A Microsoft Dynamics 365 for Operations backbone key to Hickory Farms’ growth plans

Someone who receives a Hickory Farms gift basket sees only a pleasing collection of summer sausages, hot mustards, jams, crackers, cheese, sometimes wine and fresh fruit.

But anyone in business-to-consumer (B2C) fulfillment recognizes the complexities: dozens of stock-keeping units (SKUs) from numerous vendors, local shipping for fresh goods, unfailing on-time delivery for holidays, anniversaries, and birthdays - the back-office and logistical demands go on.

Hickory Farms is migrating its complex operations to a Microsoft Dynamics for Operations backbone, and joined Microsoft in its booth at last week's National Retail Federation (NRF) "Big Show" in New York. There, they talked about simplifying their operations and positioning the company for growth, all using Dynamics 365.

As the company's Director of Information Technology Gordon Jaquay describes to MSDynamicsWorld, "We really needed to build, foundationally, a system to grow as a business. That was the primary reason to look for ERP." 

The company had explored NetSuite and Oracle as well, but "One of the reasons we landed on Dynamics 365 was that once we got into the details it was clear that Dynamics had the most functionality needed out-of-the-box, so we would do the least customization with that system. And we got into the details of the cloud power of Azure and knew it would be a good fit for our business in the type of peak season we encounter."

That underscores another unique requirement of Hickory Farms: a considerable portion of its income is between October through December, surrounding the holidays. Then, Hickory Farms opens more than 500 retail kiosks in malls across North America (it maintains no brick-and-mortar locations). Customers could walk away with what was on the shelves, but of course, kiosks offer a limited number of items that must be replenished often.

Alternatively, a customer may order that basket online, or through a call center for the company's catalog-and-phone-order business.

So the company sought to integrate its catalog and mail order, web, retail, and wholesale operations into a single platform in Dynamics 365 for Operations. And it sought a way to better fulfill orders from those kiosks, regardless of what was on site.

From siloed solutions to end-to-end visibility

In migrating to Dynamics 365, the company is replacing four systems: BPCS ERP from Infor; the Ecometry Commerce Suite for order management and fulfillment; a custom point-of-sale solution; and Snapfulfil for warehouse management.

"Each of those systems was siloed across business channels and the supply chain. We're looking to position our company for growth, and those wouldn't scale for growth."

Interestingly, Hickory Farms' discovery of Dynamics 365 was nearly a year ago, at the 2016 NRF show, when Jaquay approached the Microsoft booth. Dynamics 365 was but a demo version then (its predecessor, AX 2012 R3 was available), which RSM representatives put through its paces. Microsoft took a hands-on interest in Hickory Farms."They brought three partners to the table, and RSM had the strongest fit for our business in retail. So it came full circle," he says.

Configuration, implementation & inventory

This installation runs on the Dynamics 365 for Operations platform on Azure, thus completely cloud based.

The implementation will be two-fold. Phase One, which kicked off on August 15, 2016, includes all back-office and supply-chain functions as well as the direct and wholesale business channels. "We're scheduled to complete that in the second quarter, then the second phase is retail point-of-sale for our kiosk stores, scheduled to complete in October," says Jaquay. "So we'll have the entire system implemented and the entire company on the system for the 2017 holiday season."

Hickory Farms will implement the out-of-the-box Modern Point of Sale (MPOS) application built into the Dynamics 365 platform. "We like the fact that it is a responsive interface, so we can use practically any device we would like," says Jaquay. The company will likely use its current POS system alongside the mobile "linebusters," be they on tablets or hand-helds computers.

Plans are to use Dynamics 365's call center capabilities (within its Customer Service module) for its phone and catalog business. From that Jaquay expects "Increased visibility across all channels, and understanding what's available to sell in real-time," for example, what is in-stock at a third-party logistics provider (3PL).

But those kiosk clerks will have access the same inventory visibility. "One of the key functional components in choosing Dynamics 365 was the ability to expand our customer experience, specifically the ability of our associates at a retail kiosk to ship something from a warehouse on behalf of customers if we don't have the product on the shelf.

"They're no longer limited by the inventory at the kiosk," thus taking the limits off of kiosk sales.

Dynamics 365 for Operations will replace the majority of systems, says Jaquay, but "We do have a few ISV solutions added onto the system around EDI, and particularly EDI from Data Masons, as well as ProShip for partner fulfillment."

While wholesale and supplier transactions will be powered by Dynamics 365's Financials capabilities, the B2C web customer portal will run on Salesforce Commerce Cloud (formerly Demandware).

The omnichannel experience for customers and call centers

With the Dynamics 365 implementation, Jaquay expects to gain "a better cross-channel view of the customer, and which channels a customer is shifting their buy to, or [whether it is] a multi-channel customer," he says. Having all customer data in one place represents "another key driver in choosing to get a 360-degree view."

He expects as well a consolidated view of the analytics key to the company's performance, including (among others):

• Vendor-managed inventory
• Vendor performance
• Customer demographics
• Seasonal demands
• Sales performance per kiosk and per region

So the company is in effect shedding all of its limiters to growth, between Dynamics 365 for Operations' native functionality, plus a few well-integrated ISV solutions. With go-live planned for October of this year, just in time for peak season, Hickory Farms expects a record-setting 2017 holiday season, spurred by Dynamics.