NIKO
ERP Platform Supports Manufacturer’s Rapid Growth & USDA-Organics Success
CUSTOMER PROFILE
Niko manufactures Canadian-made, branded and private-label skincare, haircare, makeup and pet products that are better for people, their pets and the environment. Niko grows many of the botanical ingredients for its USDA-Organics certified ORGA-NIKO and private label products in its 40-acre forest in northern Ontario.
- 16 employees
- 6,000 sq. ft. manufacturing plant (15,000 sq. ft. plant under construction)
- Up to 1,600 raw materials
- 1 to 80,000 units per order
- 1,500 + customers
- Sells and ships to North & South America, Europe, Asia
SOLUTION
Mar-Kov Batch Control & Inventory Management Software
CHALLENGES
- Prepare and plan for rapid growth
- Time-consuming, manual data entry & management
- Inaccurate, inaccessible data
- Readiness for random & scheduled USDA-Organic audits
- Unable to record and use lot numbers
- Manage inventory and formulations
RESULTS
- 6-month ROI
- 6Xs growth in 10 years
- 50% less time on data entry, admin & calculations
- 99% automation of data entry & calculations
- Successful, stress-free USDA-Organics audits
- Accurate, searchable centralized database
- Trace finished products back to raw materials by lot number
- Secure, accessible searchable formulations
After Niko’s first big growth spurt back in 2015, managers turned to Mar-Kov’s ERP to get the transparency required to run a successful business and the traceability demanded of a USDA-Organics certified manufacturer.
“The faster we grew, the more we needed an ERP platform to provide the data that’s essential to us as a manufacturer and handle lot numbers, a critical USDA-Organics requirement,” says Mario Henriques, vice-president, Niko Cosmetics, Toronto. “It would be impossible for humans to do what Mar-Kov now does for us!”
With Mar-Kov as the single source of truth, managers in every department have access to the data they need to handle their respective operations. As importantly, whether the managers are chemists, accountants or production managers, they’re all using identical data they know is accurate.
“Mar-Kov is a reliable platform that’s an integral part of how we manage and run our business – spreadsheets just can’t handle Niko’s volume or complexity,” says Susan Lu, general manager. “Its tools helped us make our processes more efficient.”
Mario Henriques
Vice-president
Niko Cosmetics,
Toronto
Susan Lu
General manager
Niko Cosmetics,
Toronto
Automation Boosts Efficiency, Ensures Accuracy
Mar-Kov automated up to 99% of the data entry and essential calculations which had become more error-prone and labour-intensive as volumes grew. Automation cut the time people spent on data entry and calculations by more than 50%. And Niko no longer needs a full-time data entry clerk now that the individual departments handle the remaining 1% of data entry and calculations. Operators identify the ingredients used, record the information manually and Mar-Kov tracks how much they used in each batch. Mar-Kov automatically creates and saves electronic inventory updates and batch records.
“Mar-Kov paid for itself in six months by automating so much of the manual repetitive, time-consuming and error-prone calculations and data entry and improving overall efficiency,” says Susan.
Stress-Free USDA-Organics Audits
Niko knows employees’ instant access to accurate, searchable data and lot number capabilities make random and scheduled USDA-Organics audits the easiest they’ve ever been. Mar-Kov assigns a lot number to each raw ingredient, each intermediate product and each finished product. It also tracks where each lot came from before arriving at Niko, as well as where Niko shipped each finished lot. Niko’s electronic records allow it to physically trace its finished products back to the raw materials by lot number in minutes.
USDA-Organics may want to know who supplied the ingredients, when they were received, what was consumed, the best before date, and much more. All of that data is readily accessible in Mar-Kov’s centralized, real-time database.
“Audits are stress-free with Mar-Kov which shows USDA-Organics exactly what we did and when,” says Mario. “We’d never failed an audit, but they were a challenge, and we knew that eventually our Excel paperwork would be trouble.”
Data Facilitates Operations & Control
Of course, detailed data is essential to USDA-Organics audits, but it also plays an important role in daily operations, from inventory to production and fulfillment as well as quality. Mar-Kov automatically enters the relevant data into the central database, which eliminates manual data entry errors and frees up employees’ time.
Because Niko connected its scales to Mar-Kov, the ERP updates the volume of raw material left in the source container after it was weighed out for production. As a result, Niko managers know whether they have the raw materials required to fill an order or if they need to restock. Inventory levels are always current.
The system also alerts Niko managers to inventory and production discrepancies. If the formulation requires 10 kg, but the scale shows the package is either 9.6 or 10.9 kg, employees adjust the raw ingredient accordingly. Likewise, employees decide whether to reconcile any discrepancies with suppliers.
Formulation Formulation Security & Integrity
Formulations are at the heart of Niko’s success and Mar-Kov protects the integrity of those formulations. It keeps a historical account of every change, including employees’ names, the dates and times. As importantly, Mar-Kov can be set up to require at least one approval or sign-off before accepting a formulation change.
Because the formulations are integrated with Niko’s weigh scales, employees can proceed with production only when the quantities measured out for each batch match the formulations exactly. If customers have questions about product consistency and quality, Niko relies on Mar-Kov to show them exactly how their batch was produced.
“Mar-Kov controls inventory, formulation and production accuracy for us,” says Susan. “Mar-Kov’s ability to prevent costly batching errors will be even more vital at our new facility where the 5- to 10-fold capacity increase translates to potentially greater losses.”
QuickBooks Integration Supports Growth
As Niko grew, the company had to streamline its bookkeeping and financial management to better manage the massive amount of data. Niko’s new platform had to have cost-of-goods sold capabilities, support multiple currencies, and work with QuickBooks.
Niko got it all with Mar-Kov. The ERP pushes data to QuickBooks and compares inventory asset account totals for items tracked in Mar-Kov with the current account values in QuickBooks. It then adjusts the values in Quickbooks accordingly.
In addition, Mar-Kov automatically calculates the cost of goods sold. It uses the price of each raw ingredient lot, the amount of raw ingredient used in each finished product and the labour and operational costs. That critical cost of goods sold is available to Niko management at any time. Likewise, Niko can use Mar-Kov to find out how much it would cost to produce a new formulation. Mar-Kov can use historical pricing and has other options if the formulation includes an ingredient that’s new to Niko.
Mar-Kov, which now integrates with Quickbooks 2023, automatically converts any currency to the users’ preferred currency. Users manually set up the internal currency conversion rate which is selected based on the invoice date. As a Canadian company, Niko operates in Canadian dollars although it regularly uses US dollars. Whether Niko pays for goods or receives payment in US dollars, Mar-Kov converts it to Canadian at market rates.
“Mar-Kov and QuickBooks are a 100 times better for us and accounting is a lot easier,” says Susan. “Integrating Mar-Kov and Quickbooks was worth it because we couldn’t run our growing business with Excel and QuickBooks as two standalone systems.”
