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Feature   May 1, 2009   by Andrew Ross

Time For A Technology Update?

Jobbers talk about what happened when it was time for them to update and upgrade.

Few initiatives drive fear into the heart of a business owner more than changing the computer systems that are so important to his business. Evolutionary change is rare; for some–maybe most–only when there is no alternative is a leap made.

There is no question that older computer systems lack the functionality and flexibility of newer approaches. New technology allows for greater capabilities and data tracking; they allow customers to connect with your business more easily; and they help your people to be more effective.

But those are just generalities. Specifics are where the real understanding of the motivations, challenges, and benefits of change can be really understood.

The Big Move: Colonial Garage & Distributors and APM Limited

For Doug Squires, who has a dual role as president of New Brunswick’s APM Limited and vice-president of its St. John’s-based parent Colonial Garages & Distributors, along with the crew and management of the 21 outlets, the imperative for change came in 2007.

“We switched on April 2, 2007. We now have the Activant Vision system. [Before,] we had that Eclipse system.”

Actually, they had two of them–and that was part of the problem. Parallel systems running at the Colonial operation and at the APM business (which was a Colonial acquisition in 2005) weren’t connected. This meant, for example, that Colonial’s stores in Sydney couldn’t directly check on stock at an APM store in Nova Scotia or New Brunswick. And then there was the issue of countertop technology.

“We had the old system for about 12 years, and part of the reason for change was that they used dumb-terminal technology, so there was no ability to interact with the Internet. You could run it through a PC, but when we first put in the system PC operations weren’t a consideration.”

Today, thinking about running a counter without the Internet or e-mail is tough to do, but that was the reality: 150 terminals hardwired into a closed system, cut off from the world outside, and divided into two families. With expansion on the front burner, it was time to make a change, and not just to improve connectivity.

“The reporting in the system was such that if I wanted to run a report on sales analysis, I’d have to run it after hours in the evening because it would drag down the system.” Squires says that the number of late hours that management had to spend running and poring over reports was increasingly seen as an issue, as was the fact that it could take a week to look at the details on only a few stores, and nearly two months to look at a report on every store once you factored in runtimes for those reports.

With the increased need to be more agile and get details on individual operations, it was no longer enough just to have a general idea of how things were going.

“And you could only load so many line codes, the memory was so limited. You had to be selective as to how the system was loaded.” On APM’s system, it wasn’t even possible to load all the information on the product lines they were actually carrying, never mind loading up competitive lines.

That is no longer a concern with the new system.

“The new system allows for more flexibility–three-data-point costing and better ability to copy things across to other warehouses. It has so many more capabilities that our old system didn’t have, plus we basically bought the code, so we can special-request whatever we want.

“Now in the middle of the day, it can run a report on anything I want–before I’ve finished talking about it, it has run.

“It allows us to adapt and react to changes in the marketplace more than the old computer did in the past. We can quickly identify and quantify if it is having an impact on us or not, and make the changes we need to.

“We have reports we run–sales by the day, gross margin, standard-type reports–but in the past, if I identified a brand that was fluctuating, it was difficult to investigate.

“Now I can quickly run a report and identify if there’s an emerging trend up or down so you could see something in particular line items. You can do a lot more comparisons between lines.

“The new system also gives us the ability to e-mail statements as PDF store invoices, and more capabilities, too. If we truly wanted we could become paperless.”

Paperless, and wireless, too. With the barcode module and handheld scanners, shipments are logged in as stock in minutes. This is important when you have customers checking your inventory at all times of the day.

“You can’t afford to have inventory sitting [in receiving] and not know it’s there. With the Internet, not only are the branches looking, the customers are looking. It’s all about information. If the data is there, the likelihood is you are going to get the sale.

“It could be as simple as I entered the packing slip an hour earlier than you did. I got the sale, you didn’t.”

The Evolution: Bumper-to-Bumper Edmonton South

Scott Strabel, owner-manager at Bumper-to-Bumper Edmonton South, has been running a Rinax system since October of 2002, but made the move to the X4 Windows system two years ago.

“The basic motivation behind it was, right from the get-go, that the new software was Windows-based.

“Before, there was never more information available on parts, but now one of the nice things is that, through Wrenchead, we can click on an icon and it will go right to the company’s website and bring up a photo of the part. That definitely makes identification easier.

“Sometimes customers aren’t good at telling you what they’re looking for and you’re guessing. Based on the part number, you can actually bring up a photo. Nine times out of 10 you’re right, but with a photo you can confirm it.”

He says that, while he’s certainly not ignorant of the effect that parts proliferation is having on the business, it was the consolidation of part numbers into new numbers that was causing real headaches.

“A lot of times our information would only have the old number. And there wasn’t a good way in the old system to see a substitution or a new part number to redirect the counterperson.”

The part was on the shelf, but under a different number. Such phantom “out-of-stocks” were increasingly a problem. “Some of our less skilled counterpeople wouldn’t have a good opportunity to get the sale out the door. Some people just don’t have the capability or experience to know that it may be in the store, but listed as something completely different.”

And, like every business owner, the need to know what is happening in his business now is paramount.

“One big thing that I really appreciate is the Crystal Reports. The folks at Rinax did a bunch of regular ones, but their IT department is fantastic at creating new ones that we seem to find helpful. They make it very easy to manage your fill rates, and you can manage your employees very well.

“I can track how many invoices by counterperson, the average dollar sale, by month, by day, by week, or gross profit by sale. From a management perspective it makes things very clear.”

Strabel knows, too, that a system that helps track inventory well is key.

“My dad has been in this industry for 30-plus years and he always taught me that good inventory management and control were the most important.

“The new technology has made it easier to track inventory turns and margins, and keep better track of inventory dollars–being able to easily key into what you should be stocking and what you shouldn’t be stocking.”

And, says Strabel, the flexibility of reporting made it possible (with a little assistance) to help a customer with his inventory.

“I was having a discussion last week with my salesperson about running a specific report to figure out what they should be stocking based on their sales. Within half an hour the guys [at Rinax] had the report figured, I handed it to the salesperson, and he handed it to the customer. It showed him exactly what he was looking for.”

Specifically, it revealed that the customer was keeping 24 filters of a certain number in stock. Considering they sold 100 of that number a year and had weekly replenishment, 12 would have been enough.

“Some of their inventory [capacity] could be used elsewhere. Before, you’d have to generate a sales report, do a whole bunch of long division, dividing by months and all this other stuff. Now you can do it in the click of a button in two minutes, and e-mail it to the customer.”

Strabel says that he particularly likes the graphing functions, which mean that he can profile inventories by demand throughout the year, not just average them out.

Beyond that functionality, he says that there are some real benefits in terms of human resource efficiencies.

Being able to connect to customers, for example, means that at least some of the business can be done without counterperson intervention.

And, while the current situation in his province of Alberta means that staffing issues aren’t as acute as they were at the height of the oil industry boom, the lessons have not been lost.

One specific area he has taken advantage of is putting together orders. Previously it was time-consuming to put together drop-ship orders and, as a result, he was seldom able to do so.

“It used to take half an hour to 45 minutes. We just couldn’t do it consistently. Now in a couple of clicks you have your order put together.

“We have our A and B movers moving better, and I have definitely increased our profitability on that as well.”

John Pedersen, president and general manager, T&H Auto Electric in Hamilton, Ont., is an admitted early adopter of technology.

He’s had a Blackberry for five years–which by aftermarket industry standards is very early–and made the move from a DOS-based DISC computer system to the Carrus Windowsbased system eight long years ago.

“Sometimes I get onto things too early,” he says wryly. “Basically we went from a DOS-based system to a Windowsbased system overnight. There were two of us that went on with Carrus first,” the other being R. K Buzzell in Moncton, N.B.

“We were on the ‘bleeding edge,’ as they say. We were somewhat of a guinea pig. We had six months of hell, but I saw the opportunity with the new system. It could do so much more than the old system.

“I almost hate to say it, but the bleeding was worthwhile. I wouldn’t trade it for anything.”

Like other jobbers, Pedersen is quick to point out the benefits of being able to run reports on a whim, though he does caution that it can become a bit of a hobby.

“You can see everything happening by the minute, but you have to be careful you don’t micromanage. You can see where you’re profitable and where you’re not”–no more waiting till month’s end.

“You can produce a financial statement at the push of a button. You can run the min/ maxes, order points, etc. and so much more.”

One interesting aspect is that they can now run promotions and contests paperlessly, with no more need to record sales or purchases separately.

“We’re running contests and we can run a program to record it. We don’t have to go through paperwork, orders, and invoices anymore.” Say goodbye to end-tab promotions. “Basically we have eliminated killing trees. It’s all on the drives.”

That paperless approach has extended across the organization, and is all part of a while new approach the company is taking. “It just allows you to do so much more, faster and more efficiently. All these tools that you are using today are to help you run your business better. The bottom line is to be more efficient.”

Yet, even with the dramatic improvements possible in reporting, Pedersen says that the biggest advantage is connecting to your customers and suppliers.

“One of the things we are finding in going out to the shops to set them up to deal with us is that they may not have had computers and so they don’t know what they need to do,” he advises. “It’s all about setting up the parameters and then it will work for you.

And, he says, any jobber who is not connecting to his customers is at risk of losing them.

“We have actually put all of our counter-people on the Web. It has created an endless catalogue in reality. Every station is on the Web, too; you have to control where they go. I would say that’s the biggest thing,” from his experienced standpoint.

“You had better get your customers connected to you, because if you don’t your competition will. Don’t tell me you’re thinking about it,” he challenges jobbers. “You had better be doing it.

“A lot of people have good infrastructure and good inventory, but you have to make it accessible to your customers in the easiest way possible.”

Whether you’re coming from the oldest computer system imaginable, or still learning the capabilities of a piece of technology so new the wrapper is still on the owner’s manual, the journey toward continuously improving your efficiency and your connection to your supply chain partners and your customers is one that should never stop.

The answer to the question “Time for a technology update?” is, and always should be, simply, “Yes.”

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