Home Improvement

The essence of attracting and retaining customers is similar in nature to the California Governor's race: Unknows come out of nowhere and familar faces surprisingly disappear. To successfully manage this fluid situation CG manufactures have something Californians don't: Customer relationship management (CRM) tools. But managing and satisfying the fickle needs of customers, especially from the manufacturing side, involves more than a stand-alone CRM package.

Such is the case with F. Schumacher & Co., a New York-based manufacturer and distributor of high-end home accessories. In October of last year, the company decided its disparate systems (110 servers with 40 different applications) needed a complete overhaul in order to facilitate its business goals instead of just performing a series of individual tasks. To make this transformation effort effort into a reality, the company turned to J.D. Edwards to unleash more than 40 ERP, supply chain, CRM and business intelligence applications to all 23 company locations in the United States and abroad.

"Our current disparate systems do not synchronize well enough to provide the kind of company-wide visibility and high level of customer service for which we are striving," says Andre Duncan, chief information officer, at F. Schumacher. "We believe our ROI relating to both the financial and process-oriented pay back will be quite substantial."

Offshore Challenge

Over the past century, F. Schumacher's client base has grown to 40,000 and ranges from interior designers to large chain stores such as Target, Home Depot, J.C. Penney and Linens n' Things. A portion of the customers extends into Europe, Mexico, South America and Japan. The company's products include fine decorative fabrics, wallpapers, furnishings and accessories that fall under six, high-profile brands each aimed at a specific customer base. Schumacher, Patterson, Flynn & Martin, Rosecore and Greef brands serve the interior design crowd. The Gramercy and Waverly brands are aimed at the decorative home furnishings market while the Village brand focuses on the do-it-yourself, home- improvement retail market. Since a majority of F. Schumacher's manufacturing has moved off shore, meeting the demands of retailers adds an additional strain on the company's supply chain, according to Duncan.

"You have to look at how feasible it is to get your product produced and you have to know the true cost," says Duncan. "That's one of the reasons why we are using J.D. Edwards. We really have to evaluate the full cost of the supply chain because not everything is cheaper to source from offshore."

Duncan says that offshore sourcing is attractive due to the cheap costs of buying in bulk as well as high volume, but not all of F. Schumacher's products fit this mentality.

"It becomes a balancing act," says Duncan. "It really makes the sourcing and procurement part a big challenge."

Viable Visibility

To ease its procurement pains, F. Schumacher went live with J.D. Edwards financial module and is in the final stages of go-live status with the other components. One of the most valuable benefits from the financial end, according to Duncan, is the integration of automated accounting instructions (AAIs).

"AAIs are going to put a high degree of confidence and credibility into our financials," says Duncan. "We're going to have a daily view of where we are at all times."

Under its old financial model, the company struggled through many different systems, which ultimately created a five to six week lag time in its ordering process due to poor visibility. The presence of AAIs now means that transactions dictate journal entries versus people manually classifying, coding and guessing the status of specific jobs.

"We're going to be able to close in days versus weeks," says Duncan. "We will also be able to make much better high-end purchasing decisions. We can now run a balance sheet and income statement the second, third or fourth day of the month if we want to."

Diminished Deductions

By streamlining its financial process, F. Schumacher has also stemmed deductions and improved service with its retail partners. Even though an EDI transaction program exists that allows companies to manage its accounts receivables electronically, Duncan says deductions were manually entered at F. Schumacher, prior to implementing the new system.

"If we get 15 to 20,000 remittances, we will get our money into our hands a lot quicker," says Duncan. "We are now able to get it in, process it and get it to deposit."

In addition to reducing deductions, F. Schumacher's compliance level dropped from 1.32 percent to .40, which Duncan credits to the flat-out enormity of the systems overhaul.

"We've spent so much time with the J.D. Edwards software and implemented so many process changes that now we've seen benefits," says Duncan. "We have a huge expectation of what is going to help us grow."

Obvious Choice

F. Schumacher tapped the services of Hitachi consultants to integrate J.D Edwards. Hitachi helped the company gather about 200, specific business scripts that focused on F. Schumacher's unique challenges. These scripts were given to vendors prior to their sales calls with F. Schumacher.

"The vendors were allowed to do their dog and pony show," says Duncan. "But we also gave them a block of time where they had to show us how they could meet these requirements. All of these things helped us make our decision."

Duncan says he chose J.D. Edwards because he wanted a flexible, best of breed software program with proven ability to condense a multitude of departments under one umbrella. Ultimately, Duncan wants to treat his business like a funnel, with the top of the funnel being labeled "All Things to All People." As the J.D. Edwards implementation pours down the funnel, all of the common practices and models become streamlined.

"We had multiple departments doing the exact same things for different products," says Duncan. "I had to be able to say an order is an order, a shipment is a shipment.'"

A CRM Future

Duncan says he wanted to go live with J.D. Edwards' CRM module "right out of the box" but due to the different set of processes involved with the CRM implementation, he decided to wait until the company determined its needs, measurements and impact plans. "You can't do CRM as a stand-alone and that's the way everyone tried to sell it," says Duncan. "If you want distribution to add new products and new labels, for instance, and make them a higher priority, it has to be integrated."

F. Schumacher has addressed deductions and forecasting issues with its major retailers using the J.D. Edwards financial tool and Duncan says the CRM module will bolster relations with the company's 30,000 self-employed sales reps and local retailers.

"One of the things we clearly want to be able to do is to provide to them, what they need, in very specific terms because each one may have a different type of market or different type of designer," says Duncan. "Once we start building profiles and models around each type, we can start targeting."

Ultimate Assistant

Instead of sending retailers 10,000 SKU's per year, F. Schumacher may only send the SKU's that apply to that customer's profile. By sending targeted information to its customers, F. Schumacher becomes the ultimate assistant, according to Duncan.

"Our customers are going to have a lot of other people's products and choices to choose from," says Duncan. "If they know they can log onto our customer self-service Web site, or call into our call center to not only get the answer to their question but the core products that accompany what they are looking for, all of a sudden we have increased our opportunity for upselling. We are looking to grow that market share with all of those customers but we definitely want to do it in an efficient way."