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Interdyn BMI - Caribou Case Study
Caribou Coffee
Headquartered in Minneapolis, Minnesota, Caribou Coffee Company is the nation's second largest specialty coffee company with 2,800 employees and three facilities which roast, package and distribute 4 million pounds of coffee to over 200 company-owned stores. Caribou Coffee's stores have the look and feel of an Alaskan lodge, with knotty-pine cabinetry, a fireplace and soft seating. The company also sells its coffee, equipment and other goods via the Caribou Coffee Web site and select retail/grocery partners.
Business Needs
Looking for Accuracy and Control
Caribou Coffee Company cofounders John and Kim Puckett quickly grew the company after establishing the first coffee house in 1992. With this rapid growth, the company also began to experience some business pains, says Paul Turek, General Manager of Support Operations, at Caribou Coffee. “Orders received via phone, fax and the Web needed to be translated into disparate systems maintained by each supporting department,” he said. “Often critical information—timing, volume, costs, configurations—was lost due to the lack of integration between these processes.”
Other problems included:
• Poor vendor information
• No purchase order history
• Critical delivery details often fell between the cracks
• Inventory levels were kept artificially high to make sure there was product available
• Period-end closings required extensive time and resources to compile the incoming myriad of reports
• Invoice to purchase order reconciliation was time consuming due to the omission of details and item discrepancies
Business Answers
Microsoft Dynamics GP
Caribou Coffee worked with Microsoft Business Solutions reselling partner InterDyn Business Microvar to find a solution for these business pains. InterDyn Business Microvar, which took the time to learn Caribou Coffee’s business model and supply chain requirements, recommended Microsoft Dynamics GP specifically because of the capabilities offered in the areas of manufacturing, distribution and financials.
Benefits
Improved Processes
Sales Order Entry greatly improved order fulfillment accuracy—from 95% to 99.5%—because now order profiles are identical regardless of origin or destination and critical information remains intact. Improved order accuracy reduces time spent correcting errors and adds money to the bottom line.
In order to track vendor discounts and current pricing levels, Caribou Coffee utilizes the Purchase Order Processing module to provide a detailed order history which has raised the accuracy of delivery receipts from 89% to 98.7%. This again reduces the time Caribou Coffee employees need to spend making corrections in the systems and greatly improves the company’s vendor management processes.
The increased accuracy of sales and purchase orders also directly affects the speed and accuracy of financial statements and reports generated by Microsoft Business Solutions Financial Reporting. Now, Microsoft Dynamics GP captures financial activity in real time and, because of increased order accuracy, staffing time for the period-end closing and reporting process is down 33%.
Streamlined and Efficient
Microsoft Dynamics GP directly improved Caribou Coffee’s manufacturing and distribution processes, too. Now, bills of materials (BOM) show individual product component specifications so each BOM accurately reflects its requirements and costs. Employee labor and overhead costs are also applied directly to each BOM so each batch of coffee is accurately tracked in the system.
Previously, because of difficulty in maintaining an accurate count, inventory stocks were kept artificially high. Inventory is now expressed in real time at both the corporate warehouse and each store. This allows Caribou Coffee to match production more accurately to sales which increases efficiency and saves the company money. Specifically, this tracking has also allowed Caribou to reduce Work in Process (WIP) inventory by 90%.
By implementing Microsoft Dynamics GP, Caribou Coffee now has an efficient financial system that offers them greater accuracy and control over their ordering, manufacturing, distribution and financial processes.
Return on Investment
• Increased order fulfillment accuracy from 95% to 99.5%.
• Delivery receipt accuracy improved from 89% to 98.7%.
• Time spent on period-end closing and reporting reduced 33%.
• Administrative penalties and fees assessed reduced by 80%.
• The company now monitors real-time inventory volume and costs—WIP inventory fell 90%.
Established in 1985, InterDyn Business Microvar's mission is to enhance the lives of its employees and customers by working together to provide quality business solutions.
Industry Leading Products: We pride ourselves on representing and being a top partner with the leading software providers in the marketplace. These products include Microsoft Dynamics GP, Dynamics CRM, Dynamics AX, Microsoft Retail Management System, iMIS- Nonprofit Solution, and Open Systems.
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