Headquartered in Minneapolis, Minnesota, Caribou Coffee Company is the nation's second largest specialty coffee company with 2,800 employees and three facilities which roast, package and distribute 4 million pounds of coffee to over 200 company-owned stores. Caribou Coffee's stores have the look and feel of an Alaskan lodge with knotty-pine cabinetry, a fireplace and soft seating.  The company also sells its coffee, equipment and other goods via the Caribou Coffee Web site and select retail/grocery partners.

Business Needs

Looking for Accuracy and Control

Caribou Coffee Company cofounders John and Kim Puckett quickly grew the company after establishing the first coffee house in 1992.  With this rapid growth, the company also began to experience some business pains says Paul Turek, General Manager of Support Operations at Caribou Coffee.  “Orders received via phone, fax and the Web needed to be translated into disparate systems maintained by each supporting department", he said. “Often critical information—timing, volume, costs, configurations—was lost due to the lack of integration between these processes.”

Other problems included:

• Poor vendor information
• No purchase order history
• Critical delivery details often falling between the cracks
• Inventory levels  kept artificially high to make sure there was product available
• Period-end closings requiring extensive time and resources to compile the myriad of incoming  reports

Also, invoice to purchase order reconciliation was time consuming due to the omission of details and item discrepancies

Business Answers

Microsoft Dynamics GP

Caribou Coffee worked with Microsoft Dynamics Business Solutions reselling partner InterDyn BMI to find a solution for these business pains.  InterDyn BMI, which took the time to learn Caribou Coffee’s business model and supply chain requirements, recommended the Microsoft Dynamics GP solution specifically because of the capabilities offered in the areas of manufacturing, distribution and financials.

Benefits

Improved Processes

Sales Order Entry greatly improved order fulfillment accuracy—from 95% to 99.5%—because now order profiles are identical regardless of origin or destination and critical information remains intact.  Improved order accuracy reduces time spent correcting errors and adds money to the bottom line.

In order to track vendor discounts and current pricing levels, Caribou Coffee utilizes the Purchase Order Processing module to provide a detailed order history.  This has raised the accuracy of delivery receipts from 89% to 98.7%.  This again reduces the time Caribou Coffee employees need to spend making corrections in the systems and greatly improves the company’s vendor management processes.

The increased accuracy of sales and purchase orders also directly affects the speed and accuracy of financial statements and reports generated by Microsoft Business Solutions Financial Reporting.  Now Microsoft Dynamics GP captures financial activity in real time; and because of increased order accuracy, staffing time for the period-end closing and reporting process is down 33%.

Streamlined and Efficient

Microsoft Dynamics GP directly improved Caribou Coffee’s manufacturing and distribution processes too. Now bills of materials (BOM) show individual product component specifications so each BOM accurately reflects its requirements and costs. Employee labor and overhead costs are also applied directly to each BOM so each batch of coffee is accurately tracked in the system.

Previously, because of difficulty in maintaining an accurate count, inventory stocks were kept artificially high.  Inventory is now expressed in real time at both the corporate warehouse and in each store.  This allows Caribou Coffee to match production more accurately to sales which increases efficiency and saves the company money.  Specifically, this tracking has also allowed Caribou to reduce Work in Process (WIP) inventory by 90%.

By implementing Microsoft Dynamics GP, Caribou Coffee now has an efficient financial system that offers them greater accuracy and control over their ordering, manufacturing, distribution and financial processes.

Return on Investment

• Increased order fulfillment accuracy improved from 95% to 99.5%.
• Delivery receipt accuracy improved from 89% to 98.7%.
• Time spent on period-end closing and reporting reduced by 33%.
• Administrative penalties and fees assessed reduced by 80%.
• The company now monitors real-time inventory volume and costs—WIP inventory fell 90%.

By: Audra Carlisle, InterDyn BMI- South Dakota Microsoft Dynamics Partner