Nanoleaf boosts productivity by 33% with Dynamics 365 Business Central

Optimizing for extraordinary customer experiences

Canadian technology and consumer IoT company Nanoleaf is creating innovative smart home solutions that transform ordinary experiences and spaces into extraordinary ones. Its vision is to usher in a new era of the smart home that centers around complete personalization. Founded in 2012 by three engineers, the company now has a diverse team of passionate problem-solvers and a global presence with offices in Toronto, Shenzhen, Paris, Hong Kong, and Manila. “Our global growth has been both purposeful and organic. Over the past five years, we’ve evaluated market opportunities methodically and developed local capabilities (staff and assets) to position us to service those markets competitively,” says Paul Austin-Menear, Vice President of Commerce Operations at Nanoleaf.

The company’s finance team is comprised of roughly ten full-time employees who integrate finance and supply chain operations. The team is instrumental in defining resource plans, including the materials, funds, and staff, needed for business operations, allowing them to prioritize opportunities and strategic development. “A key business philosophy for us is that optimizing for the customer experience, whether wholesale or individual customers, in our supply operations will afford us a competitive advantage,” says Austin-Menear. “As such, we take great diligence and care in building local capabilities in each geographic region we enter. Today, our supply chain operations are active in a dozen distinct geographic areas which serve customers in over a hundred countries.”

Separate systems and stockouts

The finance team’s original accounting system was modern and well-designed, but the global expansion meant that Nanoleaf had outgrown the technology. “The SaaS solution was really meant for small businesses with a part-time or contract bookkeeper. It didn’t meet the needs of a global organization operating as a group of companies,” says Austin-Menear. The accounting system was fragmented, using three different systems designed for three different regional compliance and reporting requirements. Inventory records were not all kept in a uniform accounting ledger. Properly valuing inventory on the ledger was a laborious task and highly prone to human error.

The fragmented and manual system made proper budgeting and financial planning challenging. “We struggled to adapt quickly to changing market or operational conditions. Stockouts were common,” says Austin-Menear. Stockouts meant that it would take longer for customers to receive their products and made it harder for Nanoleaf to forecast future orders and revenue. Nanoleaf decided to source a new solution to better serve customers and its business.

An aggressive deployment for an extensible system

The company had three options: continuing to use a patchwork of industry software, building their own, or using an established ERP (enterprise resource planning) system. Nanoleaf chose an ERP system because it could integrate their finance, supply chain, forecasting, and business management parts of the business in a relatively quick timeframe. “We looked for a system which could be customized by us, for us, so that it could be shaped to meet the unique needs of various teams,” says Austin-Menear. “At the same time, we wanted a system which had appropriate design constraints and controls in place to help keep us in compliance with common accounting standards under the International Financial Reporting Standards rules.” The system would also need to provide more granular insights into the supply chain and real-time data that could support the company’s global expansion.

After considering their options, the company chose Microsoft Dynamics 365 Business Central as the solution for its new system. Dynamics 365 Business Central offers advanced financial control features necessary for growing a business, all within a system that is flexible, intuitive, and customizable. “Dynamics 365 Business Central is much easier to customize than competing solutions we evaluated, which led us to high-value process automation more quickly,” says Austin-Menear. Nanoleaf deployed Business Central throughout the entire company (apart from in the People’s Republic of China, where Dynamics is not yet licensed for sale by regulatory authorities). “The extensibility of the technical architecture of Dynamics 365 Business Central was a big selling point for us,” says Austin-Menear. The Dynamics 365 Business Central Shopify integration and the fusion of supply chain and finance data in a single system were two other deciding factors. “An unexpected benefit of working with Business Central was the ability to grow into the Microsoft 365 ecosystem and uncover a lot of productivity value via Power Automate and other Microsoft integrations,” says Austin-Menear.

The timeline for deployment was aggressive, with each region completing implementation and training roughly four months from start to finish. Nanoleaf worked with MNP Digital, a Canadian digital services and consulting firm, as well as a Microsoft Partner, for implementation. “Working with the MNP team was exceptional. They provided a viable implementation plan and were extremely flexible in how they integrated with our teams,” says Austin-Menear.

Obvious improvements with automation

Since deploying the platform in 2022, Nanoleaf has been able to customize Business Central to its specific needs, from streamlining operations with job queues that organize, track, and process orders to keeping track of inventory by adapting user interfaces for dropship and marketplace operations, where Nanoleaf ships orders directly to third-party retail customers upon demand. Real-time data on product sales and inventory levels help employees manage the supply chain more effectively and reduce opportunity costs resulting from overstock and out-of-stock events.

The company has also seen a 33% productivity improvement in its supply chain operations as it uses process automation to free up labor hours for its employees. For example, if it took an employee five minutes to process one dropship order manually, automation cuts the amount of time by 33%, which offers meaningful improvements on a yearly basis. “Some companies save money by developing this type of process automation through layoffs. For us, the story is different. Process automation gives our team more time and space to focus on creative problem solving and being proactive by eliminating menial, repetitive data entry tasks,” says Austin-Menear.

Before, a logistics staffer had to address stockouts and split shipments manually, now Nanoleaf can proactively perform advanced fulfillment routing and automation that was previously reactive. Austin-Menear says, “We have now automated much of this with codeunits that our team developed for routing along quality and cost-optimized business rules.” 

Codeunits in Business Central are containers for AL code that you can use to implement the business logic that exchanges information between a database and user interface. The finance team can use the time previously spent on manual tasks for financial planning and cashflow management, which has become more effective as a result. Additionally, Nanoleaf has also applied machine learning tools from Azure into forecasting, holding the promise of eventually generating demand and supply forecasts with significantly less staff time.

The future of automation

Given the success of the Microsoft deployment, Nanoleaf looks forward to continuing to implement AI like sales and inventory forecasting and late payment prediction. “We’re very excited by the opportunities which near-future innovations from Microsoft hold for our business,” says Austin-Menear.

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