» Industry Changes
Dirk Manders, Beck Consulting
Industry Changes and Outdated Technology Impede Growth
In 2010, the management team at Kermit Lynch Wine Merchant (KLWM) was no longer able to ignore a simple truth: they had outgrown the ERP software with which they had been running their business for more than a decade.
What had worked so well for so long was no longer able to keep up with industry changes and technological improvements, and while employees were able to work around some of these issues, the situation had finally progressed to the point that their outdated software threatened to inhibit growth.
Something had to be done if Kermit Lynch was to maintain its status as one of the top wine importers in the United States.
Jeremy DeVries, Beck Consulting
The Early Days: KLWM’s Thought Leadership
Kermit Lynch Wine Merchant’s success can be attributed to the vision of Kermit Lynch, the company’s founder. In 1972, he started an importing enterprise with a single goal in mind: introducing Old-World wines from Europe to an American market. His ability to find the finest, hand-crafted offerings from France and Italy and put them into the hands of an audience who appreciated their authenticity and quality allowed his company to grow into a robust, well-respected organization. Always willing to share his knowledge and passion for wine with his customers, Kermit has written three books over the years. His efforts have not gone unnoticed: he has been twice presented with the James Beard award, the highest award for food and beverage professionals in the United States, and his company enjoys a reputation as a thought leader in quality wine imports for thousands of distributors, chefs, and wine connoisseurs in the United States and Canada.
The steady growth of Kermit Lynch Wine Merchant was not without challenges, especially as the company expanded its various sales channels. KLWM sells through distributors in the United States and Canada, wholesale to restaurants and retailers in their native state of California, direct to consumers through their retail wine store in Berkeley, and online.
This variety of sales networks created a complex matrix of inventory management and distribution challenges. Agents, sales representatives, and the management team all required visibility into inventory levels and availability, sales history, lot traceability, and full tracking of inbound and outbound logistics. As it is not uncommon for wine to be sold while it is still in transit from Europe, the team needed the ability to track not just current inventory levels, but also anticipate the availability and arrival of inbound product.
Jeremy DeVries, Beck Consulting
A Limited First System
KLWM addressed these issues in the mid-1990s by purchasing a highly-customized ERP software program. Developed to meet the company’s specific needs, it was initially a perfect solution, allowing KLWM to do business exactly as they wanted. As time progressed, however, changes within the food and beverage industry that had not been a consideration when KLWM’s software was initially developed were now front and center, and the company was unable to adequately address them within the current software package.
Food and wine importers face heavy regulations from a variety of agencies, and the associated rules are ever-changing. KLWM’s ERP system was unable to manage and store key documents for compliance with international, federal, and state regulators. Reliable tracking of individual orders and bills of sale became increasingly challenging, as did the management of inventory and supply chain operations, which involve the import, sale, and distribution of product throughout multiple countries.
Another area in which Kermit Lynch Wine Merchant experienced difficulty was their ERP system’s increasing inability to maintain compatibility with newer technologies. As Jeremy DeVries, Managing Consultant at Beck Consulting, explains, “The simple truth is that even if your software from 15 years ago used to have everything you need, it is highly unlikely that it will be compatible with current technology, which continually evolves. Over time, manual procedures and external spreadsheets are created to fill the gaps, but there’s always a breaking point. The additional costs and risks of this approach no longer make sense in a growing business environment, so a change is needed.” DeVries continues, “You can purchase a great bottle of wine from Kermit Lynch and wait 10 to 15 years before opening it; you can’t use the same sort of time frame when it comes to replacing your ERP software.”
Tim O’Dea, Kermit Lynch Wine Merchant
Today’s More Flexible Solution
As a smart and frugal business, KLWM used their custom solution for as long as possible, but eventually acknowledged that it was time for a change. Their search for a replacement brought them to Beck Consulting’s software package, bcFood ERP. Built as an add-on to Microsoft’s Dynamics NAV ERP solution to support processors, manufacturers, importers, and distributors in the food and beverage industry, bcFood ERP would allow KLWM to address all of their major challenges.
The Initial Functionality Plan
The Beck Consulting team worked with KLWM to develop a detailed set of requirements, also known as a “functionality plan,” for their ERP system. With their extensive experience in the food and beverage industry, the team was able to quickly understand KLWM’s unique processes, protocols, and requirements. These requirements were mapped out in detail to ensure that bcFood ERP and Microsoft Dynamics NAV could be configured to address all of KLWM’s needs.
This requirements definition phase also provided the Kermit Lynch Wine Merchant team with an early exposure to the bcFood ERP product, leading to a better understanding of how the system could support their growth. By collaborating with the Beck Consulting team early on, KLWM was able to gain the necessary level of confidence that they were working with a group that would help them meet their goals. When asked what factor was the most important in selecting an ERP system, Kermit Lynch Wine Merchant’s CTO Tim O’Dea responded, “Having the right technology is important, but at the end of the day having a partner who understands your business is critical. They can help you adjust to changing technology and business trends.”
Following the requirements definition phase, KLWM determined that their goals could be accomplished with bcFood ERP and Microsoft Dynamics NAV, and moved forward with the implementation.
Experiencing More Benefit Than They Imagined
The additional functionality gained by their newly-implemented solution made it possible for KLWM to meet many of the requirements that their old system could not address. For example, many of the compulsory regulatory documents that were previously unavailable to KLWM can now be stored within the database and generated as needed via bcFood’s Document Management and Data Warehouse solutions. Existing purely for reporting purposes, the Data Warehouse is a separate database consisting of predefined, customizable data cubes that are constantly refreshed with data from KLWM’s live environment.
Using the Data Warehouse has made it possible for KLWM to build and maintain their own reports, allowing them to stay current with ongoing business intelligence and documentation needs. Inbound regulatory documents are stored and managed directly from within the NAV database using bcFood’s Document Management solution, providing all NAV users quick access to critical documentation.
Dixon Brooke, Kermit Lynch Wine Merchant
Built For the Future: Mobile Functionality
For their part, Kermit Lynch Wine Merchant does not plan on waiting another 15 years to bring their software up-to-date. They are keeping their bcFood ERP/Microsoft Dynamics NAV current with additional upgrades.
They also plan to implement bcFood’s mobile functionality, which will streamline their inventory management activities, and are currently working with Beck Consulting to implement and integrate a retail point-of-sale system at their retail shop.
The Empowerment of Self-Sufficiency
This ongoing, working relationship between Beck Consulting and Kermit Lynch Wine Merchant speaks volumes about Beck Consulting’s service and bcFood ERP solution. Beck Consulting’s philosophy has always been to teach clients how to become completely proficient with their ERP software, empowering them so that they can resolve their own problems as they arise.
This self-sufficiency is further promoted by the absence of any sort of long-term service agreement from Beck Consulting. Service agreements tend to lock clients into a relationship with their vendor. Instead, the Beck Consulting team is there only when they are truly needed. By creating and implementing strong ERP software, and by giving Kermit Lynch Wine Merchant the right training and tools, Beck Consulting has forged a strong and lasting relationship with a happy customer.