Hangar 24 Craft Brewery
Hello IT Gets Brewery Profits Hopping
Hangar 24 Craft Brewery is a successful microbrewery in Redlands, CA that delivers to 80 Kroger locations weekly. Still a small company, Hangar 24 manually transmits data via paper invoices, purchase orders and shipping notices. Kroger, in contrast, uses an automated Electronic Data Interchange (EDI) system and penalizes its vendors $200 per transaction for non-EDI orders. The absence of an EDI system cost Hangar 24 a substantial $800,000 per year in penalties. Hello IT was asked to create a simple, affordable solution.
Hangar 24 uses a 3rd party application specific to the microbrewery industry to handle its billing and accounting. Hello IT identified an opportunity to expand the 3rd party application to accommodate Kroger’s EDI requirements.
Hello IT worked closely with the 3rd party app developer to adapt the program to meet Kroger’s EDI needs quickly and affordably. A subscription-based data exchange service was incorporated into the application and customized to Kroger’s reporting needs. The cost to implement EDI for the H24-Kroger partnership was $8,000 or 1% of Kroger’s projected annual penalty. In subsequent years, Hangar 24 will pay only the data exchange subscription cost at $3,200 annually, or 0.4% of Kroger’s potential annual penalty. Not a bad return on investment.
Two additional retailers require EDI compliance from Hangar 24, which will enable them to accrue even more cost-savings with their newly expanded EDI capabilities.