Brooklyn, New York-based Dynamic Marketing has a unique co-op business model: buy consumer electronics and appliances at wholesale prices, then sell them to a network of members who re-sell the merchandise to end consumers through their own storefronts. It�s a concept that helps Dynamic Marketing�s 80 members compete with other �big box� appliance and electronics retailers in New York, New Jersey and Connecticut.
Success for Dynamic Marketing and its members depends on the economies of scale that allow members to buy and sell at the lowest prices, as well as tight control on back-office costs. But working against this mission was Dynamic Marketing�s custom-built, outdated inventory control system, which used obsolete hardware and hindered optimum order processing.
Turning Up the Volume
Dynamic Marketing knew it needed a new system and had been discussing options for several years. But it wasn�t until late 1999, when the company faced yet another incident with its old system, that it seriously considered a replacement. As a growing co-op, Dynamic Marketing needed larger capacity and had been buying new, larger disk drives; however, the operating system it was using did not recognize the size of the new disks.
As a result, the operating system gave odd writing scripts that didn�t make sense. The system thought it had reached the �end of the world.� To fix the errors, the company would have had to purchase parts from new machines, but new incidents would continue to develop since the system was outdated.
Dynamic needed a system overhaul before one of these incidents became a major setback, but the convenience and satisfaction of members had to figure heavily into any new inventory system. Members interact with the system daily, so any changes had to be user-friendly and require minimal training. The company also had to prove to them that anything it acquired would be cost-effective.
With the help of consultants Deloitte & Touche, Dynamic Marketing�s 15-member team began the transformation with a careful needs analysis. First, the company looked at whether it wanted to build its own system versus buying an applications package. Knowing the time and resources involved with building a system, the decision was made to buy.
From there, Deloitte & Touche spent six weeks with the company helping to determine the requirements for a new software package. Deloitte recommended the company decide what it wanted and needed before speaking with the vendors. This model ensured that the software it purchased matched its specific objectives.
The company determined it needed software that was easy to use, could generate on-demand reports and queries and had Web-based functionality that could be easily deployed to its members throughout the tri-state area.
In early 2001, Deloitte & Touche compiled a list of 15 qualified vendors and sent out bids on behalf of Dynamic Marketing. Four companies returned with the appropriate functionality and price point. However, Lawson most closely met Dynamic Marketing�s technical requirements and price. Thee company was also most mature in terms of the Web-based products.
Time to Move Inventory
In May 2001, Dynamic Marketing purchased the Purchase Order, Procurement, Inventory Control, Warehouse and Order Entry components of the Lawson 8.0.2 Distribution suite and the Accounts Receivable and General Ledger modules of the Lawson 8.0.2 Financials suite, all to run on a Windows 2000 server platform.
Two months later, the hardware was in place, and training began that September. In November 2001, the company deter-mined it needed a consulting partner. After bids from two companies, it again chose Lawson, and implementation began in January 2002.
The company wanted to show an immediate benefit to its members, so Lawson consultants helped implement and deploy Order Entry so members could input orders directly via the Web. With Lawson, customers were the company�s order entry department. They place orders from their stores with very little interaction from Dynamic Marketing.
Online functionality also allows anywhere, anytime order status checks, a process that previously required a phone call to Dynamic Marketing offices. The company has also saved time, paper and postage by eliminating the monthly mailings to members that once contained copies of every invoice � packages that could sometimes number hundreds of pieces of paper. Now, using Lawson Distribution and Financials, the company can run and ship a two-page activity statement to its members each week.
Custom Orders Welcome
Using Lawson�s Development Environment for JavaScript, member interface was customized easily with appropriate menus, the company logo and product icons. Lawson also offers the opportunity to customize the front end to look like a custom application without changing the business application behind it. For example, Dynamic Marketing created a customized order entry screen for returns, one of the key functions of its business that was traditionally handled over the phone by Dynamic Marketing personnel. Members fill out a form, get a return authorization number and then see if their returns are approved. They can then browse the system to follow up on any credit issuance.
Streamlining the Distribution Process
In addition to automating order entry, Lawson Procurement, Purchase Order, Inventory Control and Warehousing also have helped streamline the distribution process. The system automatically updates receipts from purchases, helping replenish inventory more efficiently and shortening the billing cycle.
As a co-op, Dynamic Marketing has recurring invoices, billing and charges every week, so it uses Lawson Accounts Receivable to oversee its customer invoices and accounts receivable in one centralized system. The company does not yet generate financial reports from Lawson General Ledger. It uses the application to capture and track financial data and plans to begin using the General Ledger�s reporting function this summer.
System Goes Live
Dynamic Marketing went live with its internal staff May 1, 2002, and it will go live with customers on May 22, right before its busiest time of the year. June and July are peak months of air conditioning usage, and the 2002 season ended up being one of the company�s heaviest seasons ever. It was a big risk to implement the new system right at this peak time of year, but the company didn�t want to wait until fall. It was a true test of the Lawson system, and the system worked and proved itself very effective.
As Dynamic Marketing�s Corporate Controller, Jorge Joskowicz oversees the co-op�s accounting and data processing operations. He has been with Dynamic Marketing for more than 15 years. For more information, visit For more information on Lawson Software, visit