This process identified a number of slow-running scripts and unlocked some bottlenecks for the business. It found Health Check particularly helpful, where NetSuite investigates systems optimization. To ease the transition, Studio McGee relied on systems implementers and consultants, as well as NetSuite Advanced Customer Support (ACS). You can have a product on paper and the margin looks really good, but when you start adding in all the supply chain costs and factors and not only how you get into port, but how you get from port to warehouse and you use rail and trucking, it's very dynamic so you need really dynamic intelligence. We're really leaning on NetSuite to get good landed cost information. You see those spikes and when you're trying to look at your financials and margin compression and manage cash, those types of surprises can kill you. We just moved from a 45,000 square feet to a 325,000 square feet warehouse facility as we’re stocking more deeply. We've seen the time to receive product increase dramatically so we had to stock deeper. Container costs in January shot up to around $30,000 a container in a normalized environment it’s more like $2,000 to $4,000, and while costs are coming down now, it’s still about $6,000 to $7,000. One of the key challenges the NetSuite system has helped Studio McGee deal with are the supply chain issues that started during the pandemic and continue to plague businesses. When the client reviews each invoice item, they can unselect any they don’t want, and make bank transfer payments in the system instead of needing to pay by credit card or check. The old invoicing system has been upgraded to SuiteCommerce MyAccount to offer interior design clients custom invoices at the project design stage. The business is also planning a move away from Excel spreadsheets, replacing them with NetSuite Planning and Budgeting to speed up budget and merchandise planning processes, and gain a better understanding of product and profit margins. The firm is combining its NetSuite and Shopify data in NSAW, and will be able to add information from Google Analytics and other systems. Studio McGee is using NetSuite Analytics Warehouse (NSAW) to support its move into a new 325,000 square feet fulfillment center, which includes robots for picking and packaging that are integrated with NetSuite. This meant the company could switch from running five disconnected business applications to a single integrated system, increasing productivity, and offering faster and more accurate reporting. To work out the answers to these questions, Studio McGee decided to move away from its existing Xero, Stitch Labs and ShipStation accounting, order management and fulfilment products, and switch to NetSuite ERP. The challenges are, we have so many opportunities, how do we discipline ourselves, how do we organize ourselves, how do have accurate score keeping in each of our business segments to know which business is doing well, which businesses to pursue. We have multiple businesses, our design business is actually one of our smaller businesses now, our largest business is our e-commerce direct-to-consumer business, which is 85% of our revenue. That introduces a lot of interesting challenges, where you have this great following and you're running as fast as you can just to keep up with the demand. While the company managed the growth, behind the scenes Studio McGee was struggling with disconnected business systems that made it difficult to capitalize on emerging opportunities. The situation came to a head when demand for homeware spiked in 2020, leading to a rapid rise in sales and customer base. One of our challenges has been to scale as quickly as possible to keep up with demand. Whereas historically in order to have a big name, you have to execute really well. You can have millions of followers and then people think you're huge when in reality you're just trying to fulfill out the back office. It's an interesting dynamic with social-led businesses, that you can have an outsized following that outskirts your competency. Patrick Ord, President at Studio McGee, explains: However, the firm’s evolution from home renovator to multi-channel business with 3.5 million Instagram followers has brought challenges. The company has grown from a staff of two to employ 200 people and expects to post revenue of over $100m this year. From that initial foray into interior design, Studio McGee now operates seven subsidiaries, offers a range of homeware items, has a licensing deal with Target, and even has its own Netflix show, Dream Home Makeover. When wife and husband team Shea and Syd McGee documented their home renovation on Instagram back in 2014, the pair quickly built a loyal following.
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