What is good to know about jewelry management systems

Coronavirus will undoubtedly shake the jewelry industry, at least as much as it did in most other global industries. We can envision the possible future if we follow what happened in China - as reported, the Chinese luxury industry experienced 70% or even 80% fall in traffic after the coronavirus outbreak there.

We know exactly that this is a difficult time for all jewelry companies - therefore we would like to help them survive the current crisis – while also improving and growing as a business.

Read more if you would like to know more about our CovPIRO-19 promotional package.

We’ve been preparing full steam for the New York Spring JA 2020 show when it suddenly got canceled due to the coronavirus threat. Actually, the other two shows, the MJSA and the Gem Fair were also canceled at the same time.

The downside of canceled tradeshows

So there was a definite impact for us, both on morale and possibly, financially – we were all looking forward to the show to finally introduce our new Gelior platform, which is a marketplace that connects all players of the jewelry industry, from suppliers to manufacturers to retailers to consumers.

The question I will try to answer in this post is: how long does it take for software investments, and in particular investments into business software, to pay themselves back? And how will this payback happen and how do we know whether an investment in an ERP software system was or will be the right thing to do?

Budget overruns used to be the most common issues during the software projects.

Research data shows that in 2017 over 65% percent of companies exceeded their implementation budget. This percentage was even higher in the previous year at 74%, so while it is an improvement, it is still staggering.

So why does this happen? Why can’t even large companies eliminate the uncertainity when it comes to bugeting? How can you control budget overruns? And are there cases where this should not be considered a problem?

From the moment when we stop managing our jewelry store on paper and start using a system, the question of integrating it with third-party systems becomes unavoidable in order to move data back and forth between those systems and ours.

There are many examples for what platforms your jewelry store or manufacturing management system might need: Rapnet, GIA, QuickBooks, pulling market prices for metals, exchange rates for currency, communicating with your shipping providers, customer relationship management system, your website or other websites like Shopify or Etsy, or different payment gateway integrations.

Have you ever met the problem where you couldn’t tell what raw materials or products you have in your inventory? Ever been in the situation whereby the time you collected all these information, they would be outdated because in the meantime other inventory movements would occur? Is it difficult to calculate the total value of your actual inventory? Or is it difficult to calculate how much raw material you will be needing for the production of your jewelry orders?

You can see from the previous questions that tracking your jewelry inventory is a complex problem. This gets particularly high importance in the jewelry industry because we’re talking about high-value items and materials. Whatever type of business may it be – manufacturer, retailer, wholesaler -, tracking your inventory is crucial.

A few months ago I attended the JCK Vegas show where representatives of the jewelry industry gather in a great number, along with many jewelry retailers. Being curious about how these retailers work at a tradeshow, I took a closer look at how they complete their sales and how they follow their inventory, so I talked to them and asked a few questions about this. What was very surprising to me was to see that most of them still do these tasks manually.

Nowadays, when there’s some sort of technology solution for everything, it seems odd that a jewelry retailer still hand-writes orders and invoices.

Implementing a jewelry software (or any other ERP) is a huge undertaking and inevitably comes with a certain degree of risk. For example, a recent study from an independent ERP consulting organization, Panorama Consulting, revealed that 28% of organizations reported their ERP implementation as a complete failure, resulting in an abandoned product.

This is somewhat surprising, as for most companies the risks are manageable if they are known ahead of time. Identifying problems that may arise and addressing them early will certainly help mitigate them before they become a point of failure for your project.

Some decades ago, in the sixties, just around the time when computers were about to be introduced in commercial service, people realized that these machines were pretty good for keeping track of inventories and estimating materials needs for manufacturing. This gave birth to the idea of Materials Requirements Planning – a collection of tools and methods for planning and managing materials for production.

Smaller jewelry businesses usually use different manual tools for tracking their processes: excel sheets, Google sheets, various documents, sometimes even pen and paper. As long as there is not a large amount of data that needs to be copied across these sheets and kept updated, this is fine and is (for the most part) convenient and cost-effective.

The problem arises when there are many people involved in the process or the complexity of the process increases.