MRP For International Hair Cosmetics

International Hair Cosmetics (IHC), based in Romsey, Hampshire, previously used their accounting system alongside a collection of spreadsheets to manage stock and production. The company manufactures product in Italy, with the UK locations providing logistics. Tristan Pattison, General Manager, said; "We had the worst of both worlds. As the business grew and became more complex, stock outs became common as the tools and processes weren't scalable. We had less than 95% stock availability, which is 5 out of every 100, and other products were massively overstocked. This cost us money directly, as customers would go elsewhere, and indirectly due to them losing confidence. It also caused a storage issue. We couldn't fix the leak, and we couldn't deal with the issues we already had, so we needed a solution."

The evaluation process

The company started to research several solutions, initially talking to their accounts provider but quickly discounting them; "They had a warehouse module for £100,000, and a manufacturing one, also at £100,000, which obviously was not reasonable. 123insight came via a series of recommendations, including a shared supplier."

Tristan attended a 123insight Evaluation Workshop, and also spoke with two customers already running the system; "The Operations Manager of one company was more than happy to spend his time to show me how it worked and the impact that it had had - that spoke volumes."

Selection and implementation

IHC quickly made the decision to attend the six days of 'No-Obligation' training in June 2018, on the understanding that if they chose not to move ahead with 123insight they could walk away with nothing to pay. After a further 1-1 meeting to iron out last-minute questions, they decided to move ahead; "The extra support that we got afterwards sealed the deal, which meant that we could go to our MD unanimously and say 'these are the systems we considered, this is what we are recommending, this is why, this is the cost, this is how we think we will install, and this is the implementation time line. That made it quite easy to get sign-off."

IHC registered for 123insight the following month, and were allocated an Implementation Mentor, who would follow their journey through to go-live. An on-site implementation day was planned, aiming at allocating tasks against each department, and explaining the relationship between 'tools (123insight), people and processes'. Tristan noted; "That was critical to understand that it wasn't just about the tool. This tool isn't going to solve all your problems if you haven't planned all the processes around it, and the largest part of the implementation planning was actually understanding that it's not logical to say that you want to do things the same way you do them today in a new system tomorrow, because the old system simply wasn't good enough for us."

Having had experience of using other ERP systems previously, Tristan was pleased with the ease of which data could be re-shaped and imported into 123insight from their old system; "We've performed data import a few times, because we now have multiple instances of 123insight. We installed first with a small company, then a large company. As we've grown and bought additional companies we've now been through the process a few times. My experience of that was that it was very easy. There is sufficient documentation that explains exactly what the file needs to look like and what information the system needs in each stage."

Going live

The company went live in the smaller company around October/November 2018, around four months after their initial training session, and in March 2019 with the larger company. In hindsight, Tristan would have performed both migrations simultaneously; "We decided to go live with the smaller business first as there was less data, and we didn't feel that we had the knowledge or bandwidth to handle both at the same time. In order to be risk-averse, we went through the implementation process twice, learning a great deal. Did it help overall - probably not, as it meant that we were in a hybrid world where we were doing some 123insight processes and some old processes at the same time. If we did it again we would do them both at the same time. Nothing fell over - the preparation we'd done was sufficient to make sure the lights stayed on. 123insight performed exactly as we knew it would. We turn one system off on the Friday, switching to 123insight on the Monday and no customers noticed the difference."

Traceability and quality

Around the same time as switching to 123insight, IHC also implemented ISO9001. 123insight's batch traceability was instrumental in dramatically reducing the time required for audits. Tristan explained; "One of the challenges we had with ISO 9001 accreditation was being able to track batches of products, because we didn't previously have an effective stock management system. That question became a lot simpler after 123insight went live. As part of ISO9001 we have to test our recall procedure, and we have a desktop exercise every year and demonstrate it to our ISO auditor. Of course, now, we can have that conversation, plan it out, and do it over email within half an hour."

One of the first savings to be identified was on importing stock from their Italian facility. "The most efficient way of shipping is to have a full pallet of 33 Euro pallets for one lorry. When you are in crisis mode and you have, say, 8 pallets that you need urgently and don't know when the next lot will be manufactured, you just ship them. It then costs a lot more money, as fresh air has a cost. We've therefore been able to redesign our business. We've added a separate location since moving to 123insight. Using the warehouse management, we can manage both of these, and could then see which products were moving and when it would arrive, which fed back into product availability. If a product was going to be late, we could expedite it or create substitute products. Just having that information allowed us to take effective action."

Workflow processes were accelerated, with paperwork being completely eliminated from the office, with only stores and shipping related paperwork now being produced. This had a knock-on effect that when the company's printer leasing contract expired they reduced their costs by 90%, along with additional savings on electricity, paper and toner. Tristan noted; "That had a real impact on our P & L as well as an ecological one."

Stores and stock control

Stores was greatly impacted by all of these changes. Less stock required less storage, allowing them to reduce their rental costs. Errors drastically reduced, and stock turnover was reduced to under 90 days, requiring fewer stock checks. Annual stock checks were replaced with rolling 'ABC' stock checks. "Having less inventory on-site has had two impacts on us. It's allowed us to reduce our rent bill, so there's a direct P & L impact. Also, if you've got 100 pallets that you are counting just because it's there, you are impacting the efficiency of your warehouse. Someone is counting that and adding no value to your business. Our warehouse is cleaner, tidier, calmer, and much more effective. We haven't just put pressure on people to deliver better results. In fact, that's a natural outcome of all the changes we've made. 123insight has been central to that."

A previous common problem was that orders would take up to 72 hours to ship. The customer might make changes, which may not get picked up, then requiring further products to be shipped or returned at additional cost. Now, orders are shipped in 3-4 hours. "We don't have surplus inventory and there isn't that unnecessary movement, We've reduced the possibility of the customer changing their order and creating errors - customers are happier as we are getting orders out the door."

Accounting software switch

IHC also switched their accounting software to Xero and took advantage of Accounts Gateway® to handle the tight integration between the two systems. Tristan noted that the implementation was seamless; "We just needed to map tax codes and nominal codes up front, but it was very, very simple. It's been a game-changer for our financial department. It has eliminated a lot of non value added activity."

An alternative business approach

123insight's Customer Care team have continued to deliver further benefits; not only helping them to get the most out of 123insight, but also keeping them abreast of future developments; "It gives us continuity, and a feeling like we have a conduit to understanding what's going on at 123 Insight."

123insight's subscription includes the software, all updates, technical support and a dedicated Customer Care Manager. IHC also regularly take advantage of 123insight's Remote Upgrade service, with Tristan noting it was a stark contrast to upgrading their previous system; "Upgrading our old system was awful - much more complex and difficult than 123insight. At £345 it's not even a discussion - it's at a price point that it makes no sense to skip an upgrade, which means it's relatively manageable steps. Our previous system was expensive and cumbersome, which meant that we did it as rarely as possible. If you've missed several upgrades it was then quite a different beast at the end of it, which led to a whole load of problems. So that was a really attractive element of 123insight."

IHC were also invited to discuss forthcoming development on a relevant feature with 123 Insight. Tristan felt that this helped to further cement their relationship; "One of the attractions with 123insight was that we felt that there was a real opportunity to work with them to help with the roadmap journey. The opportunity to talk with them directly about possible future development gave us a feeling of being able to influence the direction."

IHC have significant global growth plans going forward, which they aim to achieve without any increase in admin head count or significant warehouse footprint, which Tristan attributes to the confidence that 123insight has given their business. He finalised; "We could more or less double in size now. The number of people in the warehouse would grow in line with volume, but the number in back office wouldn't need to grow. We chose 123insight on the basis that they had a track record, we knew the individuals, they were in it for the long term and they were the right partner for us."