ERPNext Customer Story: Grupo Realize de Móveis
The article describes the actions that lead Grupo Realize de Móveis to make a monthly revenue of 1 million USD.
In portuguese, Móveis means furniture. If you don't pay attention to the spelling, you are very likely to confuse it with Movies-Hollywood. Grupo Realize de Móveis is a furniture company based in São Paulo, Brazil.
Grupo Realize started with 1 furniture store and 10 employees and now has grown to include 11 stores and 200 employees. It is interesting to note how they managed to make a monthly turnover of USD 1 million.
Mr Antonio Carlos Pavan and Mr Armando Pavan Filho started this company in 2008. At that time, the furniture market was a highly fragmented business. The supply-chain network was unpredictable. In such a scenario these businesses were not able to stick to their committed delivery dates. Such delays were the biggest generators of complaints, both official and unofficial. The official complaints lead to lawsuits and bad reputation for most furniture companies.
In this state of chaos, Grupo Realize decided to turn the system on its head. Instead of being bogged down by the lackadaisical delivery system, they used this trait to acquire customers and become more profitable. They offered 50% cash back if they did not deliver on the committed time, as a contract in compliance with the consumer protection code. By doing so, they have become a benchmark in the furniture industry. Last month they acquired 250 new customers.
How can such a scheme be viable?
The process of how they meet their promises without going bankrupt is worth noting. As a first step to ensure predictability, they make service level agreements with their suppliers and carriers to comply with their Just-In-Time strategy.
They execute an order in three stages:
- Confirm requirements with the customer.
- Purchase the raw-materials in time, once the requirement is final.
- Arrange and schedule transportation to deliver the product to the customer.
They have divided teams based on responsibilities:
- SAC System looks after Customer Service.
- Scheduling team manages deadlines.
- Conference team ensures the technical specifications of the product.
- Assembly team brings together raw materials to make finished goods.
- Operations team monitors and supports the above teams.
In Brazil, the market benchmark to deliver furniture orders is 70 days. Grupo Realize de Móveis delivers in 30 days.
Additionally, they keep a buffer of 15 days for trouble shooting. In these 15 days, any problem related to lack of specific goods, transport or delivery is solved. Their major challenge is to “douse the last-minute fire”. Orders with last-minute problems or shortage of stock at supplier’s end are responsible for most of the delays. Thus, in such problematic situations a separate study is undertaken. Various possible solutions are put forth. Sometimes a discussion takes place with the customer to re-align requirements. The solution is then evaluated with the help of cost benefit analysis. Only in complex cases, the operations team takes action to approve a charge out of scope, or negotiate with the customer if there is a possibility of a lawsuit.
Grupo Realize has used the weakest link of the market and created their own unique selling proposition. They have systematised their processes, established SLA’s and aligned various departments with their roles. Today they deal with products that cost $ 10,000.00 (USD) per order.
We sincerely thank their software developer, Maxwell Morais, who is single-handedly deploying ERPNext for their 11 stores.
Como o rei Pelé, que com seus pés fazem dos movimentos com a bola uma arte, assim é ERPNext, transformando as dificuldades e transtornos do dia-a-dia da gestão em uma tarefa simples, gratificante e acima de tudo produtiva.
As king Pelé, who with his legs, moved the ball so artistically and with ease, so does ERPNext–by transforming difficulties and disorders of day-to-day management into simple tasks, which are rewarding and above all productive.
Priya is a philosopher by education, writer and editor by profession and a loving mother by disposition.