Chicago-based Dutch Farms distributes a private-label line of dairy products and eggs along with a range of refrigerated and frozen foods. With yearly revenues around $250 million, the company’s history has been one of ongoing growth and adaption to meet the needs of the dynamic, highly competitive food market. In 2000, for example, the company moved from a 50,000 square-foot location to one with more than 110,000 square feet of refrigerated and freezer warehouse space. Dutch Farms now markets approximately 2,400 items and operates a fleet of refrigerated trucks.
Addressing the evolving distribution requirements of mega retailers required Dutch Farms to better understand what its customers were buying and then purchasing according to those trends. In order to keep up with growth and maintain a competitive edge, the company needed a modern solution to replace its aging, Unix-based enterprise resource planning (ERP) system that lacked integrated capabilities and offered limited control over operations.
“We knew the Unix-based system was going to soon be extinct, so we needed a new ERP package,” says Jay Earnshaw, General Operations Manager of Dutch Farms. “We wanted to find a solution that would offer us a full range of functionality, was fully integrated, and would let us evolve right alongside the continual changes in technology and needs of our customers.”
With the help of Microsoft Gold Certified Partner Solution Systems, Dutch Farms implemented Microsoft Dynamics NAV for its new ERP system after carefully evaluating solutions from Oracle, SAP, HighJump Software and others. Microsoft Dynamics NAV supports Dutch Farms’ end-to-end business processes for financial management, including accounts payable, accounts receivable and general ledger; sales and marketing; inventory management; and purchasing.
Since initially deploying in 2004, the company has upgraded its ERP solution to improve performance with a Microsoft SQL Server database. Dutch Farms currently uses Microsoft Dynamics NAV as part of a comprehensive food distribution solution that integrates with three add-ons: Lanham EDI for managing electronic data interchange (EDI) transactions, TradePoint to provide e-commerce capabilities to its customers, and Jet Reports for ad-hoc reporting and advanced analysis. The solution also includes two unique food distribution customizations:
- A market-pricing structure, which enables Dutch Farms to input the week’s prices for products, such as eggs, and set up different market categories. Dutch Farms uses this information to better control pricing and, consequently, its margins across the supply chain.
- Catch weights functionality, which enables Dutch Farms to allocate a price per pound to a purchase order or sales order that contains multiple, similar items of varying weights.
Because its ERP solution is based on Microsoft technology and works a lot like Microsoft Excel, Microsoft Dynamics NAV has been relatively easy for employees to adopt. With all information in one place, Dutch Farms staff can view key performance indicators and a wide range of reports. By exporting to Excel or using Jet Reports, Dutch Farms staff can further analyze information from the system.
Since deploying Microsoft Dynamics NAV, Dutch Farms has grown 25 percent and acquired five small distribution operations. Earnshaw says, “We now have the means to forge ahead as an independent, midsize distributor in the extremely competitive, thin-margin perishable-goods industry. We are able to understand what we have done as a business and what we are currently doing, and make a strong run into the future.”
Improve insight and control over operations
“The return-on-investment of Microsoft Dynamics NAV has actually come in our ability to now have visibility and control over all areas of the business,” says Earnshaw. “As we have grown and acquired more businesses, we have enabled those businesses to use the ERP system so that we can perform tasks from inventory management and purchasing to pricing centrally. What’s great is that I don’t have to be at our Detroit operation, for example, to know what’s going on there.”
Maintain Profit Margins, Control Overhead, Drive Productivity
“Because we can see into our business and control it, we can control our margins on our products, which enables us to maintain our profitability,” says Earnshaw. Comprehensive capabilities in a single system have also meant productivity improvements. In fact, Earnshaw estimates that individual productivity has increased on average by 12 percent. “With Microsoft Dynamics NAV, we haven’t had to hire anyone in our office in the last six years to help with managing a business that has grown 25 percent; we can simply keep up with it.”
Streamline Supply Chain Management
“Since deployment, the biggest impact on our business has been supply chain visibility,” says Earnshaw. “We can see where the product is, when it will arrive, when it’s due, and then, in a calculated way, decide how to best manage the supply chain so that we can meet the needs of our customers. In the perishable-food business, timeliness is everything; by using Microsoft Dynamics NAV, we can provide the next-day delivery that is so critical to our customers.”
Improve Competitive Edge
Even with its growth, the company has maintained a competitive edge. Earnshaw says, “We’re striving to become a major player with the chain operations that need a regional supplier. And with Microsoft Dynamics NAV in place, we can do that because we can meet all their system requirements, such as EDI. And because of the flexibility of the solution, we can keep up with any other requirements they set for their distributors.”
For more information about Microsoft Dynamics, go to www.microsoft.com/dynamics.