Cin7 Case Study

The Spice & Tea Exchange

Perfecting the Full Sensory Shopping Experience

by Simon Eskow
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The Spice & Tea Exchange needed a system to support its growth. Cin7 and its seamless accounting integration did it at far less than the cost of competing ERPs.

Step into any of The Spice & Tea Exchange franchises, and you’ll forever remember the exotic aromas waiting behind their doors.

Founded in 2008, The Spice & Tea Exchange was formed by a group of talented individuals with a passion for life and food. The Spice & Tea Exchange’s mission statement, “Creating & sharing the experience of a more flavorful life,” is the cornerstone of the company which strives to provide guests with quality products and flavorful memories.

Inside, the store’s interior is reminiscent of an 18th Century Trading Post with apothecary-style jars lining the shelves. It’s an interactive shopping experience where guests are encouraged to “smell the spices,” and watch Spice Masters create hand-mixed blends before their eyes.

The Spice & Tea Exchange launched as a single store in Florida in 2005, with the intent to lure foodies among Florida’s east coast. As the concept developed, customers wanted to get into the business themselves, leading to the company’s first franchise in 2008.

The Spice & Tea Exchange has since grown to 54 franchisees, all successfully replicating the company’s original vision. Customer reaction has been positive, and the model has worked so well, growth appears to be accelerating, with The Spice & Tea Exchange expanding its footprint by 25% in 2016 alone.

 

Growing Pains

The company had one problem. Its growth in footprint and sales were outpacing its original accounting software solution while growing complexity in its supply chain meant it needed an inventory management solution to keep costs under control.

“We were looking for a more modern accounting and inventory management system. Preferably, a scalable cloud-based solution flexible enough to grow with us,” says Kessenich. “Due to the complexity of our requirement list, our search began with a focus only on what I call the traditional established ERP solutions.”

They originally decided that JD Edwards EnterpriseOne would work best, but implementation turned out to be cost-prohibitive. They went back to the drawing board, migrating to Xero for general ledger accounting while continuing the search for an inventory management solution.

“We realized pretty quickly that a combination of Cin7 with Xero would accomplish 85% of what a $200,000 system could do for us, but in a more flexible cost-effective way,” says Kessenich.

Cin7 Makes Warehouse Operations Easier, Too

“Our primary distribution facility is housed within our St. Augustine operations center,” Kessenich says. “This is where all the magic happens as we bring in raw materials from many sources, convert them for sale, and distribute them out to our Franchisees who then prepare products and make the final sale to customers across the country.”

Handling orders in the DC for hundreds of SKUs going to dozens of stores was far more labor-intensive prior to Cin7. Warehouse staff had to print out paper orders and pick lists, and after pulling products for those orders, they would enter information into the shipping software to print labels. Finally, someone had to enter the orders off the paper pick list into the accounting system for transaction processing.

“With Cin7 we now complete fulfillment electronically on tablets. We are able to track, in real time, the flow of product from receipt of raw materials through printing of shipping labels for packed boxes,” says Kessenich. “This process allows us to capture far more information than ever before and find ways to create new efficient processes for order fulfillment and inventory management.”

Producing custom blends required a similar level of administrative work.

“Previously, we had to track the use of ingredients and materials in our production processes by hand on paper. Once we completed a production process we’d have to manually enter that data into the accounting system to track usage.” Kessenich says. “With Cin7 we can complete their production processes electronically in real time allowing us to closely track usage and understand out production process better.”

The integration provides visibility and efficiency to franchisees who want to know what products are available or who want to place an order to replenish a product.


The Cin7 Return on Investment

Cin7 has given The Spice & Tea Exchange not only full management of its supply chain but saved time and increased accuracy in order fulfillment.

“We’re able to fulfill orders quicker with better accuracy, and comfortably serve our franchisees while carrying less inventory,” Kessenich says. “Not having to manually track and log each process allows us to focus on responding to the needs of our franchisees and find new ways to improve operations. Time previously spent tracking down paper can now be shifted to creating value for the company.”

The company also has been able to add a level of quality assurance to its franchisees and customers.

“We’re using batch tracking now so that we can carefully trace the origins of each product we sell,” Kessenich says. “For any consumable, it’s extremely important to provide end users with a clear chain of custody all the way back to the purchase order from the original supplier and doing that on paper was a major challenge. Cin7 is more cohesive and has allowed us to create this tracking data much more efficiently and accurately than ever before.”

“Cin7 provides such depth of origin tracking that, for just about any product our franchisees sell, they can feel confident that we can trace it all the way back to its original source production lot should there ever be a problem.”

 

Business Benefits

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Comprehensive view and control over complex supply chain

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Less expensive, easier to use and implement than $200,000 ERP system

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Order processing time cut down by a day in some instances

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One system (not three) to process and track purchase orders

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Streamlined processing for production and warehouse staff

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Batch tracking gives chain-of-custody quality assurance