Disconnected systems and poor inventory visibility were causing a big fail for a $60 million consumer packaged goods company selling cosmetics. Without accurate insights, they overstocked slow-moving items, racked up storage costs, and left customers disappointed when in-demand products were out of stock.
But with help from and Microsoft Dynamics 365, they transformed this costly fail into a major win. In this interview, Cady Jackson explains how an integrated ERP system delivered $120K in annual savings, real-time inventory tracking, and smarter stocking decisions. Watch the video to learn how they did it and how your company can too.
The Fail
- $60m CPG cosmetics company
- Multiple, disconnected systems
- Poor inventory visibility
- Overstocking slow-moving items
The Fix
- Lower inventory carry costs
- High demand products on hand without overstocking
- Real time tracking across all data sources
- $120k annual savings with Microsoft Dynamics 365
Transcription for “Accurate Inventory Visibility Saves $120k with Dynamics 365 and Western Computer”
Anya Ciecierski, ERP Software Blog
This is One Fail One Fix with Cady Jackson from Western Computer.
We're talking about a consumer packaged goods company selling cosmetics with about $60 million in revenue.
They were facing a big problem with inventory, trying to get accurate visibility. Why? Because they were using multiple systems, including a standalone shipping tool, outdated ERP software, and separate inventory trackers.
So this fragmented approach made them really inefficient, and it ended up costing them hundreds of thousands of dollars because they were overstocking slow-moving items.
Without connected systems, they just didn't have the visibility they needed to make the right decisions about inventory. So Cady Jackson, tell me, why was this such a big fail for them?
Cady Jackson, Western Computer
Great question. Well, overstocking, especially in the CPG space, really can be a rather big problem. It ties up working capital, which can lead to increased storage costs and even lead to a lot of waste when things get damaged or become obsolete.
And, especially for this particular company, products that have a longer shelf life.
So not having visibility into their products, how they perform, things like that was, again, really leading to overstocking for them.
Anya Ciecierski, ERP Software Blog
Okay, so I think we understand the fail. Now, tell us about the fix from Western Computer.
Cady Jackson, Western Computer
So what we did for this company specifically, we helped them evaluate the Microsoft Dynamics 365 application. If you don't know, Microsoft Dynamics 365 is an integrated ERP system.
So we were able to bring everything together, from purchasing to order fulfillment, inventory management, shipping, and all the financial tracking that goes behind that, all in one system.
So they were not only able to have better visibility into their inventory but also better visibility into their cost of goods sold.
This integrated system also gave them the ability to track how items were performing, which ones were moving quickly, and which ones weren't, which also gave them the ability to then do better forecasting.
When you have that all-in-one solution, you can take a look and really slice and dice the data to better understand what items are moving where, whether it's geographic location or all those types of factors that would come into that.
This would give them the ability to make better forecasting decisions, which would drastically reduce the overhead cost of keeping items around for too long or just overbuying certain items that weren't performing well.
Anya Ciecierski, ERP Software Blog
Great. So what specific benefits did they see from this fix?
Cady Jackson, Western Computer
Well, some of the main wins for them were lower inventory carry costs. Always having most in-demand products on hand. And then that real-time tracking across all their data sources.
So for these guys, in addition to having their own warehouse, they also had several 3PLs strategically placed around the United States.
So they were able to know exactly how much inventory they had in any given warehouse location, which, again, very much fed into getting the right product into consumers' hands quickly and not having to tell a customer, oh, I'm sorry, that popular item is out of stock.
So as a specific example, they noticed that a particular product wasn't doing very well in the northeast. So they were able to reduce the inventory of that specific item in that geographic location and move it over to another area of the country where it happened to be more popular.
And just by doing that, they were able to save around $120,000 a year in potential losses by, again, being able to have the most popular items stocked where they needed to be, but then not overstocking other items that perhaps set on the shelf for too long.
Anya Ciecierski, ERP Software Blog
That's a huge savings. So what advice would you give to other companies to kind of avoid this type of a fail in the first place?
Cady Jackson, Western Computer
I think one of the biggest things for your company is to take a hard look at some of the systems that you have in place.
And if you don't have an ERP in place, take a look at one, like Microsoft Dynamics 365.
A good strong ERP is going to unify all the areas of business like sales and purchasing, production and forecast and planning.
It will give you the data that you're going to need to make smarter decisions about buying and stocking the items that are your most profitable.
Anya Ciecierski, ERP Software Blog
Wonderful. Thank you very much for sharing that story with us, Cady.
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By ERP Software Blog Writer, www.erpsoftwareblog.com