Lumber Distributor Boosts Growth, Accuracy, and Customer Service with Microsoft Dynamics 365 Finance and Supply Chain Management

Background

A building materials distributor specializing in lumber, hardware, plumbing, and window products upgraded its out-of-date Microsoft Dynamics AX 2009 system to Microsoft Dynamics 365 Finance but needed to replace manual processes in supply chain management too. After reviewing several Microsoft partners, they chose Velosio based on its expertise in distribution and supply chain management. The CFO spoke to several Velosio clients and met the consultant they would be working with at Velosio, which sealed the deal.

Business Challenges

After implementing Microsoft Dynamics 365 Finance, the distributor was still using paper picklists, and didn’t have barcoding functionality.

Orders were flying out the door to its residential and commercial contractors, designers/architects, craftsmen, and wholesaler customers as the company grew, but there were no safety checks to ensure the right building products arrived at the new build sites at the right time.

They manage their own fleet of trucks for product delivery and had to manually key routing and shipping information into their shipping and route management system. Order planning, picking, and shipping were all manual, error-prone processes. “An eight-foot-long board looks a lot like a 12-foot-long board, so warehouse workers were grabbing the wrong boards all the time by accident,” says Velosio Dynamics 365 consultant. “To add complexity, it’s important to ship the building materials at the right time to the right build site. If you ship it too early, it may rain, or the builder isn’t ready for it. If you ship it too late, the builder needed it yesterday to stay on schedule,” continues the Velosio consultant. Customer service was at risk, and it was costly to ship orders multiple times.

Successful Implementation

Velosio successfully implemented Microsoft Dynamics 365 Supply Chain Management for warehouse management, inventory control, transportation management and master planning within a 9-month period. The solution is integrated with the client’s transportation system to streamline order management and cut down on manual re-keying. Users were trained onsite for mobile handheld device scanning and label printing, etc. The new inventory management process enforces scanning when the order is picked from the rack, when it’s taken to inspection, when it’s sent to the staging lane, and again when it’s loaded on the truck. The driver scans it again when he takes the materials off the truck at the build site.

These additional checkpoints ensure inventory accuracy – a huge advantage for them.” says Velosio’s consultant.

System Benefits

The lumber distributor experienced quick ROI from improved order and inventory accuracy. As they grow, they are making the right purchases at the right time, with the right lead time. “They don’t have giant warehouse facilities – just three small warehouses that don’t hold a lot of inventory,” says Velosio’s lead consultant for the client. “They now have enough stock to fulfill upcoming demand, with just the right amount of safety stock to fulfill orders at their walk-up counter. It was a ‘best guess’ manual process before,” adds the consultant. Customer service is higher, and the company can grow to unprecedented heights. Now, with the right internal and production controls, the client can be sure they are controlling operational costs while simultaneously meeting customer demands.