Problem Solvers – Softengine Expertly Configures SAP Business One to Resolve Inventory Management Issues for P3 International

P3 InternationalFounded in 1986, New York City-based P3 International (www.p3international.com) is a privately owned manufacturer of solution-oriented electronics targeted to environmentally conscious and technologically minded consumers. The company’s Kill A Watt™ and Save A Watt™ Power Monitor products are highly acclaimed power meters that enable customers to calculate the costs of using their home appliances, helping them conserve energy and save money. The company’s Sol-Mate Solar Living line of products harnesses solar power to reduce energy consumption and costs. Major customers have included Home Depot, Fry’s Electronics, Ace Hardware, Costco, Radio Shack, Sam’s Club and Lowe’s. P3’s products have been reviewed in major U.S. newspapers such as The New York Times and The Wall Street Journal.

The Challenge

Single-user Software Creates Bottlenecks and Unwanted Delays
For years, P3 management and staff relied on a very limited, single-user accounting program that couldn’t export data to any third-party software. Without integration between multiple databases and with access available to only one user at a time, staff had to endure time-consuming manual reentry of data when going from one database to another.
Another limitation of the software was its inability to track inventory in P3’s two warehouses – a main warehouse in South Hackensack, New Jersey and an additional warehouse in Long Beach, California. Instead, they had to rely on a cumbersome and error-prone manual inventory management system in which purchase orders, sales orders, invoices, etc. were entered into Microsoft Word documents and Excel spreadsheets.
[quote]According to Shawn M. Herzinger, P3’s Vice President, Products and Operations, “Due to limitations in our inventory tracking capabilities, there were times when a product would be allocated to an order when there was no inventory in the warehouse … something we refer to as phantom inventory. Obviously, this scenario was not acceptable from a customer service standpoint.”[/quote]
Lack of a fully automated and integrated ERP system led to other customer service-related issues as well. On occasion, multiple sales reps contacted the same prospect and invoices were late getting to customers, which negatively impacted cash flow. Furthermore, without real-time access to data across the company, communications were severely compromised; employees in one department often didn’t know what their counterparts were doing in other departments.

Solution

Flexible Configuration and Integration with “Extensions” Make SAP Business One Ideal for Smaller Businesses
with Unique Needs

Knowing that the status quo could not persist, Herzinger and his colleagues began a multi-year search for a comprehensive ERP solution that could integrate all departments “under one roof.” During this process, they received a call from Softengine (www.softengineusa.com), an SAP Gold Partner located in Woodland Hills, California. As Softengine learned more about P3’s long-standing issues, it became clear that SAP Business One was the right solution.

[quote]”I had thought that SAP was only appropriate for large corporate entities and therefore beyond our reach,” said Herzinger. “I was delighted to learn that they had a full-blown solution for a smaller business like ours. We eventually chose SAP Business One because it could be extended and we could take advantage of one set of features right away and then bring on others and integrate additional products as needed down the road.”[/quote]

Softengine sent out a project manager who conducted a very thorough business analysis to determine which features of SAP Business One would fulfill P3’s requirements right out of the box and what additional customizations and extensions would be needed to complete the implementation. “It was of utmost importance that the new system could support: 1) multiple warehouses, 2) contract pricing for special customers, 3) inventory allocation, 4) package labeling, 5) shipping integration with UPS and FedEx and 6) EDI,” said Herzinger.

  • Multiple Warehouses – While support of multiple warehouses is a core capability in SAP Business One, Softengine’s project manager helped P3 personnel extract additional functionality from this feature. “Softengine showed us how to use ‘virtual warehouses,’ which don’t physically exist, but serve as an additional repository for goods within the system,” said Herzinger. “This feature was also enhanced by Softengine to enable consignment selling, which we employ with certain customers. In this case, P3 owns the inventory until it actually sells, at which point the customer is charged for those sales.”
  • Softengine Configuration: Allocation Control Panel – The Allocation Control Panel proved to be Softengine’s most ambitious piece of customization work for this implementation. “We wanted the flexibility to allocate items from inventory to any order, regardless of when the order was placed,” said Herzinger. “To achieve this goal, Softengine had to customize the core functionality in SAP Business One, which allocates inventory in chronological order. Plus, we wanted the ability to ‘lock’ orders, especially when inventory of a particular item is in short supply.”
  • Softengine UPS/FedEx/USPS Shipping Connector – Softengine configured SAP Business One to provide seamless integration with both UPS WorldShip and FedEx Ship Manager software. “Once the shipment is generated in UPS or FedEx, a tracking number is sent back to SAP Business One and the entire loop is closed. This has saved us countless hours of data entry time and virtually eliminates input errors.”
  • PO Date Change Alert – Softengine customized the Purchase Order Date Change Alert feature in SAP Business One so that the system automatically alerts sales managers/sales employees of any changes to the ETA of incoming shipments that could lead to delays in shipping products to their customers.

Results

SAP Business One System Dramatically Improves Inventory Management and Cash Flow. Softengine Steps Up to Meet Every Challenge.

[quote]“For starters, with real-time inventory tracking, SAP Business One has helped us manage our inventory better, which has dramatically improved our cash flow. All the information we need is at our fingertips and there are no more huge piles of paper to sift through. Our reporting is accurate, input errors have been greatly reduced and we rarely incur penalties for late shipments, improper labeling, etc. from our larger customers, which used to be an issue for us. Our customer service performance has also gotten much better with our ability to keep customers informed every step of the way about the status of their orders and shipments.”[/quote]

“Softengine’s customization of the Allocation Control Panel has produced tremendous benefits as well,” continued Herzinger. “For example, we sell at least five different versions of the Kill A Watt™ Power Monitor, each with its own distinctive packaging. If we happen to run short of a particular version of the product, we know that some customers are happy to receive a substitute or equivalent product, while others are not. With this tool, we have an overview of supply and demand and the flexibility to make adjustments in how we allocate our inventory, as needed. This eliminates ‘phantom inventory’ and enables us to fill more orders and reduce backorders.”

Regarding the role Softengine has played in the success of the implementation, Herzinger is no less enthusiastic.

[quote]“During our entire business relationship, there has been no question or challenge that Softengine couldn’t handle. They have excelled at finding a way to configure the built-in features in SAP Business One to address a particular need, without having to perform a costly customization of the software. I can’t imagine how much time and money we have saved as a result.”[/quote]

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