the scoring of the vendors based on the four business areas listed above.

1. The solution has good functionality in this area. The solution will deliver above-average capabilities or complete functional support of this component out of the box.
2. The solution has adequate functionality in this area. The solution will deliver partial functional support of this component out of the box, with the remaining functionality delivered through customization or third-party integration.
3. The solution has poor functionality in this area. The solution will deliver minimal functional support of this component out of the box, and will typically deliver this functionality through customization or thirdparty integration.
4. The solution has no functionality in this area. The solution will deliver no functional support of this component out of the box, and currently there are no plans to deliver this functionality through customization or third-party integration.

The buyer's guide evaluates the vendor solutions across four categories, representing 95 criteria in total. The chosen criteria reflect features and functionality that organizations should consider when evaluating ERP-distribution solutions.

Rating Component Definitions

The buyer's guide evaluates the vendor solutions across four categories, representing 95 criteria in total. The chosen criteria reflect features and functionality that organizations should consider when evaluating ERP-distribution solutions.

Supply Chain Management (SCM)

SCM pertains to managing supplier, manufacturer, wholesaler, retailer, and customer business processes.

Warehouse management systems (WMSs) enable warehouse operators to optimize pick, putaway, and replenishment functions by employing powerful system logic to select the best locations and sequences.

Warehouse management systems (WMSs) enable warehouse operators to optimize pick, putaway, and replenishment functions by employing powerful system logic to select the best locations and sequences.

International trade and logistics software enables trading partners to engage in an electronic dialogue to collaborate in acquiring, transferring, transporting, and settling accounts.

Supplier relationship management (SRM) software enables companies to communicate and collaborate with partners and suppliers regarding products, services, compliance, and logistics.

Procurement enables the requisitioning and purchasing of goods (usually from catalogs) that a company needs to operate.

Distribution Process Management

Distribution process management provides the workflow and process management of the supply chain.

Process management software manages the actual physical handling of goods moving throughout the supply chain.

Inventory management provides record-keeping of warehoused goods, and manages the movement of these goods to, from, and through warehouses.

Purchasing management software manages the purchasing of raw materials needed to produce semi-finished or finished goods, and tracks suppliers' compliance to contract terms.

Sales management automates the data entry process of customer orders and tracks their status.

Retail and Commerce

Retail and commerce software enables the sale of goods and services directly to consumers.

Retail and point-of-sale (POS) software records, tracks, and analyzes data and transactions at retail locations, whether online or brick and mortar.

Web commerce provides the ability to search, shop, compare, and check out online.

Back Office

Back-office systems record, track, and analyze the data necessary to manage and run the organization.

Human resources (HR) manages the personnel-related tasks for corporate managers and individual employees, including personnel management, benefit management, payroll management, employee self-service, and health and safety.

Financials applications manage the financial resources of the organization, including accounting and financial reporting, budgeting, collection of accounts receivables, and risk management.

Business Components

Customer Profile

Is Your Supply Chain a Profit Supporter or a Revenue Drain"

In the twenty-first century, enterprise resource planning (ERP) solutions for the mid-market have evolved and matured to offer a full suite of enterprise capabilities, including customer relationship management (CRM), SRM, financial management, and manufacturing and SCM, as well as advanced features such as business intelligence (BI), analytics, and warehouse management. Couple that with a service-oriented architecture (SOA) that delivers ease of integration and flexibility, and you've got the infrastructure in place to compete in Today's increasingly global market place. Executing at peak performance requires embedding the supply chain process within an effective and efficient enterprise solution.

The supply chain has traditionally been defined as everything from your supplier's supplier to your customer's customer. Today, as a result of globalization, the domestic supply chain has expanded to include an organization's worldwide customers and suppliers. Continued growth, combined with increases in risk and complexity, means scalable and properly equipped enterprise solutions are required to effectively manage the global supply chain. Midsized companies with an enterprise system that leverages an SOA can address these challenges, connecting external parts of the supply chain for collaboration, improving order and warehouse management through better sourcing and logistics, and providing accurate enterprise-wide visibility in real time, all coming together to enable your supply chain to quickly respond to global demands.

Technology provides the foundation for achieving a truly collaborative supply chain. Web services technology not only provides lower cost integration, deployment, speed, stability, and reusability, it also provides the ability to connect and collaborate more effectively within supply chains. Technology-enabled supply chain collaboration is fast becoming a business necessity, especially for companies that are expanding operations globally.

Technology provides the foundation for achieving a truly collaborative supply chain. Web services technology not only provides lower cost integration, deployment, speed, stability, and reusability, it also provides the ability to connect and collaborate more effectively within supply chains. Technology-enabled supply chain collaboration is fast becoming a business necessity, especially for companies that are expanding operations globally.

Most midsized businesses today are a part of supply chains that require them to manage orders electronically and participate in collaborative online planning and communication. But all too often these businesses are hindered by legacy systems that simply don't allow the appropriate level of supply-chain integration. They are increasingly finding that to compete effectively, they need to look and act like much larger enterprises.

While midsized organizations require a highly functional solution, they are typically more resource-constrained than larger companies, with fewer resources, limited budgets, and a need for shorter, more realistic deployment schedules. Mid-market companies require solutions that are robust from a functional standpoint, yet provide an overall low total cost of ownership (TCO).

The supply chain can be a profit supporter or a revenue drain, depending on how it is leveraged and managed. Today's global manufacturers and distributors demand solutions that enable them to run efficient supply chains and meet businesses challenges head on.

Rodney Winger has more than 20 years of marketing, consulting, sales and application development experience in the wholesale distribution industry. Currently, he is Senior Director of Product Marketing for Epicor Manufacturing and Supply Chain Management solutions.

This Thought Leadership article on Supply Chain Management Software is brought to you by:

1-800-997-7528 -info@epicor.com -www.epicor.com

Rugs Direct Improves Its Order Fulfillment Process with Epicor

Situation

As a leading supplier of rugs from around the world, Rugs Direct offers a selection, style and value that are unmatched. A multi-channel retailer, Rugs Direct offers a collection of more than 60,000 rugs from synthetic to hand-made, Oriental to Persian, contemporary to traditional, through its e-commerce site www.rugsdirect.com , two brick and mortar stores and a mail order business. Since its founding in 1999, the company experienced tremendous growth and realized its current financial system would not support recent or future growth.

Business Issue

"We were doubling, sometimes quadrupling our business every year. The technology system we had became obsolete, and our staff was not able to utilize it to get their jobs done effectively," said Randy Kremer, president of Rugs Direct. "We needed to find a solution that was robust enough to meet our needs, but we were also looking for a technology partner that we could develop and grow with in the future." Rugs Direct evaluated solutions from Microsoft Business Solutions (Great Plains), Best Software (ACCPAC and MAS 200), Icode, and Epicor, ultimately selecting Epicor for Distribution.

Solution

"We selected Epicor for three key reasons: first because its Microsoft SQL Server platform would provide us the flexibility we required; second it was affordable in comparison to the other solutions we evaluated; and finally for Epicor's willingness to partner with us to create the customizations that best fit our business needs," said Kremer.

For Rugs Direct, the ability to make customizations was essential since its multi-channel operations require integration with several line-of-business solutions. The company already had a robust e-commerce system that needed to interface with Epicor, and integration was also required with the company's homegrown systems for its call center and a point-of-sale (POS) system used in the retail stores.

Key Benefits

Since the initial implementation, Rugs Direct has found further ways to leverage the flexibility of Epicor for Distribution, which serves as the hub for all transactional and financial information. The company worked with UPS Business Solutions to implement a solution that allows order data from Epicor to be put in the format needed to advance the order cycle. "We've taken the inventory picking functionality in Epicor for Distribution and created our own triggers to push select data into the UPS system which enables us to print shipping labels over the Web," said Greg Culler, CIO for Rugs Direct. "This integration also enables us to get the shipping and tracking information back into Epicor for order resolution."

The integration is critical to Rugs Direct, which processes about 80 percent of its orders as dropshipments. "Working with just-in-time inventory, we have critical business needs in terms of order tracking," said Kremer. "The integration between UPS and Epicor gives us real-time visibility into our shipments as they leave our various suppliers." Rugs Direct has also created an interface between Epicor and VeriSign, which it uses for its online payment processing, and is working with Epicor partner eBridge to implementelectronic data interchange (EDI) capabilities.

Today, Epicor for Distribution is used at every level and in every function of Rugs Direct. The solution's company-wide footprint has created efficiencies in many areas, including dramatically elevating the company's order processing capabilities. "Previously, we were lucky if we could ship 70 packages a day because of all the manual processes," said David Craig, CEO for Rugs Direct. "With Epicor for Distribution and the integration to the UPS solution, we've had days where we've shipped over 300."

Rugs Direct has also seen a reduced burden on its customer service center by developing a frontend customer service and POS interface to provide staff with access to all mission critical information from one screen. "With Epicor for Distribution, we are able to provide a high level of order detail and tracking which has significantly reduced the number of calls from customers and suppliers on order status," said Kremer. "This translates to a significant cost savings as well as contributing to our overall efficiency."

According to Kremer, the increased efficiency enabled by the functionality in Epicor for Distribution as well as the integration capabilities is a great asset. "In our competitive industry, it's essential that we operate efficiently with minimal overhead in order to generate profitability and that is where Epicor for Distribution is really helping - to drive profitability and enable us to expand our market," said Kremer.

Further benefits are seen from the ability to manage Rugs Direct's multiple line-of-business systems in house, enabling the company to have almost instant access to data and providing a competitive advantage. "The Epicor solution has enabled my department to create a level of efficiency within our own systems that I don't believe our competitors are able to do," said Culler.

Rugs Direct continues to strategize on how to leverage the technology solution to create further efficiencies. "Implementing a solution like Epicor for Distribution with a flexible platform that allows us to make key integrations as needed is a major benefit," said Craig. "As far as the potential for the operational efficiencies enabled through Epicor, we haven't even scratched the surface yet."

"In our competitive industry, it's essential that we operate efficiently with minimal overhead in order to generate profitability and that is where Epicor for Distribution is really helping "to drive profitability and enable us to expand our market."
Randy Kremer, President, Rugs Direct

Rugs Direct
116 Featherbed Lane
Winchester, VA 22601
540-545-7780
www.rugs-direct.com
Number of Employees: 53
Solution: Epicor for Distribution
Revenue: Private Company

Aloha Integration & Productivity, Goodbye Downtime & Customization

Situation

From humble beginnings as a book wholesaler, The Islander Group is now the largest supplier of Hawaiian books, music, videos and souvenirs. As well as schools, libraries and tourist destinations, the company supplies Kmart, Wal-Mart and Costco with its extensive range of products.

Ninety-five per cent of The Islander Group's sales are within the state of Hawaii, generating over $18 million annually through its website, mail-order catalogue and 50,000 square foot "pick and pack" warehouse operations.

Products are printed and manufactured in Hawaii, the US mainland as well as Taiwan, China, Korea and the Philippines before being distributed from the company's main warehouse located on Oahu to Hawaii's other islands.

Business Issue

Since day one, the company has relied on technology to drive its business. Seamless communication across the manufacture, supply and distribution of its products is crucial to maintaining productivity and profitability, says President Jeff Swartz.

"We have more than 100 employees who manage the import, sales and distribution of up to 5,500 unique products at any one time. From the warehouse floor up we require an integrated system that can seamlessly manage all facets of our business with zero impact on productivity," says Swartz.

In 2005, this was not the case. According to Swartz, the company had outgrown its incumbent system, which had been so heavily modified to suit the changing needs of the business, and it was no longer reliable or upgradable.

"Our old system consisted of a separate accounting and warehouse package which we had to modify so they would communicate with each other. In 2005 we reached a point where the software could no longer cope with our business requirements, forcing us to seek out a new technology solution," says Swartz.

Solution

Before the selection process could begin, criteria were set by each department with a clear focus on their specific needs. Usability and ease of implementation were two of the company's top priorities. Swartz was adamant that the new system had to offer an integrated solution. "The new system had to be strong across a multitude of areas including accounting, logistics, purchasing and warehousing. We also needed a solution that would result in minimum downtime during implementation and incorporate our existing technologies," he says.

Following a year-long consultation with enterprise technology solutions provider and Pronto Software reseller The Velocity Group, The Islander Group selected Pronto Software's ERP system - PRONTOXi - with financial, distribution and advanced warehousing capabilities.

"Our decision was not taken lightly. It affected everyone and it was a very involved decision. Ultimately, we saw Pronto as an extremely powerful system, which we could step right into without any customisation or modification," says Swartz.

At the point of purchase in March 2005, The Islander Group stipulated that the system needed to go live before the fourth-quarter of the company's financial year. Pronto rose to the challenge and PRONTO-Xi was fully implemented with minimal customization in August that year.

At the point of purchase in March 2005, The Islander Group stipulated that the system needed to go live before the fourth-quarter of the company's financial year. Pronto rose to the challenge and PRONTO-Xi was fully implemented with minimal customization in August that year.

"You always think your business is different but Pronto worked for us right out of the box," he adds.

"From the warehouse floor up we require an integrated system that can seamlessly manage all facets of our business with zero impact on productivity."
Jeff Swartz, President, The Islander Group, Inc.

Key Benefits

Increase in productivity. The Islander Group has been using PRONTO-Xi for two years. Up to 50 users can be logged into the system at any one time. According to Swartz, the reliability of the system has seen productivity increase by 20 per cent.
"Our productivity has improved significantly since the Pronto system was installed. Downtime has been minimal, which has brought great benefits to our sales and distribution divisions, who in the past had suffered under a system which was not as robust," he says.

Plug and play. Out-of-the-box features such as 4GL report generation have transformed the business. This, combined with features such as automatic replenishment, has revolutionised warehouse operations - increasing throughput with reduced pick and pack error rates.
"Using 4GL I can generate comprehensive reports, drill down quickly and have real-time information at my fingertips. This allows us to create orders on the fly and ensures purchasing can always make informed and accurate decisions," Swartz says.

"The system is easy to use and has the sophistication we need when dealing with major customers such as Wal-Mart and Kmart," he adds.

Long-term relationship. Swartz is now looking to partner with the Velocity Group again in stage two of their warehouse development. The Islander Group is evaluating PRONTO-Xi ScanPack, which increases efficiency in the picking, packing and despatch of goods. The aim is to further enhance productivity, while reducing their stock footprint by combining ScanPack with a new horizontal carousel warehousing system.

"There is not a person in the company who does not prefer Pronto or who would willingly go back to our old system. We have a fully-integrated system that allows us to keep track of our product from the delivery door to the customer," he adds.
"PRONTO-Xi is the engine behind our business and we are looking forward to reaping the benefits our continuing relationship with Pronto brings," Swartz says.

The Islander Group, Inc.
269 Palii Street
Mililani, HI 96789
808-676-0116
www.booklineshawaii.com
Number of Employees:110 Solution: PRONTO-Xi
Revenue: $18 - $22 million

Sage ERP X3 Helps Aceto Corporation Manage Complicated Compliance Regulations with Confidence

Situation

Publicly-traded Aceto Corporation is a global leader in the importing and distribution of over 1,000 chemically-derived pharmaceuticals, biopharmaceuticals, specialty chemicals and agrochemicals used principally as raw materials in the pharmaceutical, agricultural, color, surface coating/ink and general chemical consuming industries. The company's business is organized along product lines into three segments - Health Sciences, Chemicals & Colorants and Crop Protection.

Business Issue

Aceto had been operating on a legacy system that was antiquated and lacked integration. Already subject to a myriad of U.S. government regulations, including MSDS requirements for the handling of hazardous materials and intense scrutiny by the FDA, the company faced new demands stemming from the Bioterrorism Act and the Customs Trade-Partnership Against Terrorism (CT-PAT) program as well as the enactment of the Sarbanes-Oxley Act.

Many of the compliance activities were handled by manual processes with various spreadsheets, leading to insufficient controls with limited real time reporting. The company recognized the need to implement a new back office system, but the increasing demands placed on publicly-traded companies absorbed available corporate resources.

Solution

Aceto enlisted the help of Innovative IT Consulting to define their needs and assess ERP vendor options. Innovative IT reviewed Aceto's business processes and requirements and helped the management team secure approval for the large project. Aceto preferred that their new solution provider be experienced in implementing ERP software systems in the chemicals industry. After reviewing presentations from six companies, Aceto narrowed the list to Adonix and competitor JD Edwards. In July 2004, the company selected the Sage ERP X3 Process ERP suite believing it was the best fit for the size, scope and complexity of the project.

"Our goal was to implement a system that would provide broader, deeper and more efficient processing capabilities without sacrificing business-critical functionality," said Terry Steinberg, Vice President & CIO of Aceto. "Sage ERP X3 offered the best combination of functionality, technology, value and implementation methodology of the systems we evaluated. And, it had the flexibility and scalability we needed to support our expansion and evolving business model." Aceto also recognized that the functionality offered by Sage ERP X3 was the best value for the price. Sage ERP Process provides a complete array of industry-specific functionality required by chemical companies including the management of formulas, certificates of analysis, potency, by-products, multiple packaging units per product, shelf-life, lot control and traceability, specific gravity and weight calculations.

With the help of Innovative IT, Aceto assembled a team of key personnel who would be instrumental in executing the implementation. While each of the three business units shared similar business processes, each one also had certain unique processes. While this created many challenges in the implementation, Aceto viewed it as an opportunity to standardize and improve processes across all business lines.

Sage ERP X3 offered the flexibility required to support Aceto's unique processes and was able to adapt to meet the company's specific needs. For example, when importing hazardous chemicals from overseas, companies are subject to country specific regulations in addition to international business practices. The Adonix services team customized Sage ERP X3's existing quality module to ensure that products go through a series of internal controls for the necessary documentation required to meet country-specific regulatory demands.

Additionally, Aceto was interested in a software add-on that provides an effective way to track its product in transit, which can be on a vessel for up to six weeks. This module, developed by Adonix for the U.S. market, in effect, takes financial ownership of the product upon shipment and manages detailed tracking of the landed cost, including broker fees, terminal handling fees, ocean freight, inland freight, duty, etc. It collects additional detailed product information, such as a Certificate of Analysis, which is entered while the goods are in transit, instead of when they arrive at the warehouse. Inventory can be pre-allocated to sales orders from purchase orders, again before the goods arrive at the warehouse.

Once the enhancements were complete, extensive pilot exercises enabled users to become comfortable with the system and eliminate potential slowdowns in ongoing workloads.

"Sage ERP X3 offered the best combination of functionality, technology, value and implementation methodology of the systems we evaluated. And, it had the flexibility and scalability we needed to support our expansion and evolving business model."
Terry Steinberg, Vice President & CIO,Aceto Corporation

Key Benefits

With Sage ERP X3, Aceto's business processes are streamlined and automated. The company is finding it easier to comply with the financial reporting responsibilities placed on publicly-traded companies. According to Steinberg, "We're completing our financial statements and Sarbanes-Oxley compliance more quickly, and it's a smoother process."

Other customizations are enabling Aceto to better manage its inventory, track foreign exchange costs and control credit and order approvals, and Aceto is managing its complicated compliance processes with confidence.
"We are very happy with Sage ERP X3," said Steinberg. "We made the right choice."

Aceto Corporation
One Hollow Lane
Lake Success, NY 11042
516-627-6000
www.aceto.com
Number of Employees: 210
Solution: Sage ERP X3
Revenue: $313.5 million

Infor Helps IBT Reduce Inventory 30% Through Collaboration

Situation

IBT, Inc., a distributor of industrial supplies, offers high-quality products such as bearings and power transmission products, rubber and plastic hoses and belting products, electrical supplies, and material-handling equipment. The company also provides maintenance, engineering, and media production services. Headquartered in Merriam, Kansas, IBT has about 50 service centers in 10 states that are concentrated in the Midwest. Its customers extend throughout the aerospace, aggregate, and ethanol industries, representing manufacturers such as ABB, Goodyear, RBC Bearings, and Baldor.

Business Issue

As a key component of its ongoing strategy to optimize inventory, strengthen relationships, and increase sales volume, IBT, Inc. decided that it needed to implement steps to get products to customers more quickly and efficiently. With about 26,000 orders handled per month and about 80,000 SKUs in 46 locations, streamlining the process appeared to be a monumental task. Darrell Hensley, corporate operations manager, explains, "Our goal was to reduce our $24 million-dollar on-hand inventory by 30 percent. To accomplish that, we needed to take advantage of our suppliers' inventories more efficiently. We also wanted to reduce our order processing expenses by relying more on suppliers, and to increase customer service productivity."

As a distributor, IBT began investigating the possible approaches and benefits of supply chain collaboration, including how it helps companies anticipate future demand and prepare for it, and how it improves overall operational efficiencies.

Solution

IBT chose the Infor' ERP distribution solution for its technology that would enable efficient collaboration and for its business experience with supply chain networks. Notes Hensley, "The first thing we did when trying to figure out how to better collaborate with our customers was to call Infor. We knew how Infor approached our distribution industry challenges, and it was apparent they were concerned about understanding our needs. In addition to targeting efficiency improvements, we also learned that we needed to add more value for our customers and suppliers, and take advantage of technology to link all of our processes in an optimized collaboration effort. We wanted to grow efficiently without increasing costs."

An important step toward improving IBT's efficiencies was expanding visibility across the organization and throughout the supply chain. IBT began by examining how the company makes decisions about when to order inventory, how it supports demand, how it forecasts future demand, where to source from, and where the need lies. Hensley explains, "Infor helped us create a business model that extended our visibility throughout the supply chain and helped us optimize control over our business processes from order entry, accounts receivable, and sales analysis to inventory control and purchasing."

Key Benefits

IBT began its electronic supply chain collaboration by partnering with its biggest suppliers. The objective was to add all of these suppliers' products to IBT's item base offerings. In doing so, the company also made sure that its operations and procurement departments were synchronized with the project so that product numbers and descriptions were used consistently. Hensley notes, "With the added value of increased sales opportunities and offerings to suppliers, we knew we could ask for incentives from them, such as no minimum orders, rebates, and reduction in freight costs."

According to Hensley, suppliers are lining up to take advantage of the collaboration program, and IBT has completed adding the full line of its larger suppliers' products to its item base offerings. The system setup enables real-time price and availability of supplier product offerings by simply pressing a function key. "Customer service representatives can also issue the purchase order in real time in the supplier's system while on the phone with the customer," notes Hensley, "eliminating callbacks, faxing, and emailing." Hensley adds that this streamlined process saves IBT a tremendous amount of purchase order processing time and improves customer service productivity. "The collaborative partnership boosts top-line sales volume and reach for both IBT and suppliers' without increasing cost. We can now reach customers with a depth and geographic breadth that we had not been able to do alone."

One of IBT's largest suppliers is Martin Sprocket. Before collaborating electronically with Martin, IBT had only 8,000 Martin part numbers in its item base with price and availability information. The current collaboration partnership with Martin has enabled IBT to extend inventories to over 21,000 total part numbers, using universal product codes, comprising Martin's complete product offering. "We now can check price and availability on all Martin parts by just pressing one function key while we have the customer on the phone," Hensley adds.

According to Hensley, the implementation of the Infor solution at IBT took three weeks and about 40 hours of IT time. "We explained our whole concept to Infor, and we talked to our biggest suppliers, who showed interest because of their desire to increase sales. But we could not have accomplished what we did and do it so quickly without Infor's guidance."

"Infor helped us create a business model that extended our visibility throughout the supply chain and helped us optimize control over our [key] business processes."
Darrell Hensley, Corporate Operations Manager, IBT, Inc.

IBT, Inc.
9400 West 55th Street
Merriam, KS 66203
1-800-332-2114
www.ibtinc.com
Number of Employees: 450
Solution: Industrial Supplies
Revenue: $120 million

SYSPRO Driving 20% Shipment Growth at NewBasis

Situation

NewBasis, headquartered in Riverside, Calif., manufactures and distributes top quality, highly durable plastic, fiberglass and polymer concrete enclosures for use in a wide variety of industries, including telecommunications, power/electric, public works, water/landscaping and construction. A pioneer in developing the first pre-cast concrete manholes and reusable steel forms, the company later moved into the emerging plastic, fiberglass and polymer concrete enclosure market. NewBasis has numerous patents for infrastructure design breakthroughs during its 60-year history.

"NewBasis gives its customers a choice of several product lines in different materials," said Christopher Larkins, president, NewBasis. "Our goal is to continually offer better value and utility, while we move into new markets and expand our reach."

As a pragmatic, but visionary company experiencing double-digit growth, Larkins said NewBasis selected SYSPRO to provide it with a proven software solution renowned for its integrated modularity and easeof- use features.

Business Issue

NewBasis' biggest customers today are telephone and cable TV companies, though the line between the two types of companies is becoming increasingly blurred. NewBasis offers six different product lines; however, since each product line is available in numerous sizes, the company actually maintains about six thousand different parts, each with its own part number. In October 2006, for example, NewBasis shipped several thousand individual items.

While most manufacturing is done from its California headquarters, NewBasis contracts jobs to other locations in the U.S. and overseas. Still additional facilities perform final assemblies, then ship goods directly to the end customer or to select warehouses throughout the country. This exacting multi-site coordination involving both the manufacturing and distributing of products is a growing trend that has blurred the line between production and shipping.

Solution

NewBasis had been using Epicor software, and had limited access to critical customer and product information, as well as regional and worldwide sales demographics. The company reviewed several options, including the large industry leaders, selected SYSPRO and was implemented in just over two months from the time of purchase. Today, the solution accommodates up to 50 simultaneous users.

The SYSPRO STARS (Structured Technique to Achieve a Rapid Solution) Implementation Methodology was utilized to guide the implementation procedure and provide a best practices framework for energizing and maximizing operational efficiency.

"We are a growing visionary company, so we needed to incorporate new procedures to accommodate our emerging needs in inventory tracking, engineering control, costing and emerging distribution needs," Larkins said. "We picked the best of both worlds' streamlined processes, yet customizations to SYSPRO that tailored it to our favored views and internal practices."

Key Benefits

Immediately following implementation, Larkins said the company was able to rein in costs and get distributed, role-based data access. "We have a much better handle on the true costs of our product, including factors like raw materials and customized manufacturing," Larkins said. "Plus, by gaining better visibility on production scheduling and work in process, we have greatly improved our customer expectations and raised customer satisfaction."

With several different warehouse bin locations, the company uses SYSPRO for tracking inventory by product and by warehouse, enabling management to gain an instantaneous picture of the inventory status at each location to plan production and shipments.
"We have had record-breaking growth in our monthly shipments, as much as +20 percent improvements per month," Larkins said. "While there are a number of factors contributing to this, we would not have approached these levels had we not selected SYSPRO."

"By gaining better visibility on production scheduling and work in process, we have greatly improved our customer expectations and raised customer satisfaction."
Christopher Larkins, President, NewBasis

About SYSPRO:

Since its inception in 1978, SYSPRO has been delivering state-of-the-art business solutions to some of the world's leading companies. As a global leader in the production of world-class ERP software, the company now caters to the specialized needs of 12,000 licensed companies in more than 60 countries worldwide. SYSPRO is marketed globally through regional territory distribution centers and a global reseller network in the US, Canada, Africa, Asia Pacific, Australia and the UK.
SYSPRO's more thoughtful approach to adopting new technology, such as web services and SOA platforms, reflects the cautionary desires of its buyers, who are driven by business needs, and not by the latest headlines. SYSPRO calls its buyer landscape "PragmaVision" - pragmatic, but visionary ERP executives that are driven by a desire for smart, but aggressive market growth.

Newbasis
2626 Kansas Ave
Riverside, CA 92507-2600
951-787-0600
www.newbasis.com
Number of Employees: 90
Solution: SYSPRO ERP
Revenue: $30 million

Oldcastle Signs a Multi-Suite Contract with Lawson Software

Company Background

Oldcastle Inc. is the North American division of CRH plc and is the largest manufacturer and distributor of building products in North America. Oldcastle operations include more than 1,700 locations in 50 states and four Canadian provinces and more than 50,000 employees. The Lawson implementation is for the company's Architectural Products Group (APG), which will roll out the system to 2,200 users in 230 locations across the United States and Canada.

Business Issue

Oldcastle APG previously relied on disparate legacy systems that lacked the integration necessary to support its six separate product segments. Employees were spending unnecessary administrative time transferring data across its business units, which meant executives and managers could not easily access the critical information they needed. The systems also did not have the necessary scalability or sales functionality to accommodate APG's growth plans and evolving business needs.

"As we continue to grow and expand our business, we need integrated applications that can both facilitate and adapt with that growth," said Frank Murtagh, chief information officer, Oldcastle APG. "The Lawson applications are designed to improve the efficiency and accuracy of our business processes, which will help us make better-informed decisions for our company."

Solution

APG selected the Lawson M3 solution based on the following criteria:

• It offered functionally-rich, integrated software modules that met all of APG's requirements.
• It required very few modifications "out of the box" and had a proven track record at other manufacturing and distribution businesses.
• Its scalability will help APG support projected growth in both transaction volume and number of users.
• It is written in Java and runs on a proven technology platform, which is System i with the DB2 database.
• It offered a lower total cost of ownership to implement and run than competing products.
• It offered greater ease of use for APG end-users.

Once implemented, the industry-specific Lawson system will offer a single user interface for APG's employees to access and share financial and supply chain information, allowing for increased visibility into its many product lines. The system is also designed to function directly with APG's manufacturing operations, giving managers the ability to more accurately track sales and production statistics and make decisions in a more timely manner. In addition, the new Lawson system will provide enhanced procurement and fulfillment applications, helping to enhance the organization's ability to use its resources and inventories. APG's supply chain will also be linked more directly with its business processes, helping management plan and improve materials flow through the business.

APG also will use the Lawson system to help automate key elements of its sales processes. By helping to streamline processes for providing quotes and creating orders, the company will be able to better use its internal and external sales channels and provide better customer service.

After a successful pilot at an APG location, the company plans to roll out the solution to all APG sites.
"Companies need to be able to react and adapt to the needs of their customers and suppliers as they appear throughout the manufacturing and distribution process," said Peter Quinn, vice president of marketing operations for Lawson. "The Lawson applications give our customers the ability to see their product from beginning to end and adjust to changes up and down the supply chain."

"As we continue to grow and expand our business, we need integrated applications that can both facilitate and adapt with that growth."
Frank Murtagh, CIO, Oldcastle APG

Oldcastle Inc
375 Northridge Rd., Ste 250
Atlanta, GA 30350
770-804-3363
www.oldcastle.com
Number of Employees:
26,000
Solution: Lawson M3
Revenue: $3.5 Billion

Inventory Management and Accounting Conundrum

from the article "Let the (Excess) Inventory Flow!" by P.J. Jakovljevic, Technology Evaluation Centers

The challenges of inventory management and the notion of inventory as a "necessary evil" (or the "asset versus liability" dilemma) have long been haunting operations and financial and accounting managers. It is a well-known fact that managing inventory risk is about managing the cost of maintaining unnecessarily high levels of inventory against the risk of running out of stock at a crucial moment of truth when a customer actually wants something. In a variety of aspects, inventory management is at the heart of the supply chain management (SCM) realm. Supply chain organizations are responsible for all the processes from sales and operations planning to customer fulfillment, inventory optimization, and new product delivery and introduction'all of which involve the planning and movement of inventory. Profit margins are also directly proportional to operational excellence in each of the above processes. While cherished by material management folks as supply chain "grease," inventory is not that beloved by financial managers.

The motto "time is money" certainly holds true when it comes to inventory valuation. Well, maybe in a reverse (negative) manner, because typically neglected in the continuous battle for executives' focus and priority is the management of at-risk, aging inventory'be it excess active, obsolete, returns, or refurbished inventory. Some refer to these items as "slobs," which stands for "slow moving and obsolete" ones. In other words, most companies in the sectors of high-tech, consumer electronics, retail, and consumer packaged goods (CPG) are focused on new product introductions. Given that everybody is most excited in the early stages of product life cycles (that is, devising and delivering the brand new, "coolest" products), much less attention is paid to the languishing, "totally so not cool" older product lines, with millions of accompanying inventory asset recovery dollars slipping away annually as a consequence.

Excess inventory, which ties up working capital and whose value is declining by the day, does not necessarily come from new product introductions only. Nowadays the manufacture of most goods is largely carried out in the Far East, which comes with a nominal item price advantage, but also with many potential downsides. In addition to the inevitable quality, communication, and cultural issues, manufacturing product in such lower cost, remote locations means a sizeable lead time increase, as the goods will need to be transported from the Far East back to the company's warehouse. This in turn means that a planner will have to forecast the demand before placing an order with a remote supplier far away.

In the high-tech and electronics world today, it is a common industry fact that forecast accuracy is at about 80 percent. This means that often 20 percent of everything that is manufactured is deemed to be "at risk" immediately and may never sell. In other words, potentially 80 percent of a company's inventory is active product that is currently selling. The remaining 20 percent is either slow-moving or will never sell simply because of the inevitably inaccurate forecast.

Also, excess inventory scenarios often exist within worldwide services and warranty repair organizations. This can mean one of two things: One can have excess spares inventory that another service organization within the company or the distributor channel needs, but hardly anyone has any way of knowing about it; or there is excess stock of the product throughout the company and one must go to the open market to dispose of it. Other sources of excess inventory come from safety stocks, inventory buildups for seasonal and promotional items, bigger order sizes due to volume-based discounts, consignment inventories, returned goods, and so on.

To rub salt into the wound, excess active inventory is arguably the most difficult life cycle category to get rid of. If it is still on the original equipment manufacturing company's price list, it is often contractually priceprotected, and creating channel conflict by selling off discounted inventory to competing wholesalers is categorically not an option. In addition to the price protection that precludes the use of any form of broker liquidation, potential channel conflict restricts wholesale and retail options.

Companies may sometimes resort to ineffective, high-overhead marketing promotions to move this inventory, but more often than not, significant quantities remain in the warehouse until eventually the product is rendered obsolete. Then it is eventually liquidated for several pennies on the dollar. While such marketing programs as promotions and rebates may move some excess inventory, profitability analysis reflects not only the margin impact of discounting, but the significant overhead costs of program management to develop, launch, and manage each distinct program as well. Hidden are the costs of claims matching, invoice reconciliation, credit resolution, and write-offs. Creating hefty financial reserves against product obsolescence, writing off the inventory, and ultimately recovering only a small fraction of the original value is the inevitable result of most companies' inventory asset management processes. Their focus, naturally, is on new product introduction.

Consequently, distributors must find smarter, more cost-efficient inventory and accounting systems if they want to improve inventory management and increase inventory asset recovery dollars.

Predrag (PJ) Jakovljevic is TEC's principal analyst, with a focus on the enterprise applications market. He has nearly 20 years of industrial experience within the discrete manufacturing sector, including the machinery and equipment, automotive, construction and engineering, and electronics industries.

Cartridge World Is the World's Fastest Growing Ink Refilling Retailer

Situation

Cartridge World is the world's fastest growing ink refilling retailer in the $80 billion printer cartridge industry. The company refills empty ink cartridges for inkjet printers, laser printers, fax machines, and photocopiers with top quality, brand-specific ink and toners; at the same time offers consumers and businesses up to a 50 percent savings, a money-back service guarantee and helps the environment by keeping cartridges out of landfills. Voted #1 in the category of toner replacement services by Entrepreneur Magazine Franchisee 500, Cartridge World has more than 1,300 franchised retail locations in 36 countries. Cartridge World North America was founded in 2003. There are currently more than 470 locations open in the United States, with 800 locations expected by the end of 2007.

Business Issue

Cartridge World, which refills empty ink cartridges and remanufactures empty toner cartridges for inkjet printers, laser printers, fax machines, and photocopiers with top quality, brand-specific ink and toners, has more than 500 locations open in the United States, with 800 locations expected soon. Before NetSuite, Cartridge World used QuickBooks for accounting, and managed sales to franchise locations through an un-integrated third-party product. This coupled with a further un-integrated Web store and manual processes in fulfillment were creating costly data entry errors. Internal and external databases with no clear links between them were rampant. The situation was unsustainable for a fast-growing global company trying to stay ahead of business challenges.

The initial inventory deployment was done to avert the keyboard-heavy processes in order fulfillment, which were a constant source of annoyance and costly errors. But the company came to understand that it had other problems that had no clear solution with in-house, on-premise technology, such as the need for business continuity across the widely dispersed organization. "Being global, we have to operate 24 hours a day, and keep communicating information as different roles grow and encompass more tasks," Peterson says.

Solution

Cartridge World integrated NetSuite into its worldwide operations to oversee the hundreds of franchise locations and provide real-time information and key metrics for the global organization. When NetSuite was originally installed it was used primarily as an inventory control tool, without leveraging its integrated accounting and customer tracking capabilities. "Andrew and I both had experience with NetSuite in the past, so although neither of us were involved in the decision to bring NetSuite into Cartridge World, both of us understood the power of the tools within the program and decided to re-launch NetSuite internally," Yeffa says. "We wanted to expand the reach of NetSuite into the full workflow process to all of the operations of our business, not just financial records and inventory."

NetSuite has given the organization a chance to stay on top of its rapidly growing business opportunities, without a major up-front capital commitment or expensive re-engineering fees every time a new region or store comes online. To that end, Cartridge World has rolled up its disparate databases into the internal NetSuite B2B ecommerce system and now operates replenishment for franchise locations through the integrated Web store. The Australian operations have converted to NetSuite for region control, with Europe slated to go live on NetSuite as well.

Next up for Cartridge World is to fully integrate its in-store point-of-sale systems with NetSuite, reducing the need for franchisees to place manual replenishment orders.

Key Benefits

After almost 20 years in the business, Cartridge World began growing at an even faster pace in the early part of the century, and consequently chose NetSuite for its integrated ERP, CRM and ecommerce. The business-to-business (B2B) ecommerce capabilities of NetSuite enable the company's network of more than 500 North American franchise stores to quickly purchase products from Cartridge World via a NetSuite Web store. "NetSuite has become our conduit to our franchisees," says Andrew Peterson, Cartridge World Director of Finance and Accounting. Cartridge World corporate uses NetSuite extensively to market and communicate with the widespread franchisees as well as to track support issues they have their questions on everything from invoices to how to refill cartridges.

"The first thing I noticed was the global visibility " NetSuite is certainly enabling the senior management team to have a consistent view of everything going on in our worldwide network," says Steven L. Yeffa, CFO. "It allows us to think, act, and work as a single company worldwide." In the process, the company has cut an estimated $200,000 in annual IT and administrative costs out of its requirements to run an accurate, sustainable business. And NetSuite has supported Cartridge world's 200 percent collective increase in sales to its 500+ storefronts in the U.S. and more than 1,400 worldwide in 28 countries. Much of that is thanks to NetSuite's B2B ecommerce capabilities.

"The most important thing is that NetSuite has made it more seamless for the franchisee to come on board, all without a significant amount of customization on NetSuite," Yeffa says. "That allows us to provide better information and more customer service than anyone else in our industry. We offer a complete package and NetSuite is our backbone to offering that package."

"The most important thing is that NetSuite has made it more seamless for the franchisee to come on board."
Steven L. Yeffa, CFO, Cartridge World

Cartridge World
6460 Hollis St
Emeryville, CA 94608-1028
www.cartridgeworld.com
Number of Employees: 50
Solution: NetSuite
Revenue: $57 Million

Southwest Windpower's Success Is No Longer a Guessing Game

Situation

Southwest Windpower sells wind turbines to everyone from private home and boat owners to oil rig operators in the North Sea and Antarctic research facilities. But the company's strong success was no longer supported by its chosen technology platform, and with demand increasing, the potential to make costly mistakes was rising as well.

Business Issue

"What we had available with our old system couldn't by any means handle the vision we had for the company in the future," says Todd Sieber, Southwest Windpower traffic manager. "We had to have the ability to communicate with one another wherever we were, and have visibility with what was happening with our product and transactions as well."

When Southwest Windpower's incumbent technology providers prepared an estimate to meet the company's demand for greater flexibility and accessibility, the solution proved cost-prohibitive.

Solution

"We saw potential in where NetSuite was going, and a lack of potential in the other things we looked at," says Gil Sanchez, IT director at Southwest Windpower. So the company converted its business to NetSuite and has enjoyed immediate results. Southwest Windpower uses NetSuite for accounting, purchasing, inventory management, and sales, with increasing use of forecasting and marketing expected in the near future. The company will also soon turn NetSuite into its front end for its global service program, which it hopes will avoid hundreds of telephone calls per year.

Less than one year on NetSuite, the company has already expanded its use of the system. "We have started to look into on-line sales and inventory management with our authorized service dealers, and being able to process credit cards from NetSuite has simplified our cash payments segment of the business," Casebeer says.

With NetSuite onboard, Southwest Windpower's success is no longer a guessing game, giving top management the insight it needs to guide the company's strategic direction. "With NetSuite, once the status of a sales transaction changes from pending to shipped, it becomes visible on the accounts receivable dashboard, and management can view sales for that day or even that hour," Sieber says.

Key Benefits

Southwest Windpower converted its clean-energy business to NetSuite and saw immediate gains in business efficiency and confidence. "With our batch-processing legacy software, there was no way for one department to know what their neighbor department was working on without sending a representative over, or sending e-mail, and information was getting lost between departments," says Susan Casebeer, Southwest Windpower CFO. "With NetSuite, we are almost immediately able to see what other departments are doing, and make decisions more readily and efficiently as well. The use of the dashboard to manage processes is a key feature of NetSuite."

The improved visibility has contributed greatly to cutting Southwest Windpower's transaction turnaround time from days to mere minutes. "We can't even put a number of how much it's increased our communication with each other."
Key executives receive sales orders for approval within just minutes, instead of having to wait for daily or weekly operational meetings, and raw material and finished goods tracking has improved substantially as well. "In just three months we were able to lock down our finished goods inventory tighter than it had ever been, cutting down our errors tenfold."

Consolidating its critical front- and back-office applications into an integrated and affordable solution has given Southwest Windpower room to continue its strong growth without fighting its own business technology. "Before, we had problems with batch processing, multiple languages, and multiple platforms. NetSuite is using one program to solve all those problems between programs and vendors," says Casebeer.

"In just three months we were able to lock down our finished goods inventory tighter than it had ever been, cutting down our errors tenfold."
Todd Sieber, Traffic Manager, Southwest Windpower

Southwest Windpower
1801 W Route 66 Ste 100
Flagstaff, AZ 86001-8536
www.skystreamenergy.com
Number of Employees: 80
Solution: NetSuite
Revenue: $5.5 Million

Personalized Gift Provider Relies on Everest Software to Manage Inventory and Support Growth

Situation

Gunther Gifts, an online provider of personalized gifts for special occasions such as weddings, birthdays, graduations, and anniversaries, has become the engraving specialist that customers have come to rely on to help commemorate their events and milestones.
The Carlsbad, California-based company engraves packages and ships unique gifts nationwide from a 15,000 square foot engraving facility housing their state-of-the-art engraving machines and personalization stations.

Business Issue

With over 200,000 customers relying on Gunther Gifts Inc. to help commemorate their special occasions, it was critical for the company to have an integrated solution that could manage its inventory and accounting effectively and efficiently.

In addition, with several Websites that all pull information from the same inventory pool, Gunther Gifts needed a system that would allow it to easily keep track of its inventory across multiple channels. "We maxed out Quickbooks within our first year," said Lisa Gunther, co-owner & CFO, Gunther Gifts. "We needed a system that would allow us to grow quickly, without worrying about whether our internal accounting and inventory system could handle the growth," she added.

Solution

In looking at inventory solutions, the one that stood out was Everest Software's cost-effective, allin- one Everest Advanced. The fully integrated solution includes accounting, inventory control, sales, order entry, purchasing, e-commerce, shipping and receiving, and more, allowing Gunther Gifts to manage and track business operations online and offline, from storefront to the back office, without missing a beat.

With Everest Advanced, Gunther Gifts can also easily keep track of its inventory across its multiple Web storefronts and control the inflow/outflow of products, ensuring that gifts are always available when requested by a customer. "Everest Software has excellent features and support. That gives us peace of mind, and keeps our business running smoothly and our customers happy," Gunther said.

Everest gives Gunther's sales staff real-time visibility into actual inventory "available for sale." Knowing how much inventory is in stock is not enough, Everest provides Gunther with quantity details that have already been adjusted by factors such as what is already promised to other customers, defective units that need to be returned to the vendor, incoming purchase orders and more.

From implementation to daily activities, the company transitioned seamlessly to the Everest system. "It is always difficult to start anything new," said Gunther. "Once we began implementation of the software, it moved along quickly and we received excellent training so we were up and running within a week." With Everest's help, it was an easy next step to train the entire staff to use the system - a process that saved Gunther Gifts thousands of dollars.

In addition, since Everest offers both on-demand and on-premise solutions, the company was able to pick the system that best suited its needs. "We have a high volume of activity, and in the past if you had to log-on to an online billing system, we were at the mercy of the provider's uptime or the DSL uptime in our area which was not reliable," stated Gunther. "By having the flexibility of an on-premise solution, we're able to process all our orders offline quickly and efficiently."

Currently Gunther Gifts sells most gifts via mail order and the Internet. As they continue to expand Everest Software will be there to support this growth 100% of the way. "We know we will not max out Everest or be forced to change to another system. We can now spend more of our time bringing in new business and serving our customers than worrying about our ERP program."

"By having the flexibility of an on-premise solution, we're able to process all our orders offline quickly and efficiently."
Lisa Gunther, Co-owner & CFO, Gunther Gifts

Key Benefits

Everest Software:

• Enabled seamless inventory management between multiple Websites, ensuring product availability and limited unplanned out-of-stock orders and therefore better customer satisfaction
• Saved thousands of dollars through customized training programs which allowed the entire staff to process and check orders ensuring that products ship to customers as quickly as possible
• Supported the rapid growth of the business by enabling complete integration across inventory, accounting, purchasing, sales
• Processed orders quickly and efficiently utilizing on-premise solution and avoiding downtime of online billing systems

Gunther Gifts
2717 Loker Avenue West
Carlsbad, CA 92010
1-877-544-0814
www.gunthergifts.com
Number of Employees: 15
Solution: Everest Advanced
Revenue: Private Company

Distributors: Four Building Blocks to Grow Your Business

Thomas P. Gale, publisher and executive editor of Modern Distribution Management

Gaining competitive advantage in distribution is all about positioning. Successful distributors continually adapt to find new customers, meet emerging needs, and capture share in shifting markets. They clearly differentiate their value proposition to customers and suppliers in the unique mix of products, service, and knowledge they deliver. And they prove their value in the supply chain daily by solving problems, reducing costs, and increasing productivity.

This model has served countless companies for decades; in fact, many distributors wonder why, after all, they should fix something that has been producing double-digit sales growth for the past few years and making stakeholders smile" But distributors are at risk if they aren't building a solid platform for the future and adapting their business model to the growing global market.

Most distributors typically plan around what happened the year before, adding a growth percentage increase based on a number of market indicators. The danger with this methodology is that as industry consolidation continues "at all points in the supply chain"incremental business improvement isn't enough to stay ahead of new competitors. Sustainable growth has to come from a much more strategic approach where distributors use available technology to position themselves to thrive worldwide. But recent industry surveys indicate that only 30-40 percent of distributors currently work from such a formal plan.

1. Improve customer service

As global trade and communication barriers have fallen, the number of alternate supply sources has exploded. Add to that intense cost pressure from low-cost countries, which has tightened margins in many sectors of distribution. In response, many successful distributors now offer a broader array of services to customers who have had to reduce their internal resources due to their own international cost drivers. In doing so, those distributors have increased their own margin points.

There are also ways distributors can cost-effectively deepen their local customer relationships. For example, a Midwest distributor created an online catalog tool that it adapts for each customer based on purchase history and that provides real-time inventory and order status. This self-service product information and ordering tool enables salespeople to spend their time resolving higher level customer matters, routing lower level issues directly to inside sales support, and prospecting new opportunities.

Additionally, mobile technology tools enable salespeople to be more productive and accountable. They can be out in the field, calling on customers, rather than in the office doing reports. And sales management gets better visibility on day-to-day activity so they can strategically guide the time and focus of its sales force.

2. Manage business complexity

Some distribution operations resemble a cross between a fire drill and the movie Groundhog Day. Each day, employees show up at 8 A.M. and start the same process to perform the necessary repetitive tasks that have been built into managing sales and order flows. This can stretch resources enough that nobody can find time to look at ways to automate necessary functions and remove outdated processes.

Another issue may be that the distributor is using a technology solution that can't adapt to or integrate with customer and supplier systems. And as distribution companies grow through acquisition, connecting new branches, corporate cultures, and logistics operations can be difficult at best. The bottom line because they have to juggle many complex business processes by hand, employee productivity is fundamentally compromised.

The right technology can integrate distributor operations across multiple locations and free up employees to address emerging business demands. Information-sharing tools "even commonly implemented technologies such as e-mail" can significantly increase visibility and communication across the company, helping distributors stay ahead of competitors by being faster and more responsive to changing market conditions.

3. Attract high-value employees

The distribution business isn't particularly alluring to 20-somethings. it's a difficult career path for them to understand the promise of, despite the great opportunities and income potential it offers. And as technologies help tighten the supply chain, talent will increasingly be the critical differentiator for distributors. You can bet your competitors are actively recruiting and training the next generation of employees.

How do you make sure the brightest talent will choose your company to grow their careers" Take a look at what a visit to your office headquarters looks like through their eyes. Some key questions to ask include:

• Do prospective employees see a place where they can advance their careers while making a difference in the success of the business"
• Do they see a set of technology tools that allow them to stay connected internally as well as externally "and that indicate a business with an innovative future"
• Do they see a management team that rewards initiative"
• Can they see a team environment versus one where they are simply told what to do"

4. Improve process, productivity and profitability

These "three P's" are perennial. Many distribution functions involve repetitive, low value-adding activities, such as transaction processing, fulfillment, and warehouse and logistics management. Distributors that find ways to free employees from those tasks to focus on high value-adding activities'such as solving customer problems, deepening vendor/customer relationships, and learning new product solutions'see significant increase in profitability. Great distributors work constantly on process improvement in every part of the business. They have key performance indicators (KPIs) in place that they use internally and share with customers to help benchmark their value and differentiate them from competitors.

Take stock of your building blocks

How does your company measure up in each of these four areas? In a world where customers can find a lower price with the click of a mouse on nearly any product, excellent local customer service is a key differentiator. If your employees feel like they are running 100 miles per hour every day just to keep up with the daily pace of sales, that means everyone is too caught up in the complexity of business processes? and you risk burnout and overlooked tasks. You should be doing everything to find and hire engaged and motivated people who can take the business to greater levels, or you could be sacrificing the future potential of the company. And the "three P's" (process, productivity, and profitability) are a hallmark of professionally managed companies in any business sector.

Wherever you are in the life cycle of your company, you have to plan strategically and execute purposefully to reach the next level of success. The common denominator for success is applying the right technologies and processes at the right time - enabling employees to create customer-focused solutions that take the business far beyond the delivery of products in boxes. In increasingly competitive global markets, this will define the most profitable distributors in the next decade.

Tom Gale is publisher and executive editor of Modern Distribution Management, a specialized information service that provides insight and analysis on trends in wholesale distribution channels. Modern Distribution Management's information services include paid print/online newsletters, industry intelligence e-newsletters, a Web site, audio conferences, and book and special reports publishing - all focused on the topic of wholesale distribution.

This Thought Leadership article on Supply Chain Management Software is brought to you by:

1-800-642-7676 - www.microsoft.com/dynamics

New Online Capabilities Boosts Business Potential for United States' Power Tools Distributor

Situation

Tooltechnic Systems, LLC, is the United States' distributor for Festool. Headquartered near Stuttgart, Germany, Festool is the seventh largest power tools manufacturer in the world. When Tooltechnic Systems first brought Festool products to the United States in the late 1990s, it used People's Choice as its ERP system. It soon became clear that the system wasn't supporting the needs of the business.

Business Issue

Lars Fackler, Manager Sales Office West for Tooltechnic Systems, says: "People's Choice couldn't handle multi-currencies or multiple warehouse locations. It wasn't flexible enough to cope with the various discounts we offered for dealers who expected to know what was happening with their invoices and what was happening with their commission cheques. We couldn't adapt People's Choice to our own business model, or modify it to the way we wanted our business to be. We needed a flexible, back-end system that would grow with us in the long term."

Business Issue

As an extensive user of Microsoft technology, Tooltechnic was confident that a Microsoft-based solution would provide support for its business into the future. It quickly decided that Microsoft? Dynamics? NAV 4.0 was the best business management solution for its business.

Tooltechnic chose to work with Microsoft Gold Certified Partner SCS. It completed the implementation of Microsoft Dynamics NAV 2.6 in 2002, including training and customization of the solution. The system had eight users and was used for all general accounting purposes, sales and receivables, inventory and basic distribution.

Tooltechnic was able to extend its use of the system and move ahead with SCS to upgrade Microsoft Dynamics NAV to version 3.6 in 2003, as the basis for its new website plans. Tooltechnic's existing website operated on a Linux server, with their product catalogue on a server in Germany.

Fackler says: "If the website went down, we couldn't get timely or effective local support for the Linux server. The online catalogue management was centralised and hosted in Germany. This meant that cookies and shopping carts got lost and we couldn't change online catalogue information ourselves. Due to the fact that we only offer 20-30 percent of the items available in Germany, we often encountered products in our online shop that we weren't selling in the U.S. We also often encountered problems with wrong prices and incorrect specifications for our products. The major drawback was that there was no integration with our backend system. We had to print out orders and re-enter them. This was definitely not seamless e-commerce."

Tooltechnic upgraded its infrastructure for the e-commerce solution, which now consists of Microsoft Windows ServerTM 2000, Microsoft Information Internet Server, Microsoft SQL ServerTM 2000 and added Microsoft Dynamics NAV 4.0's Application Server as middleware. With a similar look and feel to Microsoft Dynamics NAV, end-user training on NAV-to-NET was straight forward. Because there was little customization required, the product was quick to implement and within budget. The new website went live in March 2005.

Key Benefits

Since implementing Microsoft' Dynamics NAV, Tooltechnic has been able to almost double its sales every year for the past three years, by adding only minimal staff. Tooltechnic has used technology to handle its growth, keeping costs lower and improving profitability.

Using Microsoft Dynamics NAV as the backbone for managing all financial processes, Tooltechnic has achieved a transformation in the way it runs its financial operations. By automating its core processes such as online ordering, productivity has been improved within the organization.

Using NAV-to-NET, end-users can manage the website themselves. Any updates on pricing or product information take place in Microsoft Dynamics NAV, and are immediately reflected on the website. Tooltechnic uses Microsoft Dynamics NAV's Application Server to translate between Microsoft Dynamics NAV and the website. By driving everything out of Microsoft Dynamics NAV, it reduces the need for data management and system management.

The benefits of a streamlined ordering process and enhanced online shopping features have had an immediate impact on its customers. Within one month of going live, online sales has accounted for a steady 10 percent of business. Before Tooltechnic went live with its new website, online sales accounted for only one percent of sales.

With the new system in place, Tooltechnic captures all customer information, which is then matched to an existing customer table. If it is identified as a new customer, the system immediately creates a new customer card. Customers can track order history, track status of orders, add wish list features to their online account and even update it.

The combination of the e-commerce solution with the Microsoft Dynamics NAV platform has resulted in a solid infrastructure from which Tootechnics can expand into new areas.

"We achieved a full return on our investment in the e-commerce solution within three months."
Lars Fackler, Manager Sales Office West, Tooltechnic Systems

Tooltechnic Systems LLC
(U.S.distributor for Festool)
400 N. Enterprise Blvd
Lebanon, IN 46052
765-482-4500
www.festoolusa.com
Number of Employees: 28
Solution: Microsoft' Dynamics NAV
Revenue: $21 million

IBS Serves J.A. Henckels a Cutting-edge IT Solution

Company Background

For over 270 years, Zwilling J.A. Henckels of Germany has been a manufacturer and distributor of kitchen tools, flatware and fine cutlery. New York-based J.A. Henckels USA is its largest foreign subsidiary and assembles and distributes products to the US market. The company's knives are of the highest quality and are preferred by many professional chefs as well as 'serious home cooks." J.A. Henckels USA employs 110 of the Group's more than 1,600 employees worldwide.

J.A. Henckels' products are sold in over 100 countries around the world. The company operates from a single location in the US with about 1,800 accounts representing over 10,000 shipping retail locations.

Business Issue

With 2,400 order lines per day, the volume of information is staggering. J.A. Henckels needed an IT solution that could easily and instantaneously handle this immense data volume.
The company lacked access to a sharp view of its daily financial results and it could take up to several days to run the appropriate reports. With a business that handles such large volumes, this was an unacceptable situation.

For audit purposes, it was important to register the details behind each order. Every transaction needed tracing from order processing, through warehousing and dispatch all the way to the customer. Tracking products was also of vital importance to the company's warehouse operation. Information regarding purchase orders, goods acceptance, bin location and customer orders was limited at best.

In order to remain cutting-edge and operate a successful business, J.A. Henckels needed to find a completely integrated and comprehensive software solution.

Solution

IBS provided J.A. Henckels with a cutting-edge IT solution. IBS software for e-business, financial management, distribution, warehouse management with radio frequency support, and production control were chosen to reduce costs, shorten lead-times, improve customer service, provide greater efficiency in internal and external processes, and make available excellent management information.

IBS software for distribution supports time-axis planning - an invaluable and efficient tool used extensively by J.A. Henckels. When processing an order, the system indicates what is "available to promise" for an item, per warehouse, on a daily, weekly or monthly basis. Each sales order line is automatically checked against the time-axis.

The Internet connection functionality of ASW NetStore allows J.A. Henckels' sales representatives to enter orders, gain instant access to product information, stock availability, order status, and accounts receivable details.

Another direct benefit of using IBS software is the resultant increase in order-taking efficiency. The company has grown without needing to increase the number of sales support staff. Order entry personnel are now able to work as customer support agents, with a better focus on sales rather than on administrative chores.

Another direct benefit of using IBS software is the resultant increase in order-taking efficiency. The company has grown without needing to increase the number of sales support staff. Order entry personnel are now able to work as customer support agents, with a better focus on sales rather than on administrative chores.

Customer service has also dramatically improved. Thanks to IBS, J.A. Henckels' accounts can now find out what is available to ship on a daily or weekly basis. This has, in turn, allowed the company's customers to better plan their inventory orders and distribution - an example of excellent supply chain collaboration.

Even with the large volumes being processed, J.A. Henckels can now see a perfect audit trail for every transaction created, on a daily basis. This integration allows the company to view its entire business on-line - an essential element for a consumer durables business.

Key Benefits

A direct benefit of using IBS software is the resultant increase in order-taking efficiency. The company has doubled the size of its business in the last five years, without needing to increase the number of sales support staff. Order entry personnel are now able to work as customer support agents, with a better focus on sales rather than on administrative chores.

Customer service has dramatically improved. One recent example is where a new product was introduced and sales demand was exceeding production capacity. Thanks to IBS, J.A. Henckels' accounts can now find out what is available to ship on a daily or weekly basis. This has, in turn, allowed the company's customers to better plan their inventory orders and distribution - an example of excellent supply chain collaboration.

IBS' time axis feature has further benefited J.A. Henckels, enabling the company to enhance and maximize customer service through keeping its delivery promises. Even with the large volumes being processed, J.A. Henckels can now see a perfect audit trail for every transaction created, on a daily basis. This integration allows the company to view its entire business on-line - an essential element for a consumer durables business.

"We need tools and a good infrastructure to be successful. IBS software is part of that infrastructure. Without it, we could not operate as a business."
John Henkel, CFO and VP Logistics, J.A. Henckels

J.A. Henckels Inc., USA
171 Saw Mill River Road
Hawthorne, NY 10532
914-747-0300
www.jahenckels.com
Number of Employees: 110 in the US - 2,300 worldwide
Solution: IBS Enterprise Solution (formerly ASW)
Revenue: $310 Million

Sterling Commerce Improves the Efficiency of Transportation Logistics for Dial Corporation

Situation

The Dial Corporation, a company of Henkel KGaA, is based in Scottsdale, Arizona. Dial manufactures and sells consumer products and employs more than 2,300 people in North America. The company is organized into three core business units: Personal Care, Laundry Care and Home Care and holds these trademarks: Dial, Purex, Renuzit, Right Guard, Coast, Zout, Tone, Pure & Natural, Trend, 20 Mule Team Boraxo, Soft Scrub and Combat.

Dial products have been in the American marketplace for more than 130 years, and the slogan for Dial Soap, "aren't You Glad You Use Dial?" has been one of the best-known slogans in America since its introduction in 1953.

Business Issue

In 2002, Dial recognized the need to implement a transportation management system to connect disparate systems and remote locations, while providing a solid return on investment.

In the past, the company's transportation department negotiated rates for its corporate-wide transportation and sent the information to all locations each month. Dial's local shipment coordinators used this data to prioritize and select carriers for their location's shipments. At the end of each month, corporate transportation managers evaluated and measured each facility's performance. Unfortunately, this postevent analysis rarely produced the level of route guide compliance, and corresponding cost reductions, the company expected.

Solution

Now, Dial uses Sterling Transportation Management System (TMS) to manage all 130,000 annual finished good shipments within North America. Dial's transportation staff updates carrier contracts in real-time to immediately take advantage of cost-saving opportunities, and shipments from various facilities are automatically tendered to carriers based on Dial's established business rules.

Since Sterling TMS is Web-based, it contains all of Dial's carrier contract information and shipment details. Using this centralized repository of information, Dial tracks the performance of carriers and locations to gain an accurate and comprehensive view of corporate-wide shipping operations and is able to perform timely audits of freight invoices. Throughout the planning, execution and settlement process, Dial provides alerts of business process exceptions to appropriate staff for resolution, thus improving service to both internal and external customers.

Key Benefits

By connecting disparate systems and remote locations with Sterling TMS, Dial has automated the shipping process and applied enterprise-wide business rules and performance measurement standards. In addition, Sterling TMS has helped Dial develop closer relationships with core carriers, while optimizing load planning and consolidation.

Since Sterling TMS offers full visibility to in-transit inventory, Dial tracks two carrier measurements in real time: expired tenders and rejected tenders (those a carrier had previously accepted). When either of these situations occurs, the appropriate transportation manager receives an alert and may then contact the carrier directly for an explanation.

Now Dial's transportation staff can update contracts in real time with carriers to immediately take advantage of cost-saving opportunities. In fact, savings from automating processes and reducing carrier rates more than exceeded Dial's expected return on investment. The company has experienced savings of as much as 12-15% in high-volume lanes.

"Sterling Transportation Management helped us achieve several strategic goals, including applying enterprise-wide consistent business rules and performance measurement standards and developing closer relationships with our core carriers, thus saving money in the long run, while also improving service levels."
Rob Shafer, Manager of Carrier Alliances, Dial Corporation

The Dial Corporation
15501 N. Dial Blvd.|
Scotsdale, AZ 85260
480-754-3425
www.dialcorp.com
Number of Employees: 2300+
Solution: Sterling TMS
Revenue: $1.3 billion

WMS Implementation Helps L'Occitane Stay on Fast Track

Situation

L'Occitane is a manufacturer and retailer of luxury personal care products including pure essential oils, cosmetics, skin care, soaps and hair care products. The French-based company's North American headquarters are in New York City while its centralized distribution center is located nearby in Lyndhurst, NJ.

L'Occitane's relationship with Adonix began around 2000 with an ERP implementation at its manufacturing plant at Provence in the south of France. In 2003, L'Occitane implemented Sage ERP X3 Distribution for its U.S. operations - including Order Management, Purchasing, Inventory Control, CRM and Accounting - to support their growing distribution channels that include company-owned retail and outlet stores, retail catalog and mail-order operations, an Internet Web site and wholesale accounts, including high-end specialty retailers and spas, corporate gifts and business-to-business.

Business Issue

Satisfied with the ability to utilize their back-office Sage ERP X3 functions to make more informed decisions, streamline operations and perform insightful product planning, the company next turned its attention to enabling their warehouse to efficiently support the tremendous store growth they were experiencing. L'Occitane entered the U.S. market in 1996 by opening a boutique in New York City. By 2000, the company had opened 24 stores nationwide, which skyrocketed to 135 by the end of 2005.

The challenge was to apply new enabling technologies to its distribution process without disrupting service to its stores. L'Occitane also sought to reduce supply chain costs while increasing productivity in the warehouse. Although the company had implemented Sage ERP X3 for its administrative and financial operations, the warehouse had primarily operated on a manual basis. As soon as Sage ported its WMS application - Sage Geode - to the Sage ERP X3 technical platform, L'Occitane jumped on the opportunity to become a pilot site, not only within the multi-national L'Occitane network, but as Adonix's initial North American Sage Geode implementation.

Solution

Sage Geode went live at L'Occitane's Lyndhurst warehouse in June 2005. "As we continued to grow, it made sense to have a robust system running on a common platform," said Chris Halkyard, Vice President, Supply Chain for L'Occitane.

Prior to implementing Sage Geode, orders were picked by store and staged onto pallets. Delivery times were scheduled for the stores, and pallets would be sent to a staging area before being shipped. Picking involved taking a manual cart into the warehouse and placing as many cartons on the cart as possible. Packing and labeling were entirely manual processes, receiving was a bulk putaway process and location replenishment was done by sight. "It was pretty much in the dark ages," commented Halkyard. With rent taking up 40 percent of supply chain costs, L'Occitane also wanted to restructure the layout of the 66,000 square foot facility by transferring space from outbound pallet storage to one dominated by picking activity.

L'Occitane also equipped their workers with mobile handheld radio-frequency devices and interfaced them with Sage Geode, creating a totally paperless environment. The company also installed conveyors, racks and material handling equipment to help reduce handling costs and expedite the flow of material throughout the distribution center.

To prepare for the changeover to Sage Geode, the manual picking operation was transformed into a process utilizing conveyor systems and 3PL's to speed up operations and eliminate transportation respectively. The new process started with product moving directly from receiving straight through to a pick/pack area, where flow racks and conveyors now direct items to a packing area where new automated equipment fulfills the packing and labeling process. Once an order has been scanned to confirm an item, quantity and carton, a manifest is printed and placed on the carton.

L'Occitane also began wave picking based on store location. Full trailer loads are now fluid (randomly) loaded and sent to the 3PL's Elizabeth, NJ and Detroit, MI facilities where shipments are then sorted by store destination and arranged for delivery. This asynchronous flow of store-order packages into the 3PL trucks not only eliminates the sorting process at L'Occitane, but it also helps reduce dock staging space.

Upon shipment completion, Sage Geode sends an electronic master packing slip directly to the stores to let them know what they'll be receiving, including the total number of items and the value of the shipment. A follow-up e-mail provides the same information by carton ID number in carton ID order so the stores can readily identify and record the products when they're received. "Now they have good notification on what is about to come in," said Halkyard, "and they can make room for it. it's terrific." This advance shipment notification feature enables stores that are waiting for a "hot" item to quickly scan the packing slip to find the carton that has the items they need immediately. "They can access right down to the item number or to the description," said Halkyard, ?and know they are getting a specific quantity of whatever they are looking for."

To ensure a minimum of store disruption upon "go live," L'Occitane constructed a huge order for the stores and doubled the quantity for "high demand" items. To compensate, they skipped a delivery the following week. The company also performed a complete physical inventory, scanning goods into a location as they were counted.

Key Benefits

On its first day using Sage Geode, L'Occitane processed 39,000 units in about 4 1/2 hours, over one third of their peak level target. Picking productivity was up over 30 percent. The new system virtually "eliminated" the time it took pickers to travel from one picking slot to another. "The biggest change since we put in Sage Geode is our ability to manage our workload and create density in the picking line," said Halkyard. "We now do more work in less space." The new system has also made it possible for L'Occitane to position their fastest moving items in close proximity to one other to maximize worker efficiency. "We are basically bringing more work to the picker as opposed to the picker finding the work," added Halkyard. In total, productivity in the first month after the system went live had improved upwards of 20 percent, and output per hour ranged from 600 to 900 units, double what it was prior to the implementation.

L'Occitane has also experienced reduced inventory costs. "we're now better able to balance out the months of supply we have in the company, what's currently in our stores, what's in the DC, and what's currently over the water in Provence," said Halkyard. "We want to keep as little inventory as possible while keeping our in-stocks over 95 percent." Mr. Halkyard is confident that L'Occitane will eventually experience 1.5 to 2 percent reductions in overall supply chain costs relative to the cost of goods sold.

L'Occitane expects to generate a return on its investment in all its new technologies in two years or less. "The systems we have now," said Halkyard,"should hold us for some time. We set this up so we could be in business for a long, long time in our current square footage."

"Productivity in the first month after Sage Geode went live improved upwards of 20 percent and output per hour ranged from 600 to 900 units, double what it was prior to the implementation."
Chris Halkyard, VP Supply Chain, L'Occitane

L'Occitane
10 East 39th Street
8th floor
New York, NY 10016
212-696-9098
www.loccitane.com
Number of Employees: 56
Solution: Sage ERP X3
Revenue: $179.3 milllion

Natela Turns to Made4net for an End-to-End WMS

Situation

Natela Importers is a leading food distributor in South Africa, distributing international brand names such as Ferrero Roche, Kinder, Nestle, and Yougata to name a few. Due to increased demand and the company's expanding geographical reach, Natela has built a new distribution centre in Johannesburg to meet its continuous growth.

To run and operate the vast new distribution centre with its diverse products and complex operations successfully, Natela has turned to Made4net for an end-to-end warehouse management system. The distributor has chosen to implement Made4net's WarehouseExpert" in its new CDC as a first step in optimizing its supply chain management and improving its operational processes.

Business Issue

Natela was managing a high volume of inventory using a paper-based system together with an older outdated inventory management system that did not include data collection or inventory tracking functions.

Natela needed to overcome the following obstacles:

• Reliance on paper-based systems for inventory information to manage a high volume of inventory.
• The complete lack of data collection and inventory tracking functions in Natela's Syspro ERP inventory management system, which failed to address the needs of the new DC to be built that year.
• Inability to track the company products' "time in inventory," which created orderprocessing problems.
• The total lack of automation and real-time data having a negative impact on operations and customer service levels.

According to Natela's Managing Director, Irad Yuval, the difficulties they experienced came at a high cost: "Our people routinely had to conduct a difficult hunt to find the right product to fill an order. In addition, expiration date was not managed properly and therefore we had severe write-offs at the end of each quarter."

With the company barely holding up against severe growth pressure, they could not afford to perpetuate their inefficient system by simply hiring additional personnel. Neither could Natela invest the time and expense required to develop a solution from scratch in Syspro. It became more than evident that a highly featured automated warehouse management system (WMS) was a must with time, budget and flexibility being factors of concern. After seeking the market, Natela decided to select Made4net's WarehouseExpert.

Solution

Deployment of WarehouseExpert took approximately 16 weeks, including training for about two dozen warehouse employees. The solution included a complete system for managing a warehouse, from receiving through optimized putaway, enhanced picking, replenishment, counting, resource utilization and more. The system was fully integrated into Syspro and supported PsionTeklogix RF terminals that the employees used as end devices.

Key Benefits

Made4net delivered the project on time and on budget. With its new central DC operated by WarehouseExpert, Natela has seen measurable improvement on multiple fronts.

• Warehouse personnel are now equipped with wireless handheld barcode scanning systems, directed by the new WMS that utilizes the resources based on real-time needs and in accordance with various operational constraints.
• The new directed picking capability has led to a quantum leap in worker productivity: a large order that once took 2-3 hours to pick can now be completed in a mere one hour.
• Accuracy vastly improved: instead of trying to interpret product labels, workers can now scan bin and/or product labels to instantly identify correct products.
• All products are captured with the associated code date control (expiration date or best before) upon receipt and the system ensures that workers pick the oldest lots.
• WarehouseExpert enables Natela to enforce its critical FEFO (first-expired, firstout) inventory management policy.
• Increased customer service levels.

"Clearly, the system has made us far more efficient, which greatly reduces costs," said Yuval. "Our cost associated with picking has been decreased by nearly 20%, our inventory turns have nearly doubled, and we've reduced errors."

"Our cost associated with picking has been decreased by nearly 20%, our inventory turns have nearly doubled, and we've reduced errors."
Yuval Irad, Managing Director, Natela Importers

Natela Importers
Unit 11,
Lakeview Business Park
Yaldwyn Road, Jet Park
POB 51461
Raedene, Johannesburg 2124
South Africa
+027 011-826-2200
Number of Employees: 250
Solution: Made4net WarehouseExpert