“Prior to SAP Business One, we had no visibility into our donated inventory levels.”
Steve Celaya, Director of Corporate Security and Facilities
- Name: Goodwill Industries of San Joaquin Valley, Inc.
- Location: Stockton, California
- Industry: Nonprofit
- Products: Job Placement Services / Retail Goods
- Website: www.goodwill-sjv.org
- System: SAP Business One – Goodwill® Suite (ERP, WMSm, POS)
No More Guesswork – SAP Business One and Softengine Team up to Deliver Real-time Inventory Solution for Goodwill Industries
Established in 1940, Goodwill Industries of San Joaquin Valley, Inc. (GISJV) is a not-for-profit agency that provides job services designed to help people with employment barriers to become self-sufficient. GISJV was incorporated in the state of California in 1940, just in time to assist with scrap salvaging efforts for World War II. Many of Goodwill’s early participants were veterans in need of job training and placement services. GISJV operates throughout the San Joaquin Valley, with 17 retail stores, two bulk-sale facilities and a separate not-for-profit dedicated to providing jobs for people with severe disabilities (Goodwill Service Connection).
It’s Difficult to Track What You Can’t See – Inventory Management Roulette
Goodwill Industries of San Joaquin Valley, Inc. (GISJV) was facing an enormous challenge – how to effectively manage inventory in 19 sales locations and two distribution centers, plus track 8,500 Tri-wall (Gaylords) donation containers located throughout the valley. For many years, GISJV had relied on a loose and mostly manual system of spreadsheets, white boards, an accounting program and a point of sale system. Since none of these components were integrated with each other, staff had to go to extraordinary lengths to produce and deliver daily and weekly sales and inventory reports. Tracking inventory at all the facilities was well beyond the capabilities of the agency’s manual procedures, so nobody really knew how much inventory was on-hand at any given time at the distribution centers and the stores. Without access to real-time data, staff often had to make educated guesses about inventory levels to determine what to stock. Thus, the best-selling items were often out of stock while poor-selling items were sitting on the shelves.
At the end of each business day, store personnel had to call in to the main office to leave a message with the daily numbers for sales, donations and how many items were available for sale. The following day, someone at the office would receive the information and then enter those numbers onto Excel spreadsheets. Sales numbers were usually written on a white board, transferred to paper, stuffed into an envelope and delivered by truck to the main office, leading to lengthy delays in getting sales reports. Purchase orders were created on paper and then hand-delivered up the ladder to two different directors before making their way to the president for written approval.
Another example of the gulf between actually seeing the data vs. making “guestimates” was the agency’s inability to track Tri-wall boxes at Attended Donation Center trailers, which are strategically placed around the valley for donations. These containers are transported to the warehouses where the contents are sorted for retail sales, bulk sales and trash. GISJV management had no idea how many Tri-walls were in service. They estimated a total of 5,500, only to find out later after a manual count that there were 8,500. As each Tri-Wall is valued at roughly $40/apiece, the estimated valuation was off by roughly 35% or $120,000, a significant amount for the organization.
Search for Integrated Inventory, Financial and POS Solution Leads to SAP and Softengine
After GISJV concluded that the SAP Business One ERP solution would serve as a solid foundation for its core financial and reporting requirements, management contacted SAP to get a recommendation for a trusted Partner that could help them design and implement the system. SAP contacted Softengine, www.softengine.com/, one of SAP’s Gold Partners, with an outstanding reputation for SAP Business One implementations and for the development of add-on products or extensions that augment the core functionality of the SAP system.
Alex Goudz, Softengine’s Chief Technical Officer, recounts the initial stages of the process that culminated in the implementation:
“When we had the kickoff meeting with GISJV, their most pressing need was to gain access to one centralized, fully integrated system that could track their inventory down to the individual donation item. On a detail level, they wanted to track each of the 8,500 Tri-walls from its remote location to the distribution center, see which goods from each unit made it to the store shelves and whether or not they sold quickly. Additionally, they wanted accurate, up-to-the minute data to help them make the best possible decisions regarding what items to stock and the optimal quantities to keep on hand at any given time in any facility.”
“We traveled to their main office in Stockton and settled in for a week to learn all of their business processes and determine the right add-ons that would team up with SAP Business One to deliver a complete solution,” said Goudz. “We also needed to figure out what modifications would be required to make the whole solution operate at peak efficiency. After a week onsite, we reached consensus on a system that included SAP Business One for financials, WMSm for inventory tracking, iVend Retail POS for retail operations and additional components for subsidiary functions.”
GISJV management requested that the Softengine programming team complete a few modifications to SAP Business One to make it comply with the unique requirements of their nonprofit structure, and to Softengine’s WMSm (Warehouse Management System mobile), to deliver enhanced inventory management functionality. One key modification was designed to facilitate tracking of all the Tri-wall containers. While the Tri-walls all look the same, they are used to receive different types of donations, such as books, clothing, hard goods, electronics and other goods.
GISJV wanted to not only track all donations they received from Tri-walls, but also break them down further by Type. To fulfill this request, Softengine programmers customized SAP Business One and WMSm to first assign a unique ID number to the Tri-walls and then add the specific Type after the ID number. Thus, Tri-walls containing books could be tracked separately from Tri-walls with clothing.
“Once we completed a specific modification to the system, it was sent to GISJV for testing at the distribution center and perhaps two to three other stores,” said Goudz. “After we had finalized all the modifications, we proceeded to deliver onsite training, starting with SAP Business One, followed by WMSm and then iVend Retail POS. Since the inventory requirements for the distribution center were different than those for the individual stores, we presented multiple trainings on the WMSm solution.”
Fully Integrated System
Softengine completed the implementation of the system at all twenty GISJV locations and management has been impressed with the results. Denise Ost, GISJV’s Chief Operating Officer, has been especially delighted with their newfound ability to use SAP Business One’s robust functionality to analyze data to help create and test-market different promotional campaigns and assess their effectiveness.
“In one trial, we tried out a discount coupon to attract more customers and generate more sales and though we succeeded on both fronts, we learned that the amount of the discount was too high and we actually lost money on that promotion,” said Ost.
“The good news is that SAP Business One’s Sales Analysis capabilities enabled us to evaluate the results of that campaign and then make adjustments for future promotions. Specifically, we can check the number of transactions, discount levels and net gain or loss per promotion and per location. We have to be very careful with how we spend our precious marketing dollars and the new system gives us the tools to optimize our investment in that area.”
Steve Celaya, Director of Corporate Security and Facilities, is likewise a big fan of the new system, especially its inventory tracking functionality. “Prior to SAP Business One, we had no visibility into our donated inventory levels, said Celaya. For example, we could only guess how many Tri-wall containers were in service at any given time and we had no way of making adjustments for donation levels during peak or low seasons. With our new system, we have visibility all the way down to a donated pair of socks. We can make informed decisions on how many Tri-wall containers to deploy for peak season, such as the end of the year, when people make end-of-year donations for tax purposes, and then reduce the number for the low season that follows. Now, we can pull all the data we need to allocate our containers for optimal results.”
Celaya continues on to praise the Softengine team and their commitment to the success of the implementation.
“I spent a lot of time with the Softengine team during the entire process and they were consummate professionals every step of the way. To me, they are much more than a software consulting company that happened to install our system; I consider them as good friends. Whether they were on the job at one of our store locations or at our main office, they took the time to learn all of our unique business processes and patiently explain the most technical processes to us in a way that everyone could understand. They were so respectful and passionate about our business and mission and they have gone the extra mile to help us get the most out of the new system. Plus, they have become avid Goodwill customers!”