Mann Lake has come a long way from selling beekeeping supplies out of a garage in the 1980s.
In 2018, the Minnesota-based manufacturer and retail distributor partnered with a private equity firm. Shortly after, it bought a new distribution center and acquired three businesses, one of which served as a foray into a new industry: poultry supplies and live birds.
Adding goat supplies into its mix this year, Mann Lake aims to become a “one-stop shop for everything hobby farming-related.” But labor-intensive tasks on its old business system, Adagio Accounting, held it back.
Painfully Slow Processes Impact Performance
The Adagio system required a few workflows that were especially “painful,” said CFO Shana Rowlette.
Drop shipping: With the acquisition of the poultry business, Mann Lake began drop-shipping birds from hatcheries in a process that required receiving purchase orders, creating sales orders and billing customers by hand. The manual work became labor-intensive as orders mounted. For example, when a hatchery emailed an update that 20 orders had been shipped, the team had to sift through a four-drawer file cabinet containing hundreds of open orders to find those 20 orders and finish processing them.
Bank reconciliations: It took one or two team members a full day, every day, to download statements and reconcile accounts in a spreadsheet.
Financial reporting: The team was often up to 10 days behind on invoicing during its peak sales season, and its old accounting system delivered financial information with a 24-hour lag. So, financial reports were outdated and of limited use.
Managing inventory: Mann Lake found itself with frequent overstocks because its overburdened teams either made demand plans in a spreadsheet or didn’t plan at all. They often ended up ordering the maximum amount of inventory, tying up cash that could’ve been invested elsewhere.
Manual Work Affects Employee Morale
With demand for Mann Lake products rising, Rowlette sought a better business system. The cumbersome workflows not only hindered growth at Mann Lake’s new poultry business but also prevented expansion into other product categories and eroded employee morale.
“The team was putting in so much overtime, mainly doing all these manual processes, that they were getting burnt out,” Rowlette said. “And everyone was thinking, ‘If we don’t speed these processes up, how will we be able to go back into acquisition mode? We have acquisitions that we're looking at, but we can't do them until we fix these processes.’”
The nationwide labor crunch applied pressure, too. Mann Lake has some 65 job openings in its Minnesota town of 300 people, and at all its facilities, it finds itself competing with remote jobs. Leadership “needed to figure out how to do more with less and automate whatever we could,” Rowlette said.
With more acquisitions planned, Mann Lake chose NetSuite.
“One of the top reasons we went with NetSuite was to invest money in a system that will continue to grow with us, looking 10-plus years out,” Rowlette said.
NetSuite Automates Order Management, Invoicing, Bank Reconciliation and Reporting
Upon implementing NetSuite ERP(opens in new tab), improvements came quickly.
Mann Lake now uses NetSuite to automate order management(opens in new tab) processes when drop shipping poultry from hatcheries. For example, when the team enters a sales order, the system automatically generates a PO. And when the hatchery sends a tracking number or shipping acknowledgement, the team imports it into NetSuite and the system bills the customer, receives the invoice and pays the vendor. The four-drawer file cabinet is gone, and customers get order tracking information, invoices, sales order confirmations and statements more quickly. The process that used to require four people now takes just one.
With NetSuite’s accounts receivable automation(opens in new tab), as soon as an order is fulfilled, the system processes the invoice and charges the customer’s credit card. Amid the 2020 boom in beekeeping popularity, Mann Lake had 23 team members processing customer invoices during its core sales season. Now, it takes about two.
The team uses NetSuite’s bank reconciliation functionality(opens in new tab) to monitor some 11 checking accounts: They simply import statements and auto-match bank transactions with those in the NetSuite general ledger. It now takes one person half a day.
Mann Lake uses NetSuite financial reporting(opens in new tab) to generate a daily gross profit report covering its 35 product lines. Managers might use the report to set sales objectives or, for example, launch a sale on any overstocked inventory.
With Productivity and Efficiency Gains, Resources Shifted to Strategic Roles
Relieved of time-consuming finance and inventory tasks, many team members are now contributing to the business in other ways.
Those three employees who previously spent all day processing bird orders now talk to customers, advising them on Mann Lake’s array of chickens, turkeys, guinea fowl and more.
Those individuals “have huge product knowledge, but we had to take them off the phones and selling to push paperwork,” Rowlette said. “Getting their knowledge back on the phone was big for the business.”
With NetSuite, sales staff now easily pull up customer dashboards showing historical spend and most-purchased items for each customer. Perhaps the commercial beekeeper on the phone bought a basket-style honey extractor at this time last year, so the salesperson can suggest that item instead of a radial-style extractor. Customer-specific information previously lived in spreadsheets, which staff didn’t have time to dig through while on the phone.
And when entering orders, team members can now see inventory on-hand by location in real time in NetSuite. This lets them know, for example, that the California warehouse doesn’t have basket-style extractors on hand. Previously, a California counterpart would have to flag the issue later.
Meanwhile, those 20 or so team members who previously processed customer invoices now analyze Mann Lake’s operations, suggesting strategic changes that grow the bottom line and better serve customers. This includes:
- Looking at costing trends. The team might flag a rising raw materials cost, then gauge whether it was a production error or a true increase and decide whether to raise prices on its products.
- Analyzing inventory on-hand to ensure the right product is in the right location at the right time, which has cut down on backorders.
- Staying on top of receivables to keep customers paying on time.
Progress Prompts Product Development
Mann Lake is continuing to evaluate its inventory management: Rowlette wants to better understand demand for items by location and season so teams can order more efficiently. In the near future, NetSuite might reveal that the Pennsylvania distribution center needs a precise volume of hive kits for springtime, and that those kits ship from an international vendor which requires ordering six months in advance. The team can then place an order for the right amount of inventory – not too much – with the right lead time.
With less cash tied up in inventory, Mann Lake plans to invest in new product development and improved manufacturing equipment. It will also invest in employee engagement, a major initiative for the company. Plans include full compensation reviews, analyzing available benefits, hosting team parties and implementing bonus structures in every department to motivate individuals who want to go above and beyond.
Rowlette also plans to use detailed financial analysis to determine which product lines are gaining and losing margin, as well as analyze expenses to identify opportunities to save. NetSuite’s visual KPI and trends graphs will be critical here, she said.
NetSuite SuiteAnalytics reporting and dashboards(opens in new tab) display your critical KPIs in an easily digestible format.
“Instead of numbers on a spreadsheet, a visual graph in NetSuite puts the data right in your face,” she said. “I can show my manufacturing staff, ‘Here's why I need you to produce this volume; look where it’s going to take us.’ I can show everyone in the company where we're going.”
Finally, on its path to become a “one-stop shop for everything hobby farming-related,” Mann Lake will start acquisitions again in the near future. And you’d bee-ter believe its business system can keep up.
Listen to the NetSuite Podcast where Mann Lake CFO Shana Rowlette explains her backstory (16:52) and her history with Mann Lake (20:10).