Supporting Rapid Growth and Real Time Inventory with Microsoft Dynamics

Mattress Firm, a major mattress retailer in the United States, grew quickly, both organically and after several acquisitions. The company’s continued rapid growth strategy exposed a decentralized IT infrastructure that was labor intensive, difficult to manage, and not scalable. Recognizing the shortcomings of its legacy IT solutions, Mattress Firm implemented a new system in partnership with Microsoft Services that provided them with a scalable solution built to meet the needs of the future business.

“With our old system it would take anywhere from three weeks to a month to train a new associate, but it really took a year to two years to really master that system if you ever did at all. With this new system we can actually train a new hire in one day.”

Situation
Founded in 1986, Mattress Firm is the largest independent multi-brand mattress specialty retailer in the United States and one of the most successful specialty bedding companies in the world. With over 1,000 stores and 40 distribution centers across the US, Mattress Firm has grown significantly over the past 10 years, and continues to expand with the addition of acquired, corporate owned and franchise-owned stores.

Before 2013, the legacy ERP system used by Mattress Firm was becoming dated and had many technical limitations that could not keep up with the rapid growth of the company. As Chief Strategy Officer, Steve Fendrich, looked down a path of continued growth, estimating the possibility of well over 2,500 stores just inside the borders of the United States, he and his team decided to investigate other options.

In order to clearly identify all of the pain points from the current system and the features, functionality and requirements that would be needed by each department, Mattress Firm involved a cross-functional group within the corporate office.

“We were looking for something that could meet our existing business requirements and operate our business as is. We also wanted to make sure we were future-proofing ourselves against new technologies, new business processes, maybe even new business going forward,” said Tony Miller, Vice President of Enterprise Systems, Mattress Firm.

The team at Mattress Firm identified the following requirements that would need to be met with the new technology:

1. A robust retail management solution, capable of scaling rapidly with the business, and evolving with the company.

2. Accurate transactional and reporting data across stores and distribution centers.

3. A solution that could be easily integrated into existing solutions while being intuitive and not requiring a significant investment in training.

With a very tailored and detailed list of requirements, Mattress Firm then solicited several technology providers to participate in an RFP process.

In spring 2011, after evaluating several business applications and technology options, Mattress Firm determined that Microsoft Dynamics for Retail was the solution that best met their requirements. Furthermore, with Microsoft Services leading the project they knew they had the resources and capabilities needed to do the required development and implementation work. The combination of Microsoft Dynamics for Retail and Microsoft Services also assured Mattress Firm that the solution was agile and flexible enough to adapt to Mattress Firm’s complex business and provide the best time to value.

Solution
Microsoft Services used their proven methodology and best practices in envisioning, architecting, delivering and supporting a new retail solution so that Mattress Firm could realize their full potential for success.

Prior to development, Microsoft Services began by asking questions to get a thorough understanding of Mattress Firm’s business requirements and pain points. Combining a strong understanding of the business with solutions expertise and Dynamics solution product knowledge, Microsoft Services provided recommendations to improve Mattress Firm’s organizational agility through mission critical business solutions.

“They seemed to have a good grasp of our business and of how Microsoft Dynamics for Retail could be customized to how we operate. They were able to get in here, spend time in or stores, in our warehouses, with our finance people, and with our accounting people to figure out how we do business so that we could actually tailor the solution to the ultimate end-user,” said Fendrich.

In exploring the benefits of Microsoft Dynamics for Retail and how it could be used most effectively to meet the very specific and unique needs of Mattress Firm, Microsoft Services collaborated with IT personnel from Mattress Firm to design the new solution that met all of their requirements. They employed experienced architects who provided strategic guidance to help bridge the gap between the business and IT. By replacing its legacy system with the new IT solution built on Microsoft Dynamics for Retail, Microsoft Services helped Mattress Firm eliminate extra manual steps in several business areas. For example, in the stores Mattress Firm was able to integrate credit card processing and point of sales using the solution, increasing the efficiency of their returns and refunds process.

To ensure that the new solution could support the unique requirements of employees across all departments, Microsoft Services deployed rigorous system integration testing including user acceptance and test scenarios. The new platform was introduced in several small markets in order to test and gather feedback that could be used to further improve the product’s functionality for their distinct purposes.

By providing hands on, personalized on-site service, and availability to respond to questions and attend meetings, the Microsoft Services team was able to meet the shifting needs of Mattress Firm throughout the process, while also setting clear expectations for management. Investing time up-front in planning and preparation, was critical to the success of the program and meant that Microsoft Services was able to establish a high level of trust with Mattress Firm, by working closely with the Business Managers and IT staff during design as well as roll-out; and by working alongside them to ensure employee buy-in along the way.

The new solution includes a fully integrated retail solution, capable of scaling rapidly with the business, and with structure that did not exist with the legacy system. The solution will also enable Mattress Firm to provide a highly differentiated customer experience in stores across the nation.

Benefits
As trusted advisors, the Microsoft Services team invested in understanding the Mattress Firm business, industry, and unique needs in order to do what was needed to create business advantages through technology. Facilitated Scalability and Agility.

Mattress Firm’s new solution can easily and affordably be scaled with growth, which is very important, given the projected expansion of the company. One centralized system and fewer applications means that less effort is required for updates. Centralized administrative tools also facilitate IT efficiency and consistency and give them the flexibility to easily modify the systems to meet challenging business requirements when needed. Collaborative Process Met Unique Business Needs.

The Microsoft Services team collaborated with IT personnel from Mattress Firm to design the new solution to ensure that the company got the most business value for their investment.

Fendrich described working with the Microsoft Services team as a “very engaging experience for us where we spent a significant amount of time with them, digging into how we operate our business and how we could best tailor this solution to our business.”

The availability of the Microsoft Services team was a great benefit to Mattress Firm throughout the entire process. They were on call to describe to the team at Mattress Firm what was happening and what they needed to do, answer any questions, and ultimately help them to understand the solution customizations.

“I found myself leaning on our Microsoft consultants a lot asking about previous retailers that they’d worked for. Sometimes we don’t have the answer or we are trying to create a new process, and they had a plethora of information because they’ve worked with so many retailers across the board,” said Tanya Brandewie, Process Improvement Analyst, Mattress Firm.

Mattress Firm looks forward to further benefiting from the close relationship developed with Microsoft Services in terms of making use of new functionality included in future versions of Microsoft Dynamics for Retail that could be helpful for their retail segment down the road.

Reduced Training Time
Microsoft Dynamics for Retail has a very intuitive, user-friendly and familiar interface, which allowed employees at corporate, and in the regions across the country to get up to speed and be productive quickly, once the new software was rolled out.

“With our old system it would take anywhere from three weeks to a month to train a new associate, but it really took a year to two years to really master that system if you ever did at all. With this new system we can actually train a new hire in one day,” said Brandewie.

Because the software actually identifies and notifies the user of where an error is occurring and how it can be fixed, there are also fewer calls to the help desk and to the operations teams in market. The day-to-day processes have also gotten easier, reducing the burden of market trainers and DMs to manage the system on an ongoing basis.

Increased Productivity and Efficiency
Today, Mattress Firm is able to operate the business more efficiently and effectively through the 40 distribution centers and should be able to actually reduce the amount of inventory while turning product even quicker. The new system even allows them to allocate orders for customers that are already on trucks coming in, rather than on the floor of a warehouse.

As the company has plans to continue to expand its business, Microsoft Dynamics for Retail provides improved capacity to manage store operations, automating what were previously manual tasks in many instances.

Improved Customer Service
With Microsoft Dynamics for Retail in place, Mattress Firm customer service has greatly improved.

“We think we can do more business with our customers at a faster pace and when more people walk into our stores; we can service more customers than we would have been able to before, and service them better. These are the type of things that are really immeasurable that we couldn’t put into an ROI equation, but they’re there and they’re real,” said Fendrich.

Customer Size: Large Organization
Industry: Consumer Goods
Country or Region: United States
Solutions:
  • Microsoft Dynamics AX 2012
  • Microsoft Consulting Services
Organization Profile:

Mattress Firm is an American mattress retailer founded in 1986 and based in Houston, Texas. It operates over 1,000 stores in 45+ markets nationwide, carrying top mattress brands such as Sealy, Tempur-Pedic, Simmons and more.

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