When Gavin Gilbert moved his stone slab importing business from Australia to South Africa in 2017, he did what many managing directors of new South African companies do. He installed a locally developed accounting and business management software solution to run his operations. But before long, the shortcomings of his chosen system began to reveal themselves. Recognising that his software was not adequately coping with the demands of his growing business, Gavin decided to replace it. The system he moved over to was Jiwa, which he was a long-time user of while running his previous company in Sydney.
Fortunately for Gavin, in South Africa the laws and procedures governing business accounting are similar to Australia’s, so transitioning to an Australian ERP system was largely risk free.
“My experience with Jiwa when I was in Australia was very positive”, he said. “It was both affordable but very powerful, with plenty of features that you normally would only find in high-end ERP systems. When I eventually concluded that none of the South African ERP providers could meet my needs in terms of price and functionality, the logical thing to do was for me to become a Jiwa customer once again. This was made easy by the fact that accounting rules and practices in South Africa closely resemble the way things are done in Australia.”
Gavin’s Johannesburg-based company, Lioli Ceramics, is an importer and distributor of porcelain slabs that are manufactured in India. Lioli’s tiles are sold to designers, architects and stonemasons and are mostly used for commercial applications such as buildings, cafés and restaurants. The company uses the cloud version of Jiwa, running on the Microsoft Azure platform, to manage accounting, purchasing, shipping, inventory and warehousing.
“Without Jiwa we would simply be less good at what we do.”
Complete control over every aspect of the importing, sales and distribution process is what Lioli most needed in an ERP solution. Lioli specialises in lines of products that are expensive and which need to be handled and tracked with extreme care and precision. It is Jiwa’s ability to provide comprehensive and detailed data on each of the company’s SKUs that is proving its worth at Lioli.
Gavin explains: “Whenever we place an order from our manufacturing plant in India, say for 25 porcelain tiles, we need to know whether it’s been shipped and, if it has, what vessel it’s on and in which containers each of the slabs, which are individually barcoded, are stored. Once they arrive in South Africa the slabs get distributed to our third party warehouses which then get them out to our customers. Jiwa enables us to track and drive that whole process from beginning to end for each individual slab, and it’s this tight level of control provided by Jiwa that has proven invaluable to us. Our products are pricey and we simply cannot afford to have an item go missing. Jiwa largely eliminates this possibility through its comprehensive reporting and tracking functionality.”
When Lioli’s products arrive at one of Lioli’s third party warehouses that warehouse sends Lioli documentation about the shipment which is then fed into Jiwa. From there, using Jiwa’s Landed Cost functionality, Lioli calculates all the expenses incurred with the shipment to arrive at an accurate and detailed final costing.
Gavin says, “Jiwa’s costing module is very strong, providing all the detail we need to do the job properly. Whenever we receive a shipment there’s up to 40 charges we incurred to get the products to us. From wharfage to container unload through to freight, insurance and a host of other expenses, Jiwa can calculate it all quickly and accurately. Jiwa is very clever in this regard as it allows us to get our landed cost down to the cent. This is great for us because it’s the information we need to get our pricing right.”
Importantly for Lioli, Jiwa does not calculate average unit costs across multiple items. Rather, the system calculates costs for each individual item, thereby providing an added layer of accuracy. Gavin finds this capability enormously useful because “a focus on detail is what our business needs. We call it ‘turning apples into diamonds.’ If you have a cart of apples and a few fall off the side, it doesn’t affect the records for that batch of inventory because it’s the full cart that is recorded as the shipment. That type of record keeping doesn’t work for us because we need to record, track and work out the landed cost of every individual item in an order, like they’re diamonds rather than apples. One of the things that sets Jiwa apart is the granular detail it provides, ideal for a business like mine that imports costly products.”
For customers whose orders cannot be immediately fulfilled, Lioli makes use of Jiwa’s back order functionality. Jiwa manages back orders on a ‘first come, first served’ basis, ensuring that those who have waited the longest receive top priority. In back order scenarios the original sales order remains the master document for all customer dispatches relating to that order, so that whenever an invoice is raised for part of an order it is linked to that sales order. This ensures that when an order is fulfilled via multiple dispatches control over the process is maintained.
Says Gavin: “With a lot of ERP systems the sales order number you create is not the same as the invoice number you apply when the order goes out, and this can make things messy when it comes to orders that are fulfilled across several shipments. But with Jiwa the two are integrally linked – the sales order becomes the invoice number. Because everything is documented under the one sales order we can easily keep track of what has gone out to the customer and what we’re waiting on, and we can answer customer enquiries about where things are at in an instant.”
One of the key advantages to using a third party warehouse is that by relieving yourself of the responsibility and hassle of running your own warehouse operations you can focus more of your time on your business’s core competencies. However one of the commonly perceived risks with this type of outsourcing lies in giving up control. For Lioli, the fear of being left in the dark when it comes to its own inventory has been eliminated by the company’s use of Jiwa. The comprehensive reporting and inventory management capabilities of the system ensure that Lioli is informed on what’s happening with its inventory at all times.
“Without Jiwa we would have to rely on weekly reports and spreadsheets from our outsourced warehouses to tell us what inventory we have, where it’s located, what items are on order and so on”, said Gavin. “In doing that we would be depending on another business’s systems that we can’t guarantee the integrity or reliability of, and that wouldn’t be acceptable to us. But with Jiwa we can manage our inventory as effectively as we could our own internal warehouse. Jiwa enables us to run our own reports and processes for checking on stock and making sure inventory is where it’s supposed to be and in the right quantities.
“So rather than relying on our warehousing partners to tell us what stock we have and what we need to reorder, Jiwa provides us with that information in real time. If we didn’t have Jiwa, our third party warehouses would be driving us, but instead we’re driving them.”
For a lot of Jiwa customers, one of the strengths of the system is that it can use sales history data to indicate which stock should be re-ordered. For Lioli this is a plus because, as Gaving says, “any inventory management program can tell you when stock has fallen below a certain level, and therefor should be re-ordered, however this is not necessarily the best way to forecast future stock needs. By delving into the sales history, say for the last six months, of a particular stock item, Jiwa can more accurately indicate the likely future sales of that item, and re-order accordingly. The predictive capabilities of Jiwa ensure that we rarely find ourselves overstocked or understocked.”
Into the Future
Since transitioning to Jiwa two years ago, Lioli Ceramics has gone from strength to strength. With a workforce comprised of eight employees, Gavin and his team are able to effectively manage a sizeable importing and distribution business while keeping overheads low. Jiwa has been central to Lioli’s success in this regard. By enhancing efficiency, productivity and operational cost reduction across a number of core business areas, Jiwa continues to impact Lioli’s bottom line in the most positive of ways. As Gavin says, “I’m probably saving myself the cost of three staff members because of the efficiencies of Jiwa. The Jiwa solution does a lot of the administrative work that I would otherwise have to employ people to carry out, such as checking on stock, chasing up third party partners, calculating importing costs, and the list goes on. Without Jiwa we would simply be less good at what we do.”