Fireworks Retailer Sparkles with ERP Solution
When 90% of your business happens in just six weeks, downtime is not an option.
For Phantom Fireworks, which is one of the largest retailers of consumer pyrotechnics in the U.S., the weeks leading up to the July 4 Independence Day holiday is make or break time. From its core of 66 full-time retail operations, Phantom expands to more than 1,200 temporary outlets spread across the country, selling products with names like Midnight Smoke, Jumbo Crackling Ball and Burst ‘N Bloom 8 Shot. Employment surges nearly tenfold to about 2,500 people.
Setting up a point-of-sale network to support that huge increase in volume places unique demands on the company's IT organization. Servers and terminals need to be deployed rapidly and connected to IBM i servers at the company's Youngstown, Ohio headquarters. Temporary staff needs to be trained and inventory management put in place to fulfill the huge spike in business.
Phantom accomplishes this feat with a core IT staff of only four people and help from Vormittag Associates, Inc. (VAI), a Ronkonkoma, NY-based IBM business partner that specializes in enterprise management solutions.
VAI installed an enterprise resource planning solution with a new point-of-sale (POS) front-end that’s not only simple to learn but also accommodates the constant changes in pricing and promotions that drive Phantom’s business. The company is now able to monitor activities at all of its retail outlets in real-time and update its prices and offers consistently across the network. Knowing what’s happening in the stores also minimizes product shortages, since inventory can be dispatched much more quickly with real-time updates that it was with the previous batch system.
The VAI solution replaced an aging POS system that had been purchased in the late 1990s. It was limited to a single daily exchange of sales activity and incentives between the retail store and corporate headquarters. The limitations of batch scheduling stymied Phantom’s agility.
That's important in the retail fireworks business, where discounts and coupons drive a lot of sales. “We made our name in the retail market because of our loyalty program and promotions,” says Mike Koocher, CIO of BJ Alan, which owns Phantom Fireworks. “If a competitor offered a unique promotion, we would match it immediately, but because of our system limitations we couldn’t get the new information into the store registers for at least a day.”
Not so anymore. Now any pricing and promotion changes ripple through to all the stores at the same time. Adjustments are automatically applied at the register so cashiers don't have to fumble with coupons or cross-check prices. The system is so simple to use that temporary employees are up and running with a one-day training session.
VAI also built in redundancy that minimizes the risk of downtime, which can be devastating in a seasonal business. Each store maintains a local server with all the information needed to keep operations running smoothly. If the Internet connection drops, the POS system fails over to the on-premise server seamlessly. When the connection comes back, all data is synchronized immediately.
VAI provides round-the-clock support during the hectic peak season. Previously, stores were sometimes down for hours due to technical failures. The combination of local hardware and VAI support now limits outages to just a few minutes. “There has been virtually no time a store was unable to make a sale in the three years we've been running VAI” Koocher said.
VAI's extensive ERP experience was also valuable in maintaining compliance with the Payment Card Industry Data Security Standard (PCI DSS). Those are strict controls that merchants must observe in order to process credit card transactions.
Previously, Phantom Fireworks handled all its own security and compliance demands, a complex task that changed constantly as regulations were updated. VAI worked out a partnership with Verifone’s Payware service that now stores all the credit card information on Verifone servers, lifting that burden from Phantom’s IT organization. “The PCI compliance alone saved us a lot of money,” says Koocher.
With states increasingly lowering barriers to fireworks use (Michigan and Maine eased restrictions last year), Phantom expects to field an even larger retail network in the future. With a scalable and reliable IT infrastructure in place, the future looks brighter than a Strobe Spectacular 20-Shot.