Vitaco New Zealand

Background

Vitaco New Zealand came about as a result of the complex merger of two well known companies: Nutra-Life and Healtheries. Previously at separate locations, the merger saw the two businesses move into one amalgamated site in East Tamaki, Auckland.

The move effectively doubled the size of the East Tamaki site, and the new scale added real pressure to the business in terms of production schedules and delivery timeframes. "While the separate businesses were relatively small and manageable, bringing them together without simply doubling the headcount and management team, meant there were a number of new challenges for the business", says Mark Sykes, IS Integration Manager at Vitaco. "We had to become more focused on our processes, and thinking about the end-to-end business operation", adds Mr. Sykes. "We were no longer able to operate in silos as we possibly had in the past".

Key Challenges

Best Practice - Staged Warehouse Operations

A fundamental challenge of the implementation was accommodating the unique nature of each business. Nutra-Life services the health food and pharmacy markets, whose relatively low volume but high value orders were usually made by phone and previously picked by hand. Healtheries services the grocery sector with food & supplement products and orders are, by contrast, higher in volume and frequency.

"The two businesses were almost opposites of each other, and both had quite different mindsets, which required a new and very different set-up in the combined warehouse", says Mr. Sykes. "As small individual businesses it was easy to service individual customer orders as they came in, but when you scale up that business to more than 200 orders a day, you've got to be much smarter about how you prioritise your workload".

Late into the implementation, Vitaco and Avanti Solutions looked at the volume of new work about to start flowing through the warehouse and did not feel that the standard processes that NAV supported would deliver the throughput they required.

Vitaco and Avanti began working with expert third-party warehousing and supply chain specialists to further analyse and define Vitaco's changing requirements, before specifying an appropriate enhancement to NAV's Warehousing Module. Critical to success was the ability to 'stage' warehouse operations in order to identify and pick the most important orders first. This was especially important for all grocery sales where delivery times are rigorously scheduled and if you miss your delivery slot your truck is simply turned away.

Avanti's intimate knowledge of NAV's capabilities, meant it was able to quickly introduce an effective modification, with minimal impact on the project's looming deadline and overall budget. "We know we certainly wouldn't be where we are today, without last minute add-ons like the Outbound Warehouse Request module", says Mr. Sykes. "We certainly appreciate the Avanti team's ability to remain flexible to our changing needs".

Rationalise Discounts And Regain Pricing Control

At a high level both businesses looked quite similar, but with grocery related sales there are much more rigorous pricing and discounting requirements on Vitaco. "We built an entirely new discount module within NAV and customised it to meet our specific requirements", says Mr. Sykes. "Talking with Avanti and mapping it out was a critical stage of the whole project and their experience and expertise in this area was invaluable", he adds.

Building a custom discount module from scratch allowed Vitaco to take a step back, redefine and comprehensively rationalise its discount profiles, which had over time become extremely complex and confusing. "When we built and deployed the new discount module we rationalised down from around 5,000 unique discount profiles to less than 300 lines of discount" says Mr. Sykes. "We were also able to introduce much greater control around manual discount overrides, and we now have thresholds that require approvals".

EDI

Another important challenge of the implementation was the need to introduce a bespoke EDI solution to integrate into NAV. Vitaco trades by EDI with Foodstuffs Auckland, so it needed to work with Avanti to develop a system that not only met its immediate customer requirements, but would also be scalable for when other EDI partners come on board. "Avanti provided a robust EDI solution for Vitaco, one that we could definitely leverage off in the future", says Mr. Sykes.

The Solution & Key Outcomes

Vitaco's implementation was one of the largest and most complex Microsoft Dynamics NAV solutions delivered by Avanti Solutions to date:

• Approximately 75 end users
• Rich new levels of custom functionality, specific to Vitaco's unique requirements
• Greater overall work throughput and control of outbound order processing
• Dramatically improved discounting management and overall pricing control
• Scalability on business-critical functionality to future-proof the business
• Solution delivered 'right first time' - on time and to budget

In choosing a preferred partner for its ERP requirements, Vitaco has a clear set of criteria. "Because of the size of our operation we need a partner that is adaptable and has highly experienced consultants, willing to push back when they feel our ideas could be wrong", says Mr. Sykes. "Our relationship with Avanti is extremely strong, and we enjoy working with the same expert people across the life of the project", he adds. "Avanti offers end-to-end business insight that's been an ideal fit for our requirements", he concludes.