A lot of new businesses have only one of two ambitions: either a nice solid start, or to set the world on fire. Lenny Vainberg wanted both — and not only is he pulling it off, he’s sharing his experience and formula for success.
Lenny is CEO of ModaConcrete™ | TerraFlame, a brand he acquired from a private equity firm a few years ago.
“We bought a brand, and essentially built a factory and set up a supply chain in Baja, Mexico to produce our products,” Lenny explains. “We adapted a factory that was set up to produce architectural precast and tooled up production to manufacture the most popular TerraFlame products. Later, we reintroduced the precast production as an online business supplying architectural precast to the trade. We now have two brands: ModaConcrete and TerraFlame coming out of the same factory, serving two divergent but complimentary markets.”
“TerraFlame,” Lenny says, “is the leader in clean-burning gel fuels, and fuel burning appliances. Our Pure Gel Fuel is the ‘razor blade’ which is available in select retail stores, online retail and through our subscription plan. You basically pop our fire fuel can into our fire bowl or fireplace and enjoy. Each TerraFlame fuel can generate 3 hours of warm, ambient , golden flame for about three hours and costs about $6. And they are food safe, which makes them perfect for Smores.”
ModaConcrete™, on the other hand, sells architectural precast concrete products that are designed to create fashionable and beautiful hardscape environments, sold and fulfilled factory direct to trade and design / build channels.
The TerraFlame brand designs and markets clever consumer products, while ModaConcrete overlaps from home owner to the trade. Both brands produce great products, but the real innovation is in what Lenny has done to grow the company by a truly astonishing margin in the two short years.
“The key is to build a capable and scalable systems foundation as early as possible”, he says, “a functional ERP for supply chain, manufacturing and inventory management.” Tying it all together is Cin7.
Cracking the cool consumables market without going up in smoke
When Lenny bought the company, it had a couple of “really cool” products that were getting good traction in retail. But, beneath the surface, big cracks had formed.
The products might have been good, but revenue was nowhere near the level they’d expected it to be. It was difficult to fully understand the true product and operating costs with little visibility between manufacturing and fulfillment. Compounding the problem was that the operations were in a very raw state. Before Cin7, the company didn’t really have any inventory management — not even the basics.
“There were no systems,” Lenny says. “It was napkins and spreadsheets and nobody knew what was going on operationally. They were looking at things without understanding the true cost of goods, because they really had no way of doing that. And filling more orders, means throwing man hours towards more manual entry. None of it was scalable.”
ModaConcrete and TerraFlame needed to find a hard fix — fast. And from previous experience, Lenny knew exactly what they needed. The only problem was that the kinds of ERP systems he’d worked with prior required significant time and capital resources, a huge investment for a company at this early stage.
“We needed to find some kind of effective ERP system that we could use to not only manage our inventory and manufacturing, but also integrate our EDI and forecasting,” Lenny says.
They considered a few other options — Lenny’s previous company had run a substantial NetSuite instance, with its own internal development group. But being new and running on a relative shoestring, the company didn’t have the time or budget to support that kind of deployment. Eventually, his search led him to Cin7.
“When we found Cin7, and started seeing the capabilities and features, we were very surprised and impressed with the functionality and the breadth of what the system could do.”
Today, ModaConcrete and TerraFlame are using Cin7 from the beginning to the end of the product journey — and it all starts with manufacturing.
ModaConcrete has a solid foundation in Cin7
About 60 percent of ModaConcrete and TerraFlame’s business is products that they manufacture in-house, so visibility is critical. And before Cin7, “it was Quickbooks and spreadsheets,” Lenny says. “People would eyeball everything from mix design to sell through and that was it. There was no inventory control, no BOM management or production management, no raw material tracking, nothing”
To manage the manufacturing, ModaConcrete and TerraFlame are using the Bill of Materials (BOM) functionality of Cin7.
“We’ll design a new product, test it, create 3D models of it, develop the mold set, then it’s on to filling, casting and finishing the parts,” Lenny says. “We have several product types and about a dozen different concrete mix designs, depending what the products are for — and we set up those mix designs as BOMs in our system.”
Essentially, every raw material that goes into making a new product is measured and tracked in Cin7 via the Bill of Materials. When the raw materials are combined into a product, that too is tracked in Cin7, where the new product can be added to inventory even as the materials used to make it are subtracted. This simplified manufacturing process management is standard in the Cin7 software.
ModaConcrete is also making use of Cin7’s Made to Order functionality. One of their bigger sales channels is B2B sales direct to trade stores, construction companies, and job sites. Customers can visit ModaConcrete.com and select from a range of products, sizes, shapes, and colors.
This order information goes into Cin7, which tells the manufacturing operation exactly what to produce. Behind the scenes, ModaConcrete has ‘blanks’ ready to be modified into the exact items the customer wants, and once items are finished and shipped, the customer gets notified that their order is on the way. No matter whether a customer is big or small, Made to Order means they get exactly what they’re after, every time.
“Understanding Cin7 Made to Order has enabled us to build up preliminary stock to convert into finished goods a lot faster than trying to make them from scratch every time,” Lenny says.
For a manufacturer, operating with this level of inventory control has huge advantages. Material costs can be carefully managed, and forecasting requirements gets vastly easier. Operations know where everything is, how fast it’s being used up, and when products will be ready to be sold. Manual inventory tracking tasks are reduced, and relieved of operational overhead, staff can get on with the job of actually making and shipping products.
For ModaConcrete and TerraFlame, this was an increase in visibility by many orders of magnitude. Now, they have a clear understanding of costs from manufacturing to finished goods to shipping. “Now you can see what your true cost is, and based on that, you can make intelligent decisions on what you’re going to do,” Lenny says.
Native EDI unlocks the freedom to scale
The other big item on Lenny’s agenda was EDI. First created in the 1960s, Electronic Data Interchange is a technology that allows the automated, computer-to-computer exchange of business information. It might be old, but it’s still one of the most-spoken languages of business — and if a company can’t speak it, it’s missing out.
Cin7 is one of very few inventory management systems with native EDI integration capability, and it’s the secret weapon that’s allowed ModaConcrete and TerraFlame to grow as rapidly as they have, with their wares now available in all the biggest US retail outlets, including Target, Costco, Williams Sonoma, Amazon and more. It’s been a huge leap for the company, compared to how things were done before.
“When we bought the company, we were barely doing 300 orders a week over multiple platforms, and as you can imagine, everything was manual,” Lenny says. “Every order required at least four manual touches. Staff had to download the order from each partner portal, enter it into Quickbooks, enter it into the warehouse ship requests, manually create the label, and then enter shipment tracking back into the portal, to close out the order process. The previous thinking was that scale required more people to work faster and harder to keep up with the paper pushing.”
But all that was about to change. Once the company implemented Cin7, integrated ShipStation, and set up barcode scanning and labeling at the factory, things got much more efficient. They had a better system, instead of trying to make a broken system work harder. And after activating Cin7’s EDI capability, things went to another level again.
‘I’d say that we multiplied our throughput by seven times. Specifically the same small team that struggled to supply 300 orders per week, can comfortably handle up to 2000 orders per week today,” Lenny says, casually. “And now we’ve got that EDI rolling, we won’t bring on a customer unless they’re EDI capable and integrated with our system. We rarely accept non-EDI integrations or orders.”
It’s a bold step, but it’s one that puts them head and shoulders above similarly-sized product companies — and on the same playing field as the biggest companies in the United States.
“There’s not a lot of companies with less than $10 million in revenue requiring EDI compliance with their trading partners in order to drop ship for them, just because most of them don’t have those capabilities,” Lenny says. “But it’s these capabilities that are most important, because they give us the ability to scale. I think that’s the most important thing that came from Cin7.”
Right now, ModaConcrete and TerraFlame are managing 16 EDI connections, end to end, in Cin7. They’re managing Costco, Wayfair, Lowes, Home Depot, all the major Internet retailers, as well as some brick and mortar retailers. They’re also managing inventory in four different locations, across two different product lines, and two direct to consumer websites, as well as a third party Amazon presence. It’s all being done with Cin7.
“It gives us the ability to operate on the level of a much bigger, more capable company, despite being a small operation,” Lenny says. “We have a 10 person team in-house in Southern California where we do sales, marketing, and web strategy. And we have 60 people at our factory in Tecate. Cin7 enables that 10 person team to look and operate as a much more sophisticated company, when it comes to our trading partners.”