Why Cin7 Wants To Join The ERP Club. Does It Have A Case?
Inbal Rodnay Steinberg
April 5, 2019
For the past five years I advised people to only use Cin7 if it had specific functionality that they required. Otherwise, it was better to opt for other inventory apps simply because they were more usable.
Cin7’s lack of usability was simply frustrating. It had functionality scattered all over the place. Like a field that showed up in two pages under different labels. Or the mind-blowing fact that by entering a date in a particular field you had implicitly created an invoice. And where do you then find those invoices? Aha, not as easily as you might think.
Founder Danny Ing says that he was aware of this. ”At first we didn’t give (usability) much thought because we thought we were going to automate everything anyway,” Ing said at the company’s recent conference.
Now Cin7 has overhauled the user interface and at first glance it is definitely starting to look better.
Now this is how you do multichannel!
Cin7 leads when it comes to businesses selling through multiple channels. If you have a retail store, why not try listing some of your products on Amazon as well? And what about eBay, Etsy, and other marketplaces? And what if you could easily allow customers to pick up their online orders from the bricks-and-mortar store (known as click and collect)? And the integrations required for selling into big box retailers?
Cin7’s idea is that if it is extremely easy for businesses to list products on multiple sales channels, the experimentation cost is low, sales go up, the business grows and it’s a win/win for the user and for Cin7.
The company describes itself as “the number one multichannel ERP” (we’ll get to the ERP claim in a minute).
To justify that claim they seem to have invested heavily in functionality and integrations around the many channels and in making them usable through central dashboards.
I love that Cin7 is busy building integrations. Listening to their integrations developer speak, it is clear that the integrations are deep and thorough. For example, Cin7 now supports Shopify’s multi-location feature by mapping each Shopify location to a Cin7 one.
Integration is forever a chasing game. New features in an app become fully valuable only when the integration can reflect the added data in the other app.
This is how you give superpowers to small businesses
The holy grail for wholesalers is selling to big-box players like Myers, David Jones, Coles and Woolworths. But when you do manage to get in, you have to comply with very strict requirements around transacting with them, usually through EDI.
Electronic Data Interchange, EDI, is the protocol through which you must receive big-box retailer orders, inform them of shipments and deliveries, log change requests, and send invoices. You can manually log onto the retailer portal, but better yet, you want your systems to integrate directly into their systems, pulling and pushing information between them in near real-time.
Any misses or delays and you get financially penalised or worse – kicked out.
Cin7 chose to develop its own in-product integration with most popular Australian brands (some inventory apps use third party EDI solutions).
The superpower, in my view, is controlling all those interactions with big-box players in a single, concise dashboard.
Is Cin7 an ERP?
The Cin7 team describe their app as an Enterprise Resource Planning (ERP) system. Is it really an ERP?
By definition, a business application is an ERP if it has a financial module at its core. Cin7 doesn’t. It integrates with Xero and now with QuickBooks Online (a work in progress).
Definitions aside, it does seem to be the most deserving of this title out of all the inventory apps in the Xero and QBO marketplaces.
The reason I say this is not for its breadth of functionality, which is similar to the others, but its depth of functionality and the maturity of the businesses they seem to be targeting.
All leading inventory apps (I am thinking DEAR Inventory, Unleashed Systems, TradeGecko) have roughly the same functional scope. They all integrate with your website, record your wholesale orders, manage your stock levels and stock takes, and help you reorder stock.
But there are differences in the depth they go into. What do I mean by depth?
One example is the difference between supporting only fixed bin locations versus dynamic locations. (A business can store product in the same location in its warehouse or it can store the same product in multiple locations in its warehouse.)
It’s the difference between having a single method of apportioning landed costs to the items in a shipment (usually by dollar value) and giving the user the choice of dollar value, dimensions, weight, or manual allocation.
Then there are business maturity functions such as role-based dashboards and the concept of user roles in general. These are not available in all small business inventory apps.
There is also depth in productivity functions. For example, branch routing, where you give the system a set of rules and it decides on the best branch location to fulfil each order. You can even split the order to multiple sites rather than manually transferring goods to a single location before fulfilment.
I certainly saw some processes today that made me think more ERP than Small Business Inventory.
Some of it was commercially available out-of-the-box, some was “Speak to us to enable”, and some was coming soon. But all the same, it shows a strong focus on bigger, more established users.
Warehouse management is coming to town
While all of the popular inventory apps handle picking, packing and stocktaking, some of them are introducing a separate warehouse management system (WMS).
You don’t need this if your operation uses third-party logistics (3PL). Your 3PL provider will handle that. But it will make a huge difference for companies fulfilling orders in-house.
DEAR Inventory released their WMS last year and TradeGecko has a picking/receiving scanning app.
Cin7 showed its upcoming WMS which seems to go beyond the basics. Some of the more advanced warehousing functions include:
Dynamic stock location. This means that the bin location is not set in the product definition, but rather we can place the units of the product in various locations in the warehouse and the system will record that.
Integrated scales to weigh packed goods as a safeguard against wrong product packing and to send actual weight to the shipping apps.
Stock receipting into racking or cross-docking.
Holding stock and creating in-branch areas to allocate stock for certain uses. This is often implemented in simpler systems using virtual warehouses which require manual stock transfers to mimic allocation areas.
Packaging, so that the system is aware of packed dimensions and can send accurate information to shipping apps.
Batch picking, where you pick from warehouse locations once for multiple orders and then pack them into the different orders as a separate step.
All in all, Cin7 is carving a robust path into the realm of ERP. Not sure how the Cin7 team feel about the constraints imposed by small business accounting software, and how they will handle their customers suffering from those constraints. This will be an interesting space to watch.
I spent the day in a room full of active users of the software, chatted to them and heard stories of using Cin7 to successfully grow and stories of hair-pulling frustrations.
Cin7 staff were available for unlimited, one-on-one catch-ups with users, and the founder (and still the main product architect) was furiously taking notes while chatting to clients in great detail.
Overall, it gave me a good feeling about the future of Cin7.
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