J.D. Irving, Limited’s Kent Building Supplies constructs modern retail experiences with Dynamics 365

Kent Building Supplies (Kent) is a J.D. Irving, Limited brand and a Canadian home improvement chain with 48 retail locations. In 2019, the company embarked on a journey to transform its business and focus on growth in the direct-to-consumer channel. With the help of Dynamics 365, Kent successfully modernized its technology, streamlining its business processes, basing decisions on real-time analytics and data, and providing more intuitive, user-friendly systems that improve the experience for customers, employees, wholesalers, retailers, and partners.

Kent customers fall into two categories. The first is retail customers shopping online and in-store for supplies for home improvement projects. The second category is contractors working on larger-scale construction projects—and that’s where Kent’s extraordinary transformation shines. For example, how does a contractor on a new apartment building manage all the moving pieces, from ordering lumber, fasteners, flooring, paint, and fixtures to making sure the materials are on-site when needed?

With Dynamics 365, Kent can pull all the pieces together and do it in a more intuitive way. Kent carefully plans out construction projects with its customers, breaking down complex bills-of-material into phased deliveries. Continuous communication keeps the team up to date on progress at the building site, ensuring that materials arrive just when they’re needed to keep the build going. 

“Kent Building Supplies was looking for a modern ERP solution to enable additional agility and the ability to continue to grow. Microsoft Dynamics 365 has delivered on these capabilities and is foundational to our digital transformation,” says Brad Zacharias, Vice President, Information Technology, J.D. Irving, Limited. Today, Kent runs a nearly full suite of Dynamics 365 in the cloud: Finance; Supply Chain Management, including warehouse management with mobile experience; Project Operations; and Commerce. The company decided to continue using their e-commerce solution, Adobe Cloud Commerce (ACC), but wanted to add near-real–time data to share inventory availability and purchases (online and in-store) to take advantage of a single pool of inventory across buying channels. Kent’s Dynamics 365 solution integrates with ACC, allowing for visibility across sales channels.

In need of a new design

Before Dynamics 365, Kent had a 35-year-old homegrown system that caused significant pain to the business in four key areas: 

Maintenance risks. Because the system was aged, homegrown, and heavily customized to bespoke business processes, it was challenging to maintain. Worse, there was a significant risk in the company’s ability to keep it running. Employees who knew the system were nearing retirement, and soon there would be no one with the skills to fix or update it.

Antiquated POS. The point-of-sale (POS) experience for in-store customers was antiquated. Instead of a true POS, the company used more of an order management solution at the point of sale. Because it lacked visuals and other capabilities, it was nearly impossible for customers to understand what they were looking at.

Manual processes. The company relied on a lot of inefficient and redundant manual processes, causing excess work and often resulting in inaccuracies.

Lack of usable data. Data was limited, siloed, and hard to extract, making it difficult to derive actionable insights. 

The right tools

Kent knew that it wanted modern technology that was intuitive to use and sustainable to maintain. The company set out on a digital transformation with the following goals:

Streamlined business processes: Eliminate or improve manual, clunky, and cumbersome business processes.

Real-time analytics and data: Move from overnight report generation and analytics based on yesterday’s transactions to near-real–time reporting, insights, and analytics to enable management by exception and drive timely decision-making.

Modern interface: Make every interaction more intuitive and user-friendly with a mobile POS for on-the-spot checkout.

Modern connectors and systems agility: Create business agility to swiftly adapt to new business models, connect to new systems and platforms to bring on new customers, and explore new ways of digital selling.

After a rigorous evaluation, Kent chose Dynamics 365. It offered a fresh, cloud-first solution that was the best fit for Kent’s business needs.

Building a strong foundation for the future

This was the largest IT project that Kent had ever undertaken. The company decided to roll out Dynamics 365 in phases, starting with Finance in all locations. Supply Chain Management and Project Operations followed, then a controlled rollout of Dynamics 365 Commerce to all stores. The entire project took place over two years, workload by workload, starting with the most critical foundational need, Finance.

Such a large transformation would have been complex under ordinary circumstances, but the team also had to contend with a global pandemic during the retail rollout. With lockdowns and travel restrictions, many employees were working remotely. Some projects were put on hold, others were cancelled. The Dynamics 365 project continued.

Deploying an organization-wide system change wasn’t the only challenge the organization faced during the pandemic. Sales went through the roof because everyone at home started doing home improvement projects. There were supply chain and logistics issues and inventory challenges.

The team rose to the test. Collaborating from their home bases using Microsoft Teams, they worked through implementation intricacies and a complicated rollout. Dynamics 365 went live just in time. As sales skyrocketed and the business grew, the new platform enabled unprecedented growth.

Quality construction from start to finish

Today, Dynamics 365 runs day-to-day operations at Kent, with more than 4,000 back-office users at 65 locations, with 384 active POS devices and 500 POS associates. 

Kent recently added B2B e-commerce support to its Dynamics 365 solution. Pricing is extremely complex, with wholesale prices different from retail and each contractor negotiating prices by SKU, project, or volume. With headless commerce, the new B2B e-commerce solution extends Dynamics 365 accounts receivable, pricing, inventory, and loyalty capabilities to ACC. At the same time, the company launched a new website with individual pricing by SKU for contractors. The new site significantly reduces the burden of managing pricing based on individual contracts negotiated with each contractor.

On top of that, supply chain disruptions and shocks have made commodity pricing extraordinarily volatile in recent years. The traditional model of sending employees around the store to update stickers and printed price tags is not cost-efficient and is time-consuming. In today’s world, prices—even for standard retail pricing in-store—need to be adjusted regularly. Kent has started switching to innovative digital price tags. Thanks to Dynamics 365, the company can maintain prices centrally and easily update them across its stores as commodity prices fluctuate.

Kent runs on a solid Microsoft stack, including Azure, Power Platform, and Dynamics 365, with integrations to several other key systems. Some of the noteworthy elements of the solution architecture include: Commerce scale unit used for store operations, headless commerce used for the integration of Adobe Cloud Commerce, mobile apps for receiving in the back of the stores, and the full transformation into a Microsoft-based reporting stack.

Dynamics 365 gets the job done

“Moving to the cloud with Dynamics 365 enabled Kent Building Supplies to support strategic growth initiatives, streamline processes and provide a modern and user-friendly interface. In addition, the move has made integration with third-party systems and platforms easier which will ultimately lead to a more enriched customer and employee experience,” says Mike Simms, Vice President, Retail Division at J.D. Irving, Limited.

Kent realized several major benefits because of its transformation to Dynamics 365:

Near-real–time reporting: Before the implementation, operational reports ran overnight. The data was a day old by the time managers received them. With Dynamics 365, reporting and analytics provide insights in near-real–time on real-life operational metrics and transactional insights to enable dynamic inventory replenishment. Managers have a better view of demand and supply changes, fluctuations, and imbalances, almost as they’re happening. The number of reports was reduced from nearly 6,000 in the legacy system to 350, while increasing the quality of information the business receives daily.

Inventory reduction through master planning: Kent carries hundreds of thousands of SKUs, each with its own unique demand-curve, across 65 locations. Historically, it’s operated in a decentralized model, with many areas of inventory management unplanned and uncontrolled. With Dynamics 365 master planning as the engine, Kent adopted a lean centralized approach that relies on retail data to make planning decisions. This data-driven decision-making has enabled Kent to reduce its inventory by 6.8%.

Faster inventory replenishment to enable inventory reduction: As part of the project, Kent centralized all buying and inventory management. This added economy of scale, increased visibility, and enhanced vendor relations.

Eliminated manual processes: Eliminating manual, redundant processes, Kent reduced manual processing overhead in purchasing and sales by 55%.

Fast store builds with clarity into project management and financial implications: Building a new store is a massive undertaking. Dynamics 365 enables these costs to roll up into overall company financials seamlessly.

Modern POS: Moving to a modern touch-based system made the stores look and feel more modern to help retain and capture customers.

Looking ahead

Kent plans to continue using Dynamics 365 to modernize its business and enable growth and agility in today’s changing business landscape. Kent recently selected a new warehouse management system which will integrate with Dynamics 365 and help manage the fulfillment process. The company is considering adding Dynamics 365 Intelligent Order Management to optimize last-mile delivery. True to its tradition of customer service excellence, Kent is considering the addition of Dynamics 365 Sales and Customer Service.