Need to Move 1000s of SKUs? How Saristavros Restitched Intimate Apparel Wholesaler’s ERP
April 13, 2022
CFO Profile: Sandra Saristavros,Simon De Winter
Sandra Saristavros knew she wasn’t going to have any weekends for the next couple of months. After splitting with a major shareholder, the intimate apparel wholesaler Simon De Winter had to go through a dramatic upheaval that would affect nearly every part of the company.
“We were putting in a new payroll system, changing all the bank accounts, changing insurance companies, changing foreign exchange partners, and moving ERPs,” Saristavros, the company’s CFO, says.
“Everyone said, Do you really want to put an ERP system in in four months? But to restructure our whole business, change ERP’s, move from servers to the cloud, we were juggling three major projects simultaneously.”
Simon de Winter Group supplies major department and concession stores across Australia and New Zealand with focus predominantly in underwear and socks for women, men, children and infants. Its customers include marquee brands such as David Jones, Myer, Big W and Target. Founded in 1998, the wholesale business also offers quality lingerie direct to consumers through two online brands, Kayser and Fine Lines.
The company had no choice but to move to a new ERP, a sizable undertaking given that its inventory topped 100,000 SKUs. Fortunately, there was a lot of room for improvement – their system had not been upgraded since 2008.
Simon De Winter was using a server-based ERP, Microsoft AX, which it had bought in 2008 and spent heavily on creating custom modules. The tailored software “catered pretty well to our needs”, Saristavros says. However, the software was very outdated. The company had avoided upgrades since its 2008 implementation because of the associated cost and risk with its highly customised version.
Simon De Winter considered going with the latest version of Microsoft AX, now named Microsoft Dynamics for Operations. However, the customisations meant it would be a complicated process.
“We can never go down an AX path again because when we looked at it there were still things we would have to tailor to what we needed,” Saristavros says.
The wholesaler considered Apparel21, an ERP designed specifically for the wholesale distribution of clothing. While this would have minimised the need for customisations, the wholesaler’s CEO, Simon De Winter, wasn’t interested in a supplier owned by private equity.
The wholesaler also wanted to move to a cloud-based system. AX was utilising servers that were expensive to maintain. As the servers aged they needed to be taken offline for maintenance, which prevented the finance team from functioning.
De Winter selected NetSuite based in part on the quality of the demonstration and the strength of referrals from peers.
The wholesaler can produce extremely long invoices daily – up to 30,000 lines per sales order. Saristavros upgraded the Netsuite version to a higher tier to cater for the volume of sales orders and the sales order line quantity. This ensured that the speed of the sales order processes was not compromised.
Saristavros upgraded the NetSuite version to a higher tier to handle the demand and avoid a slower experience for staff viewing invoices with lots of SKUs.
The next step is rolling out NetSuite’s Warehouse Management System which will automate processes in the Australian warehouse for the first time. The objectives for this exercise are not just speed and accuracy in picking and packing; another goal is reducing key person risk.
“We’ve got people in the warehouse that have been there for a long time. We rely on their experience and their knowledge,” Saristavros says. “I think automation gives new people the ability to come in and pick things up quite quickly. Especially when you’re growing, I think processes are always good.”
The user-friendly grid interface in NetSuite’s standard inventory was already an improvement, Saristavros says.
Simon De Winter upgraded to NetSuite OneWorld to handle its Australian and New Zealand entities. The wholesaler holds some stock in New Zealand through a third-party logistics (3PL) that provides a pick and pack service. Both entities receive and make payments in multiple currencies.
The finance team used to run an Excel spreadsheet for overseas currencies and reconcile them outside the ERP. Then they double checked that the figures married with the bank statements. “With the old system it wasn’t automated. We used to work out what the dollar value was and enter it into a journal. Now the system does it itself,” Saristavros says.
Saristavros knows that, once the finance team has caught its breath, there is scope for yet more automation. The payroll is still manually journalled into the ERP and could be integrated, however with consistent staff scheduling there is little variation in payruns.
The company’s websites run on Shopify which is connected to NetSuite and “is working quite seamlessly”, Saristavros says.
Cash flow and Forecasting modules of Netsuite are other areas the business would like to investigate further. Currently these processes are performed outside the system in Excel however with future integration this will provide not just cost and time efficiency but eliminate risk of error.
Saristavros and her five-person finance team clocked 75 hour weeks for several months to complete the transition. Now, after 18 months of changing banks and updating processes, the company is seeing the benefits of running a “clean” system. “I’m just noticing that we’ve finally broken the back of it. We’re starting to get back to normal,” Saristavros says.
One of the benefits of the new ERP is that staff could easily work from home when the Covid-19 pandemic swept through. The corporate restructure was an opportunity to move most of the other systems to the cloud, including the Microsoft 365 productivity suite and upgraded IT security.
Reporting on a 14-year-old ERP was so painful that Saristavros only used it to produce trial balances. Even a P&L was too messy and ugly to give to the board, and it had no ability to produce comparative reports for prior years.
Instead, each time they needed to produce a report the finance team dumped the data from Microsoft AX into an Excel spreadsheet that was linked to another 30 files. Consolidated reporting included manually adding trial balances from various bank accounts and creating prior years.
“There were a lot of reports for our board meetings. Unfortunately, I couldn’t create any of them just by pressing a button,” Saristavros says. “With NetSuite, you can do a profit and loss and balance sheet which is terrific.”
De Winter (the CEO) can view which customers are up in sales for the month, which ones are down, and look up answers to his own questions.
“NetSuite is brilliant financially, the records are great, you can put your budgets in it. It takes out a lot of the communication because (Simon) can now do it himself. It’s really transparent.”
The finance team can fulfil impromptu requests much faster; if a stakeholder asks for a profit and loss they can print it off from NetSuite directly without spending time in Excel.
Journaling is also more user friendly and faster to set up recurring journals over a 12 month period. “I’m not just plugging in journals every month. If they’re repetitive I can set it up once and that’s it.”
The greatest efficiencies in the finance team are in the accounting area, Saristavros says. Improvements in processes for analysing sales data, updating general ledgers, managing cash books and reconciling transactions save about three days a month.
The ability to create reports quickly and easily has been really important for senior management to understand what is happening in the business, Saristavros says.
Rather than requesting that information and waiting days for a breakdown in Excel, the CEO and general managers can view real-time reports themselves. They can also view actuals versus budget in the one screen rather than outside the system.
“On a day to day basis there are lots of efficiencies for each person because they can just access that information a lot quicker,” Saristavros says.
Saristavros is satisfied that the new ERP is bedded down and working properly. She still runs logic checks every now and then and has always found the numbers accurate.
Efficiencies aside, Saristavros finds many small improvements as she goes through her own tasks. “I say to Simon, it’s just easy. I love the journals – you do a general journal, and someone gives you a different number and you can edit it before you close off for the month. It’s very quick.”
Despite an eye for detail, Saristavros says she now feels she has more time to spend on higher level activities. “Simon always has new ideas and things that he wants me to look at. And I do have the time to look at those at the moment, which is really good. The business is always expanding and growing and we’re always trying to improve it. So yes, I’m definitely doing more of that than I ever have.”
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