Scaling ERP to accomodate rapid growth can be challenging. A midsize, over 45-year-old distributor of manufactured goods in the Midwest sees their sales grow suddenly by a factor of 10. One can imagine a typical case study on the pressures of rapid sales growth. Most companies would struggle mightily with that type of transition. Perhaps the company might lose track of customer orders, drown in a tide of customer service complaints, or experience a steady drain of employee attrition due to stress. The difference between a failure to scale and long-term successful growth is often related to the ability of resource planning systems to scale. Rapid sales growth has brought many a strong company to its knees, but those with good ERP software have a built-in advantage for growing efficiently.
About AVS Companies
AVS was founded in 1971 with a focus on vending machines. In the 1980s, they expanded into the market for jukeboxes and amusement which brought increased sales over time. Their period of rapid growth only began in 2012 when they entered the video lottery market. The sales growth was compounded in the following years when they acquired companies in Minnesota, Wisconsin, and Texas. Today AVS is a wholesale distributor of vending devices, video games, vending machines, pool tables, jukeboxes, and video slot machines across a large geographic region.
When AVS Companies offered a new line of video lottery machines a few years ago, they watched their sales go from the single digit millions into the stratosphere.
Like many distributors, the business of AVS is largely operated through a retail showroom. This retail model is not dissimilar to that of a local car dealership which is centered around a showroom with display models of their products lines. The retail location includes a parts counter and a large service department that can service all products the company sells as well as products from other companies. The retail location also sells used equipment, offers trade-ins, and provides financing options. Refurbishing of machines can be done at the retail location or at the customer site by mobile technicians.
The dedicated AVS team is central to the company’s success
Adapting to fast growth
When AVS Companies offered a new line of video lottery machines a few years ago, they watched their sales go from the single digit millions into the stratosphere. AVS was able to scale due in large part to their Enterprise Resource Planning software from abas ERP. AVS did anticipate that sales would grow and had engaged with abas prior to the coming storm of sales to update their abas ERP deployment. They used this time to implement the abas service module during a two-month rollout. When the flood of sales orders started to come in, AVS kept up with the order volume through automated systems for tracking inventory from order to cash.
AVS has a long wish list of new abas erp modules they plan to take advantage of
AVS handles all of their accounting functions through abas ERP. As is common to most distributors of manufactured goods, the process for a new order starts with the establishment of a contractual relationship. A new customer walks in the door or is introduced to an account manager. The customer learns about product options and when they’re ready to buy, a new customer account is set up. That new customer account is used to initiate orders that come in by phone, by fax, or electronically.
Typically, a new order goes through a confirmation process which initiates a contract between the distributor and customer to fulfill and pay for the order. The order then enters the processing phase with a larger team of shipping and logistics personnel managing the process by which the product leaves the manufacturer or warehouse and proceeds on its journey to the company retail location or directly to the customer site. A separate process is initiated to handle the invoice which is generated, sent to the customer, and tracked until payment has been made. At each stage of this complex process, every transaction is recorded in the accounting system.
The AVS Executive Team, including President, Vince Gumma (back left), set the strategic direction for the organization
Today AVS has settled into their role as a larger and still growing company. To support their business needs, they are actively working with abas to further improve operational efficiencies throughout the enterprise. Due to their positive experience with abas customer service and the steady pace of new abas features that have become available, AVS has a long wish list of new modules of which they plan to take advantage.
AVS continues with their latest upgrade to new abas ERP software with a team of onsite abas technicians assisting with an upgrade to the most recent release of the service order component. They are now considering the next phase including abas modules for sales management and CRM. With a firm enterprise foundation in place, AVS can continue to focus on its core business of distribution while relying on their ERP partnership to improve systems and increase operational efficiencies.
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