As mentioned in Part One of this article, I attended an excellent panel session on “Optimizing Your Distribution Company,” at SuiteWorld with the following three panelists:
- Carl Cox, VP of Operations and CFO of Lightspeed
- Dadri Laine, Supply Chain Manager/Sr. Buyer, Surftech
- Matt Ryan, Manager of Customer Service and Sales, SIDI America
In Part One we looked at Lightspeed and Surftech’s stories.Here we explore SIDI.
SIDI America
Matt Ryan is Lead Customer Service and Sales Manager for SIDI America, a wholly-owned subsidiary of Italian cycling shoe manufacturer SIDI Sport. Ryan told us that early in 2010, SIDI America switched from QuickBooks and Excel to NetSuite. In spite of being a very small company, they also have done a lot of customization of NetSuite (are we starting to see a recurring pattern here?) for their particular application to make it their one single location to get all the information needed to run the company.
They have about 35 outside sales reps on contract who sell to a network of cycling retailers. SIDI doesn’t do a lot of ecommerce or direct-to-consumer yet, but would like to. Ryan said “Cycling is growing in US. We build the best products on the planet, but they are difficult to find. We need to leverage not just retail centers, but also direct-to-consumer sales. Today people can use the internet to find our products, find a dealer near them, and then make some phone calls to find out what is in stock. But that is old school. We would like have that information on our site, have them place orders directly through us, and then fulfill through our retailers stores.”
SIDI used to have just one DC,1 located in Reno Nevada (to take advantage of Nevada’s lower inventory tax rates). But half of their business is east of the Mississippi, so they decided to open a second DC in Memphis, TN. Ideally, orders shipping east of Colorado would ship from the Tennessee DC and the rest from Reno. But of course they don’t always have the exact perfect mix of inventory needed in each location, so they wanted the flexibility to fulfill to any location out of either DC when needed.
While the main issue here seems pretty straightforward, they had to consider different combinations of demand, as well as freight costs, shipping times, etc. After taking a step back, thinking through all of the possible combinations, and deciding what problems they were really trying to solve, they came up with ten different scenarios the needed to be handled. From these scenarios, they developed scripts for separating orders and deciding where and how to fulfill them, taking into consideration all the key factors. This is yet another example of the kind of functionality previously unavailable to firms of this size, but which they could create through NetSuite’s customizability.
Keynote Customers
One of NetSuite’s customers was highlighted on the big stage during the day one keynote address and made an impression on me. GoPro, an innovative maker of cameras active imaging solutions, was founded in 2003. They introduced a really hot HD camera in 2009 and started experiencing exponential growth having gone from 9 employees to hundreds of employees and being sold in over 140 countries. Wow! Growing by 25X in just over two years must be quite a ride and incredibly challenging for any size company. They said they couldn’t have survived that without NetSuite. It showcases one of NetSuite’s core value propositions for small companies – the ability to grow rapidly without straining or breaking the underlying systems running the company. In fact, an extremely common scenario for NetSuite is new, innovative companies that outgrow their QuickBooks or Peachtree system and turn to NetSuite for the next stage of their growth.
Small Companies – Big Capabilities
These customers’ experiences tell a story — that NetSuite’s success among SME firms can be tied not just to their SaaS model (‘outsourcing the complexity’ to make implementation and ongoing operations easy) but even more so to the ease with which very small organizations can customize the solution to meet their precise needs. Some people assume because a company is small, their needs are simple or standardized.That is often not the case. Putting big company capabilities within reach for small and midsize businesses has created a good business for NetSuite.
References:
- ERP for the SMB: Growing into ERP
- Wholesale Distributors: Meeting 21st Century Challenges
- Webinar: How Cloud Solutions Enable Wholesale Distributors’ Scalable Growth
- ERP Articles and Reports
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