The Beauty of Efficiency

Feature Article | June 27, 2007 by SAP News

Guerlain has been at the forefront of the perfume and cosmetics industry for more than 170 years. Their flagship perfume, Shalimar, released in 1925, represents the pinnacle of perfumery. Its subtle hint of lemon and strong vanilla overtones has driven the perception of beauty, luxury, and elegance from a small street in Paris to boutiques across the world. While Guerlain spokes model and two-time Academy award-winning actor Hillary Swank sells the image of Guerlain on the silver screen and the red carpet, behind the glamour are warehouses, databases, and forklifts.
Guerlain’s perfumes and cosmetics touch the hands of farmers, chemists, dockhands, truck drivers and warehouse personnel before they adorn the necks of women from Vancouver to Montreal, where Guerlain-Canada distributes products for Canada. But while seduction, beauty, and sophistication have created demand for the $10 million company, these attributes don’t actually move a product from one location to the next. That’s where SAP Business One comes in.

A little DOS will UN-DO you

Guerlain-Canada was struggling with a 14-year old IT system that had reached its limits. Revamping the infrastructure fell into the hands of Raphael May, Operations Director for Guerlain-Canada. May is a stickler for efficiency and believes having good staff is not enough. “You need to have an effective ERP solution to help employees work more efficiently,” he says.
The company was running a DOS based system, which required duplication at almost every turn. While soft lighting and gorgeous women filled the boutiques, the Point of Sale (POS) solution couldn’t talk shop with the ERP. This lack of integration required re-invoicing every transaction at the end of the month, thereby feeding the antiquated ERP with the proper data. May’s troubles didn’t end there. The reporting module of the old system lacked additional fields, making detailed reports an arduous process. The constant maintenance of the system was another giant hurdle. Often, May’s team hired support from a neighboring U.S. company.
“It was not very easy to have remote support all the time. It got very expensive. Whenever we had to retrieve information from the system, our options were to pay for support or use our Finance Director, who was the only one in house who knew how to deal with the application and retrieve information. If we needed a report, he would have to go into the system and write two lines of code,” says May. Doing everything twice was getting old at Guerlain-Canada, and by September 2005, it was time for a change.

Searching for an ERP complementing the beauty of the products

Choosing a replacement ERP was something May pushed to all the way to Guerlain’s corporate offices in Paris. It was something he wanted to do right and right the first time. He knew the efficiencies gained by implementing a new ERP would produce fantastic results for Guerlain-Canada; all he had to do was find a solution that was robust enough to fit his needs and fall within his budget. While Jicky, a perfume introduced in 1889, is said to be named after a girl who broke the heart of Aime Guerlain, the decision to search for an ERP was initiated with the mother Guerlain-Paris’s approval.
Just as there is a scent of perfume and shade of blush for every woman, there is an ERP that complements the beauty and imperfections of every organization. Before requesting RFPs, May and his team made a list of must-haves and nice-to-haves. For example, a new ERP had to co-ordinate with the warehouse and point-of-sale solutions, as well as automate no-added-value tasks such as data entry and invoice generation. May’s team needed dramatic improvements in the area of reporting, and overall business processes needed to be reorganized from the bottom up. But the lingering sore spot, left over from their legacy system, was affordable, reliable support. Fortunately, there was a lot of trust between May and their implementation partner, Implanciel. “We knew they would propose the right solution for us and not just the best solution for them,” May says.
In the end, only two ERP solutions were left standing – SAP Business One and ACCPAC – both of which Implanciel was certified to implement and support. Even though ACCPAC was well established in Canada and SAP Business One was just beginning to make a mark in the area, a visit to a SAP Business One customer in Quebec City sealed the deal for May and his team.

Better support – more savings

Though price and support were the negotiating factors, deliberation didn’t take long. “The decision was pretty quick. It took about a month,” May says. SAP Business One solved all of Guerlain-Canada’s problems for less money than ACCPAC, and because SAP Business One was a new product, May knew SAP Canada and his implementation partner would provide superior support and upgrades in order to promote the success of the product. May says he was very happy with the selection of SAP Business One. “The pricing of ACCPAC is modular and if you add up all the modules you need, it is quite expensive. With SAP Business One, it comes in one solution,” he says.
Although Guerlain-Canada’s go-live was scheduled at the tip of the busy holiday season in September, it went off without a hitch. The training from Implanciel, combined with SAP Business One’s ease of use, made the transition to the new system seamless. “SAP Business One is so user-friendly; it went very, very well,” May says. Administrative personnel found the program straightforward and immediately fell in love with the query wizard and reporting functions. Through the use of handhelds, the warehouse system and SAP Business One are now fully integrated – no more paper picking of orders and pen marks through completed items. “Within two minutes they were able to pick orders, and that was amazing considering it was a complete change from their everyday job,” May says.

The marriage of ongoing growth

Even though May and his team had high expectations for SAP Business One, they saw immediate ROI indicators. With their former solution, the time it took from an order to be pulled and shipped took five working days. With the implementation of SAP Business One, that timetable was reduced to two working days. That’s beautiful fragrances in the world three days faster instead of scented boxes sitting on a warehouse shelf.
As soon as Guerlain-Canada completed their Business One implementation, they built on top of the flexibility of SAP Business One with an application called Express-O. This solution enables customers to see current inventory in the warehouse and order what is actually available. May says the ability for the stores to order effectively online has revolutionized their operations. “We are now able to tell the customer right away from the salesperson’s laptop what is available and what isn’t. Let’s say a store has an open-to-buy of $20,000 dollars for Guerlain,” says May. “We want to make sure that the store spends that $20,000 on goods we do have in stock. We don’t want them to waste their money on goods we don’t have.”
Next on May’s list is to integrate Guerlain-Canada’s SAP Business One database with the SAP R/3 database at Guerlain-Paris headquarters. This will enable Guerlain-Canada to tap in to the item database at the corporate headquarters, automatically updating May’s database with new products as well as discontinued items. This integration will also enable the Paris office to pull reports directly from Guerlain-Canada’s database, leaving May’s team more time to drive productivity instead of producing reports.

Ian Alexander

Ian Alexander

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