Sitro Group Australia

Sitro Group Australia (SGA), a leading distributor of outdoor leisure and industrial safety products with operations across Australia and New Zealand, embarked on a transformative journey to streamline their distribution processes by implementing Microsoft Dynamics 365 Business Central with the expertise of Professional Advantage (PA).

For over 30 years, SGA has been a prominent wholesaler and distributor in the outdoor leisure industry, collaborating with reputable brands such as Gasmate, Oklahoma Joe's, Chapala Chimeneas, Cabinex, AlfrescoPlus, Charmate, B&B Charcoal, and Honeywell. The company has established itself as a key supplier to Australia's top appliance retailers, DIY hardware stores, and specialty retailers, including major players like Bunnings and Harvey Norman.

With a diverse product range spanning multiple industries and a complex multi-entity structure, Sitro sought to replace their legacy systems, including Microsoft Dynamics GP for financials and Radio Beacon for warehouse management. This strategic move aimed to unify their operations, enhance visibility across their extensive distribution network, and position the company for scalable growth in the competitive Australasian market. By implementing Business Central, Sitro aimed to modernise its IT infrastructure to better support its long-standing relationships with both suppliers and retailers, ensuring continued success in the dynamic outdoor leisure and industrial safety sectors.

The Vision

Sitro's vision for the future is built on three key pillars of digital transformation and business optimisation.

Firstly, the organisation aims to fully transition to cloud-based operations, enhancing flexibility, geographical reach, and collaboration capabilities across different branch offices. This shift away from on-premises infrastructure will streamline operations and reduce reliance on physical hardware.

Secondly, the business is focused on effectively splitting and reconsolidating its group structure, allowing for more independent trading of individual businesses while maintaining the ability to provide meaningful, accurate figures to shareholders and during monthly meetings. This restructuring will improve accountability and operational efficiency across the group.

Lastly, Sitro is strengthening its partnership with SPS Commerce to consolidate EDI (electronic data interchange) integrations, moving away from multiple small integrations to a unified, global solution. This partnership will enable real-time integration with warehouses worldwide, creating a plug-and-play environment that simplifies expansion and collaboration with new facilities, regardless of their location.

The Challenges

As a multi-entity distributor, Sitro faced several challenges with their legacy systems, including:

• Fragmented systems leading to data silos between financial and warehouse operations.
• Limited visibility across multiple warehouses and locations due to separate systems.
• Inefficient inventory management and tracking, with discrepancies between Microsoft Dynamics GP and Radio Beacon.
• Manual processes for order fulfillment and shipping, requiring double data entry.
• Lack of real-time reporting for inventory levels and sales performance across both systems.
• Difficulty in scaling operations as the business grew across Australia and New Zealand.
• Costly maintenance and upgrades of two separate on-premises solutions.
• Challenges in consolidating financial data from multiple entities in Dynamics GP.
• Inability to easily track landed costs and manage complex distribution scenarios.

The transition from Dynamics GP and Radio Beacon to a unified solution in Business Central aimed to address these challenges and provide a more integrated and efficient distribution management system.

The Tailored Solution

Operations:

Professional Advantage implemented a fully integrated Business Central solution designed specifically for Sitro's warehousing and distribution needs. This comprehensive system combined finance, warehouse management, and supply chain automation, while seamlessly integrating with their EDI, 3PL (third-party logistics), freight provider, and e-commerce platforms. With a focus on enhancing inventory management across multiple locations, the solution introduced advanced features such as bin management for Sitro-owned warehouses. In addition, automated inventory valuation and costing were implemented to improve accuracy and efficiency.

Order processing:

The order processing capabilities saw a significant upgrade, with the system now enabling automated order creation and fulfillment through EDI integration with Sitro’s 3PL partners. Orders are processed more efficiently, from sales order to creation to invoicing, with workflows for picking, packing, and shipping optimised for speed and accuracy.

Additionally, Sitro can now generate Serial Shipping Container Code (SSCC) labels directly from Business Central, while consignment numbers from freight providers are linked to each shipment, ensuring full traceability.

An essential part of this upgrade was the implementation of landed cost tracking, which includes comprehensive calculation and item charge functionality for freight, customs, and import costs. This ensures precise pricing and margin management throughout the process.

Multi-company operations:

To meet the demands of Sitro’s multi-company structure, the Business Central solution included intercompany transaction management for seamless cross-entity inventory movements. The solution also enabled consolidated financial reporting in AUD, simplifying financial oversight and ensuring compliance across Sitro’s various operations.

Warehouse management:

Warehouse operations were significantly enhanced with mobile handheld capabilities for receiving, picking, packing, and dispatch, which improved efficiency throughout Sitro’s logistics. The system was designed with location management in mind, supporting both 3PL and Sitro-owned warehouses. In Sitro-owned locations, bin management was introduced to improve picking efficiency. Automated sales order creation through EDI integration—along with streamlined purchasing processes for stock replenishment and prepayment functionality for vendor orders—further strengthened operational control.

Real-time inventory visibility became a central focus, providing enhanced oversight across all locations. The solution also supported automated inventory picks linked to sales orders and facilitated efficient intercompany inventory transfers.

Financial management capabilities were expanded with multi-currency support, automatic exchange rate updates, revenue and expense deferrals, and GST/BAS reporting tailored for both Australian and New Zealand entities.

This tailored solution was designed to elevate Sitro's operational efficiency, reduce manual intervention, and improve service delivery across their distribution network. By addressing key pain points and automating processes, Sitro is now better positioned to manage their inventory, financials, and multi-company structure, ultimately benefiting their customers.

Benefits

The new Business Central solution has delivered significant improvements for Sitro's warehousing and distribution operations including:

1. Cost savings:
   Elimination of the Radio Beacon system saved $50,000 annually in maintenance costs.
2. Cloud-based infrastructure:
   The project enabled Sitro to become fully cloud-based, offering greater flexibility and geographical collaboration opportunities.
3. Reduced on-premises infrastructure:
   Sitro was able to deactivate approximately half of their physical infrastructure.
4. Centralised platform:
   Business Central provided a centralised system that replaced separate ERP and WMS systems.
5. Simplified integration:
   The new system eliminated the need for complex integrations between multiple platforms.
6. Reduced dependency on external consultants:
   Sitro no longer needs to rely on consultants for system maintenance and upgrades.

7. Improved business segmentation:
   The new system allows for better separation of different business units within the Sitro group.
8. Enhanced financial visibility:
   Finance teams can more easily track the true position of each individual business within the group.
9. Streamlined processes:
   As users adapt to the new system, processes are becoming more routine and efficient.
10. More accurate reporting:
    The system provides more meaningful and accurate figures for shareholders and monthly meetings.
11. Scalability:
    The new solution better accommodates Sitro's growth.
12. Futureproofing:
    The project has positioned Sitro to take advantage of upcoming technologies, such as AI-powered features like Copilot in Business Central.

The Future

Sitro aims to expand their use of Microsoft 365 tools over the next three to five years, integrating more aspects of their business operations. Specifically, they plan to implement Dynamics 365 Customer Engagement and a customer service tool to manage service calls and mobile agents. They also intend to deploy Microsoft Power BI for advanced analytics and reporting. They see these additions as "plug and play" solutions that will seamlessly connect with their existing Business Central set-up. Additionally, they plan to incorporate the newly acquired New Zealand business into their Business Central environment, a process they expect to be much simpler and faster than their initial implementation. Overall, Sitro is looking to leverage the full potential of the Microsoft ecosystem to enhance their business operations and customer service capabilities.

Conclusion

The implementation of Microsoft Dynamics 365 Business Central by Professional Advantage has positioned Sitro Group Australia for improved distribution efficiency, better inventory control, and enhanced decision-making capabilities. With this modern, cloud-based ERP system tailored to their distribution needs, Sitro is now equipped to drive growth, improve customer satisfaction, and optimise their supply chain operations across Australia and New Zealand.