Cloud-based enterprise software improves fulfillment speed and accuracy

Lionel is a 114-year-old hobby train business that includes its Lionel Racing subsidiary, which sells NASCAR die-cast cars and other racing collectibles. To improve its business performance, Lionel moved from legacy green-screen applications to a single cloud solution for enterprise resource planning (ERP), e-commerce and customer relationship management (CRM). As a result, distribution and fulfillment processes were significantly improved.

Previously, the company incurred high costs for manual order processing, with a risk of delays and errors. Lack of automation and visibility hindered fulfillment efficiency and business growth. Today, the company has improved fulfillment speed and accuracy from its North Carolina warehouse across multiple channels—wholesale orders from big box retailers and hobby shops, as well as orders from consumers at its e-commerce Web store. In addition, Lionel fills orders that consumers place on selected retailer Web sites in partnership with chains.

“It has given us capabilities to shorten our turnaround time for processing orders, so we can now guarantee an order will be shipped within a 48-hour window,” says Rick Gemereth, vice president of information technology and operations for Lionel. “We’re now able to take large order volumes and process them on a timely basis.”

The cloud solution (NetSuite, netsuite.com) is comprised of ERP, including inventory and order management, shipping software and electronic data interchange (EDI). Gemereth adds that Lionel can now readily scale to periods of peak demand, such as a four-week period in November/December that accounts for 50% of e-commerce orders for the year.

Once the cloud fulfillment solution went live in phases in 2010 and 2012, Lionel experienced additional savings from ending its relationship with a third-party logistics provider, and has dramatically reduced the risk of charge-backs for violating fulfillment terms with retailers. The solution’s flexibility has also helped Lionel expand into the eBay channel, integrating with marketplace solutions to process eBay orders.

Besides fulfillment, Lionel relies on the software provider to power its e-commerce site, as well as financials and CRM. Compared to manual processes in the previous green-screen environment, Lionel financial and operations managers have new visibility into real-time sales, customer, inventory and supplier data without having to rely on IT.

“The feature-rich, self-service reporting capabilities have empowered our business users to do their own analysis,” says Gemereth. “That’s improved our efficiency and effectiveness.”