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Digital transformation with cloud-based distribution management platform

TL;DR What is TL;DR

A company's traditional processes were plagued with inefficiencies:

Digital Transformation: With a cloud-based inventory management platform integrating both internal and external processes, the company successfully eliminated various inefficiencies costs and achieved significant sales growth (see impacts).

Background

Vendermac Distribution is a design and distribution company for a variety of licensed merchandise. The production process starts with the company designing the product. The product design is then sent to an out-sourced manufacturer. Once manufactured, the company distributes the products to various resellers all over the region, where the products will be sold on the shelves.

Problem

The company holds thousands of unique products or SKUs at any one time. The lack of a information sharing infrastructure resulted in data re-entry occured at different stages of the production process, within the same company. With the non-trivial amount of information per product (e.g. size, dimensions, materials, etc.), coupled with the large diversity, the inefficiency costs to manually record them were significant.

As with all other distribution businesses, resellers often return unsold products to the company. The company re-catalogues these products upon receiving them. However, the return process involved a person writing down the SKU and quantity on paper, then another person keying the information onto a spreadsheet, resulting in long turnaround period (~2 weeks). Manual stock-taking process is human-error prone, correcting these errors also contributed to time inefficiency costs.

Supply-demand mismatch cost is an opportunity cost the company experienced due to the inability to react quickly to the market conditions. When the company had better sales than estimated, the company could not get new products manufactured fast enough, resulting in an under supply for the following months.

Overall, the company was plagued with costly traditional labour-intensive processes which can be transformed easily with technology.

Digital Transformation

Vendermac Distribution commissioned NGNRS to build a cloud-based inventory management platform with an ambitious vision to integrate and automate large parts of both internal and external processes, with the primary focus of eliminating inefficiencies.

The platform provides a single inventory for the whole production chain of processes, with role-based access privileges for product designers, sales teams, and accounts team. This means that product information will never be recorded more than once, since information provided by each department is built onto the same product stored on the platform. This new implementation also opens up information previously unavailable across departments.

A cloud-based digitized inventory enabled mobile capabilities. Stock-taking processes (returns/internal audits) now use a barcode scanner to zap products directly onto a stock-take module on the platform. Once the physical counting is done, the company's administrative staff just have to click on a button to have the stock added back to the sales catalogue.

Although the platform aims to integrate many things, compatibility with legacy systems was also implemented to allow for a smooth transition and for areas that is out of the project's scope. To enable this flexibility, the platform is equiped with multiple points of data export (e.g. catalogue/invoice exports to Excel spreadsheet). This allow the company to continue using their existing accounting system, among others. The Excel spreadsheet export is fine-tuned such that almost no editing is required before importing to existing systems.

Besides serving as a central information base for internal operations, the platform also integrates the external operations through a Resellers' Portal and a Manufacturers' Portal. The Resellers' Portal is similar to an e-commerce platform, but for corporate customers where resellers could login to make orders (B2B sales), and just like shopping on e-commerce websites, they get to browse/search/filter the entire catalogue to their hearts' content.

The Manufacturers' Portal, on the other hand, digitize the information communication between the company and the manufacturers. After the company submit product designs on the platform, manufacturers could login to the Portal, where they can receive orders and update on the manufacturing progress.

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