Could It Really Be Rocket Science?

August 20, 2003 by admin

Now the owner of five Wonder Dollar stores located throughout the greater Atlanta area, with 5 administrative employees and $2 million in revenue, Luk exemplifies the “rags to riches” story that figures so prominently in entrepreneurial legends. Just replace “rags” with “trash bags,” and you have the beginning of the story.
Hired to market trash bags, Luk looked for potential distributors in an untapped niche –flea markets. He watched as visitors to one of Atlanta’s biggest flea markets struggled to haul away their loot. And soon he had one of the biggest booths in the business – selling trash bags. Once established, he took the time to study what was selling and who was buying – and the rest is retail history.
A PhD in physics doesn’t prepare you for stocking shelves, controlling inventory, meeting payroll, serving customers, or performing the 1001 other tasks that are so familiar to retail store owners. When the PIN (Post-it® note) system that he used to track inventory failed to keep the store shelves stocked and the spreadsheet tables couldn’t be pivoted any more, Luk knew that he needed help. “When I had one store, it was easy to know where everything was. With two stores, it got harder. And with my third store, I forgot everything.”
He asked his accountant, Leony Yap, an MBA student at Georgia State University, to find a business system that could manage his extensive inventory and provide the reports and analyses he needed. “I had to match our business needs with the price we could pay,” states Yap. “We didn’t want just a basic inventory system. We need to know where each item is and whether it’s moving. And we have to know if we’re making a profit on it.”
One of her MBA professors told her that SAP had released a product that addresses the needs of small and midsize businesses (SMBs), and she went to the SAP® Business One Web site to find out more. Upon contacting SAP, she was referred to one of SAP’s business partners, Practical Software Solutions Inc. in North Carolina.
As Bobby Fowler, president of Practical Software Solutions Inc., explains, “Working with small business owners like Luk is different. You’re more than a trusted advisor; you become part of the family.” Practical Software Solutions Inc. represents a number of packaged ERP solutions and targets its services to customers in the SMB space.
To get a better idea of Luk’s business needs and working environment, Fowler and his team visited several Wonder Dollar stores and the warehouse. “I’ve never seen anything like it. I don’t have to think about truckloads of paper towels or ceramic turtles, but Luk does. And he was managing the whole thing with spreadsheets and Post-it notes.”
After reviewing the challenges faced by Luk, Fowler recommended SAP Business One. Operating on a thin margin, Luk didn’t have a lot of money to spend on IT infrastructure and business management software. Fowler delivered the capabilities and services that Luk needed – warehouse management, financials, accounts payable, and reporting – within his budget. “SAP Business One is affordable. Everyone wants to own a Mercedes, but nobody wants to pay for it. When they know that you’ve got a Mercedes that they can afford – well, now you’re talking their language.” Yap agrees. “We were lucky. We got good software and good consultants.”
After the planned implementation, there will be five users of SAP Business One at the headquarters office. At this point, there is no real-time connection for the POS registers, so each night a batch program will upload data from each of the stores to the SAP Business One system.
As Yap explains, “Analysis is the most important thing for Mr. Luk. And I think the Drag&Relate feature is very cool. We don’t have to spend time creating reports because they’re already there.” Headquarters employees will rely on reports from SAP Business One to determine what products are moving and which ones are just taking up space. They can’t afford to buy a truckload of cell phone adapters and then not be able to move them. With reports from SAP Business One, they’ll be able to tell immediately what’s hot and what’s not.
What are the plans for the future? Now that the infrastructure and “nuts-and-bolts” system are in place, Luk and Yap have more time to think about ways to use the capabilities of SAP Business One. For example, by analyzing customer buying patterns via data collected from key cards, Luk can target mailings and promotions more precisely. And he can fine-tune the product selection in his stores. Buying patterns are notoriously sensitive to many factors: geography, weather, news reports, and consumer confidence, just to name a few. The velvet Elvis that flies off the shelves in a store on the east side of town may gather dust on the west side.
Yap is looking at the foreign trade and currency conversion capabilities to support importing. She explains: “Our margins are so tight. We need to expand the number of stores we have to take advantage of importing.” Luk is also thinking about franchising his system of retailing. He’ll support franchisees with his knowledge, his business processes, his business systems, and his purchasing power. Beyond that, who knows?
And, by the way, this really isn’t rocket science. SAP uses its business partners to deliver a reliable product that’s simple to implement and easy to use. It delivers real value to real people – and for Ka Kan Luk, that’s one dollar at a time.

Brenda Mackay

Brenda Mackay

Tags: , ,

Leave a Reply