For Hawaiian Tropic, being a David to the Goliaths of sun care products takes ingenuity, hard work and the power of a mySAP All-in-One solution. As the only privately owned international sun care brand manufacturer in a hot market, Hawaiian Tropic vies for shelf space with the products of industry giants, such as Schering-Plough’s Coppertone label and Playtex’s Banana Boat brand.
Hawaiian Tropic, also known as Tanning Research Laboratories (TRL) Inc., faces this heavy competition for its Hawaiian Tropic brand, as well as its private-label sun care products sold by major retailers, pharmacies and supermarkets.
To remain competitive, the Florida, US-based company knew it had to improve inventory management, production schedules and customer satisfaction. That’s why, two years ago, the 500-employee company chose a mySAP All-in-One solution from IDS Scheer SME, an SAP Business Partner and vertical solution reseller (VSR). ARIS SmartPath for Consumer Products/Cosmetics set them on the path to success.
“With ARIS SmartPath, we’ve improved our inventory turn by 26 percent over the last year,” says Steve Swanson, Vice President of Information Technology. “An integrated view of the business increases our visibility into inventory, production and financial activities, allowing us to make faster business assessments and respond swiftly and more personally to customer needs.”
The results are clear: Over the past two years, good business decisions and the mySAP All-in-One solution have helped the company outpace industry growth. In fact, Hawaiian Tropic grew its market share by 11 percent in 2003 alone.
Mergers and mayhem
Hawaiian Tropic’s efforts to improve efficiency began in 1999, after purchasing its primary distributor in Kentucky. The merger resulted in disparate systems between the two companies across all business operations and problems ensued. “Just getting an inventory report meant compiling information from two different systems, each with different nomenclature,” Swanson explains. “It was just a mess.”
Hawaiian Tropic’s own highly-customized legacy system was outdated and required repetitive data entry processes. With more than 125 product formulations and 400 different types of ingredients involved in manufacturing, human error was unavoidable. With no materials requirement planning (MRP) functionality, there was only limited control over inventory, which included 500 Hawaiian Tropic and 500 private-label SKUs, as well as about 7,000 different materials needed to make the 36 million sun care products the company sells annually.
By 2001, it was clear the company needed to integrate and optimize the supply chain management systems of both companies. “We had no visibility into inventory at our main distribution sites or in any sales offices that held inventory,” says Swanson. “An employee had to spend a full day to determine stock status. With so much capital tied up in inventory, we needed faster access to information to meet customer demands. As a seasonal business, timing is everything.”
A smooth transition
After reviewing many top-tier software vendors, Hawaiian Tropic chose the mySAP All-in-One solution from IDS Scheer (Plaut Sigma Solutions at the time). This fixed price and fixed timeline solution for the Consumer Products/Cosmetics industry would manage all aspects of a seasonal business – from production forecasting, after-season returns, shelf-life expiration, and quality control to unit management and billing.
“For a fixed price, we bought a complete, proven SAP solution that lowered implementation risks,” says Swanson. Decision makers also liked IDS Scheer’s big bang approach to implementation, which leveraged SAP’s rapid implementation methodologies. This model requires 30 percent less time and costs 40 percent less than traditional approaches.
With a highly seasonal business model and 80 percent of its sales occurring within a six-month period, Hawaiian Tropic executives didn’t want to wait, and didn’t. Within six months, the mySAP All-in-One solution was launched in the company’s main manufacturing facility and four sales and distribution locations.
Bill Jennings, Hawaiian Tropic’s executive vice president, confirms the benefits of quick deployment: “Companies our size don’t have the luxury of long, complicated implementations that require armies of consultants or internal staff. The prepackaged mySAP All-in-One solution offers all the functionality we need right out of the box to load the system quickly and successfully.”
Timing is everything
With two full years under their belts, Hawaiian Tropic talks openly about how the IDS solution makes life easier and business better. For example, Swanson says inventory managers can determine stock location in about 20 seconds and analyze the data in several different ways. “The information is there, it’s reliable, and it’s processed the same way each time, so we can make faster decisions,” he says. “Better inventory control frees up working capital, allowing the company to leverage that capital in other areas that advance the business.”
Quicker access to better information also gives Hawaiian Tropic a competitive advantage. “We have better control of and visibility into inventory. We’re building closer to forecast than ever before because the system takes our sales forecast, nets our on-hand inventory, tells us what to build, when to build it, and what to have available at certain times. Managers have information at their fingertips they never had before, so they can run the business instead of analyzing data all day.”
As an example, Swanson says a major retailer contacted the company about running a special promotion for the July 4th holiday. “By using mySAP All-in-One data, we were able to quickly identify four SKUs that were readily available to cover their promotion.. It turned out to be a very good deal for us. That’s one advantage to being a small to midsize business, our competitors aren’t as nimble as we are.”
Other benefits include closing the monthly books in 10 days, versus 45 days. The company also reduced accounting staff amidst a period of rapid growth, redeploying them to support other key areas of the business.
A sunny forecast
European users also tap into the system now to view product availability. Handheld devices also tie into the solution to streamline inventory and shipping processes. Further, the company leverages the software’s profitability analysis features, as well as IDS Scheer’s help desk services.
Hawaiian Tropic’s experience with SAP and SAP Business Partner IDS Scheer has been overwhelmingly positive. “SAP’s track record and commitment to the SMB market convinced us that mySAP All-in-One was the right solution for us,” says Swanson.
“IDS Scheer deals with SMBs all the time and really understood our needs and business processes from order to shipment,” he continues. “Their close work with us throughout the implementation process is really paying dividends now. Our internal team has the knowledge needed to fully leverage the functionality of the solution. The IDS Scheer team was a perfect fit for us.”