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  1. Technology
January 29, 2014

How one wholesale distributor keeps the customers coming back

Dental specialists J&S Davis simplified distribution, implemented electronic ordering and improved business processes.

By Duncan Macrae

For more than 100 years, J&S Davis has supplied and distributed high quality, innovative products for dentists and hygiene professionals across the UK and Ireland.

With an annual turnover of £3 million, a reliable customer base comprising everything from engineers operating from garage stores, right up to 400-employee organisations, this boutique dentists’wholesalerhas built an enviable reputation for quality products, reliably supplied.

Daniel Davis became the third-generation owner of J&S Davis, when he purchased the company back from Finnish dental equipment provider, the Planmeca Group. He immediately instigatedthe roll-outof the new Dynamics NAV software solution from ERP providers, Azzure, to seamlessly migrate the business and improve the management of its operations.

Daniel Davis, the Immediate Past President of the British Dental Health Foundation is the great nephew and grandson of founders, Joe and Solomon. He explains why J&S Davis needed to implement a new system – and quickly. "When I bought the business, it was essentially running on three separate systems. The existing ERP system was also much bigger than we needed and we were having to adopt some complicated procedures to work around its intricacies."

The solution

IT software providers, Azzure, provided Davis the solution he needed. "I looked at a half dozen solutions, and spoke to three suppliers in detail about cost and time to implement. Azzure’s honesty and business ethic appealed to me and led us to partner with them," he explains.

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Swift implementation meant J&S Davis soon had a sophisticated system to streamline its purchasing and sales process, plus the financial capability to deliver the accurate and timely reporting it needed.

But it was no mean feat: "Effectively we had to bring together two disparate systems, at the same time as get to grips with a new purchasing system. It was fairly traumatic. But we achieved it in just under four months."

Centralised financials have created enormous time efficiencies. "We get monthly P&L’s and a full set of accounts within a week of each month end; previously it would take a lot longer because we’d have to look in two different systems and then massage the figures through a bit. With everything coming from one place, it’s seamless; if we have a question we know exactly where to look."

But it was the move to new premises when the new system really came into play for J&S Davis. "We were sharing premises with the previous owner, so after implementing Microsoft Dynamics our next step was to move the business," explains Daniel. "Once we found a site, we moved offices first, then we had to move the warehouse; we’ve got more than three and a half thousand items, so it wasn’t something we could just do manually."

Help was at hand. "Azzure wrote a process to move the stock from the old location to the new, allowing stock to be put directly into its allocated bin space. Dynamics NAV holds all the stock in individual bin locations, but moving to our own warehouse meant we were effectively starting from scratch, with our own racking and own bin numbering system; and we couldn’t possibly replicate the existing numbering system,because to be honest, it wasn’t very good."

With everything ready to go, J&S Davis was let down at the last minute by its racking supplier. "As we finished packing, we were told the racking wasn’t coming for another two weeks."

There was no option other than to leave stock on the floor of the new warehouse "Although it was organised, it was literally impossible to pick, so we just hands to sit on our hands," says Davis.The company’s salvation was the timing of the move – and Azzure IT. "It was August, which is a quiet time for us. Plus we’d pre-warned customers we were moving and to order in advance to avoid delays.It was a nightmare but Azzure were the one constant; they did exactly what they said they would do."

With stock relocatedvirtually in the NAV system, as soon as J&S Davis was able to complete the physical move, the business was back online.

"Once we got the stock onto the shelves, we could then get the picking documents to tell us where to locate it. Thereafter, our whole process became really slick."

A sharp contrast to the way things were before, explains Daniel: "It used to take up to three times as long to find something at the old, shared warehouse, because it wasn’t very well laid out, and not everything was where the system said it would be. Sometimes you’d walk away empty handed because you couldn’t find the stock. Now we know we can go and find something literally straight away."

And theconsolidation of the office and warehouseat the same site hasbrought more benefits. "Before if I looked at something on the computer and wondered how it was packed for example, I’d have to get in the car or make a phone call. Now, I can just stroll out into the warehouse, have a look, come back to my desk and sort it."

It’s benefitting J&S Davis’ customers too: "Before we’d have to depend on the availability of the warehouse staff and space and ended up doing most of our selection process at the weekend. Now with our own warehouse and staff, we are able to tailor deliveries to suit the customers, rather than the availability of staff."

Fuelling improvements in customer service is the ability to access customer information immediately. "When we have implementedNAV Document Manager, all documentationwill bein one place – we won’t need to rely on paper at all. Customer orders will bestored against sales orders; supplier’s invoices too,will bescanned into the system as they come in. It should saveus at least 10 per cent in admin time across the board."

The benefits

The result? Customer service that well exceeds expectations. "Most of our customers are regulars who make stock orders once a week and expect it to be delivered within 10 days. We normally well exceed that, getting their orders out the next day or the following. In fact, wedeliberately slow down the process to allow extra time to check orders for supreme accuracy but even so,the Azzure system allows us to get the products out to customers a lot faster than before."

Another advantage of NAV comes from being a cloud-based hosted system. "If you’re off-site, you’re not reliant on phoning people to look for something. You can deal with things remotely; even if we couldn’t get into the building, we’d still have access.

The system is not only helping improve serviceto customers; it’s helping the companyat the supply end too. Importing dental products from far-flung territories, such as Japan, Germany, Finland and America,lead times for J&S Davis’ are long. Yet stocklevels need to remain constant, to ensure on-time delivery to the customer.

"When we started using Microsoft Dynamics NAV, we built pre-existing average lead time information in to the purchasing system. But now with the new system in place, we’re in a position to review those average lead-times in detail," explains Daniel.

"Overall inventory is where it should be, but I know we can fine tune it and improve it; there are some products where we’ve got too much and some we’ve got too little. The lead-time is a key component of a formula NAV uses, if you over or understate it, you either get buried in stock or you have none at all. Now we’ve got our own Warehousing and Purchasing Manager, we’re in a position to get average lead-time information from NAVby product. We can double-check all our existing averages to make sure there aren’t any errors. We can also see how sales have evolved, because thatobviously influences what levels we hold. We’ve got immediate access to all this information andmore importantly we can rely on it."

With the ability to offer customers a more responsive service, and the capability in place to better manage and report on the business, Davis’ focus is now on growing the business, and is already making strides despite stagnation in the market:

"Changes are going to be made to dentist’s contracts in the next two years, which are going to completely change the way things work. As a result, uncertainty hasrippled through the dental profession really fast and people only buywhat they need."

Consequently business remained flat in the areas where Davis was expecting growth, but sales of a revamped product plugged the gap, bringing in £300,000 of unplanned revenue and now J&S is looking ahead.

"We pick very carefully what we sell; only taking on products that complement what we already have, and which will add value for dentists and hygienists. With the new Azzure system in place and improvementsmade to the code creation process, we’ve taken on a few more lines in recent months that will give us an opportunity to really grow the business."

With the benefits of NAV firmly secured, J&S Davis is hoping to gain even more from the upgrade to NAV 2013. "Not only are there functional improvements on the purchasing side, it’s an improvement to the look and feel of the system too." With a set of pilot data in place, J&S Davis isready totest the system.

But the company is not just keeping up with IT improvements, it’s staying ahead of the curve in its industry. "The system is set up for electronic ordering, but that’s not the way most customers in our sector work at the moment; orders come in via email which we then have to individually key." When the market catches up, J&S Davis is well and truly prepared. "Migrating to electronic ordering will not only allow us to process orders more quickly, it will be more accurate too; allowing us to give our customers an even more responsive service."

Davis reflects on how far the company has come in a matter of just a few months: "If I think back to a year ago, we would have no idea what we had in stock, or where it was, and we had no confidence in our systems. If a customer phoned us and said they hadn’t received their order, we’d have to believe thembecause we didn’t trust the warehouse to get it right."

Now, the company paints a very different picture. With integrated financials, J&S Davis has literally shaved up to 20% off its debtor days. Picking has been simplified; distribution is moreefficient;electronic ordering is ready to go and with excellent visibility across the business, customer service is top-notch.

And Davis is quick to acknowledge his Dynamics NAV supplier as instrumental in the company’s progress. "Azzure are a great support to us and without the new system life would be very messy indeed."

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