September, 2005

Inventory Technology

With thousands—or millions—of inventory items to track, manage and re-order, savvy dealers enlist the aid of their technology partner to do it faster and better.

By Noelle Creamer

Managing inventory is a challenge for every building material dealer. The variations as to how products are bought, stocked, priced, sold, and shipped are endless. Software companies providing business management solutions for building materials dealers address these challenges with inventory management modules within their applications, and sometimes more. These modules aim to provide the data necessary for purchasing and sales departments to operate more effectively—and more profitably. Successful dealers use this data to analyze inventory trends and make adjustments in processes to power up their bottom line.

Here’s a quick look at inventory management tools from several leading software providers:

Activant Solutions offers two Windows-based solutions to lumberyards, the Activant Eagle™ and the Activant Falcon™ systems. Eagle is designed as a powerful, but easy to use, solution for lumberyards that don’t have full IT departments. Falcon is designed for large multi-location lumberyards and adds the power of relational database architecture.

Milford Lumber, Milford, N.H. uses Activant’s Eagle system to maintain proper inventory stocking levels and negotiate the best price from their vendors. Milford uses inventory alerts and order point features to maintain optimal quantity-on-hand. Scott Rosenthal, controller, says, "We add value to our customers by ensuring we have product in-stock, offering custom products, and operating with a high-level of customer service. Our Eagle system enables us to deliver these critical value-added services.”

Rob Vomund, segment marketing manager for Activant’s Lumber and Building Materials Group, says, "Inventory control goes beyond just keeping track of what sells and what stock is on hand. There are many ‘dots’ to connect when it comes to offering true inventory management. While others recommend the use of third party software tools for managing these key tasks, Activant has developed and integrated these key solutions into our products.”

He cites examples of Activant’s attention to these inventory-related areas:

• Supplier communications: Activant has extensive communications agreements with thousands of LBM suppliers including manufacturers, co-ops, buying groups, and distributors, enabling dealers to electronically exchange purchase orders, advanced shipping notices, and invoices.
• E-commerce: Activant offers: integrated e-commerce solutions, allowing dealers to seamlessly put live inventory information on the Web, without the need for transferring data files. This allows customers to view, edit or create quotes and orders, and track shipments.
• Delivery management: Activant offers fully-integrated dispatch and delivery software, which lets dealers maximize the use of their vehicles and staff, and ensures the correct products are delivered to the correct locations, on time.

Vomund adds that Activant goes beyond focusing on software and suggests changes to business processes in order that dealers may improve productivity. He says, "Many dealers find that their businesses have changed dramatically over the years, but their processes have not. Activant’s approach to working with dealers to change processes like inventory ordering, special order management, and delivery tracking creates a much greater return on the technology investment.”

And beyond inventory tracking software, Vomund says Activant offers tools that allow management to quickly analyze inventory performance and drill-down to key statistics. Use of graphical tools like Business Advisor (for Eagle) and the soon-to-be-released Performance Drive Suite (for Falcon) may result in gains in business performance.

For more information on Activant, visit www.activant.com.

Progressive Solutions Inc. provides technology solutions to wood products and building materials companies, focusing on the specific procurement, sales, inventory, and logistics management needs of wood products manufacturers and wholesale/distributors and building materials distributors/ dealers with domestic and export markets.

Because more and more building materials suppliers are offering value-added services and enhanced customer service and delivery options, Progressive Solutions’ bisTrack™ system was designed to integrate the purchasing and sales functions so that all states of inventory are known (uncommitted or available for sale, allocated, on-order, at third-party location, WIP, and coming in as a branch transfer).

According to Progressive Solutions, bisTrack offers the following benefits for efficient buying and inventory management:

• Inventory costs are lowered as better tracking allows you to stock less and replenish just-in-time.
• Faster order taking because sales people have inventory information at their fingertips.
• Multi-branch coordination enables viewing, transferring, and delivering of inventory to and from all locations to optimize inventory turnover.
• Centralized purchasing lowers operating costs.

Carole Randle, speaking for Progressive Solutions, says, "bisTrack tracks inventory by SKU, or in the case of lumber, by length or board foot. And, it supports the full range of wood products (lumber, plywood, OSB, engineered wood, manufactured products, etc.) in the units of measure in which they are typically bought and sold. Other generic packages really struggle with this.”

She adds, "With bisTrack, lumber tallies can be transferred to a sales order. And, the system supports ‘kits’ so that inventoried items can be packaged together, but still retain their item identification/costing/etc.”

Stockton Wholesale Lumber Company, Stockton, Calif., uses bisTrack to analyze its inventory and sales patterns. The information gleaned from bisTrack was used to fine-tune Stockton’s product line offerings, which resulted in reduced costs as they increased their turnover of engineered wood products. Randy Roget, sales manager at Stockton, says bisTrack makes them more efficient. "It’s easier to control our inventory,” he says.

"Those kinds of things save us money.”

For more information on Progressive Solutions, visit www.progressive-solutions.com.

DMSi’s president, Cal German, explains one of his company’s tenets: "Consistently superior service levels are one of the best ways pro-oriented dealers/distributors can distinguish themselves from the ever-changing mix of competition. And to do that, a strong distribution-oriented purchasing and inventory control software system is a basic requirement.”

He says, "Agility, from DMSi Software, is rooted in building material distribution and represents the hallmark of service-oriented inventory management for professional/contractor-focused dealers. With unique, deep features in nearly every functional area of a dealer/distributor’s operation (like branch transfers, shop order management, special orders, backorders, centralized production, sales and purchases, date-based material commitment, and more), Agility offers a foundation for superior customer service and efficiency, and as a result, profitability.”

Agility software, according to German, tracks items down to the lot, tag, or content level. Features allow you to query on units of measure, random lengths, squares, or other measurements specific to your business. You can also group inventory into relevant product classes for easy analysis of quick selling items, performance by vendor, seasonal demand, and more.

German says, "Typical DMSi customers see dramatic improvements in customer service and inventory control/ performance when transitioning from legacy retail-oriented inventory systems.”

DMSi reports to serve over 350 building product dealer/distributors nationwide with over 1,000 physical locations and sales that range from $2 billion at the high-end to as little as $2 million.

For more information on DMSi, visit www.dmsi.com.

Spruce Computer Systems, Inc. offers inventory control modules in both their SpruceWare and SprucePlus systems. Both modules are designed with a set of tools that continually maintain a total and accurate valuation of inventory and ensure the accuracy of quantities on hand. They aim to enhance cash management by showing stock levels and item activity, allowing managers to make informed purchasing decisions.

Spruce’s marketing director, Sarah C. Bell, says, "Spruce’s attention to special order items is important to many dealers now. The system tracks profitability and the life of a special order item. We give the item a unique identifier. This identifier remains in the inventory receipts file and inventory retention file so you can refer back and determine how much you’re making on special order items.”

Bell adds, "The system also makes it easier to make money on vendor non-stock returns by placing them in a resales file. Salesmen at any location can see what’s available to sell.”

Additionally, Bell tells LBM Journal that Spruce does do electronic data interchange (EDI) with all major co-ops, making purchasing simple.

Chuck Olson, president at Michigan Lumber says, "My turns and margins have improved every year consistently for the last three years. That stuff used to just slip by before I starting using a Spruce Computer System. Now it goes right to my bottom line… Can’t beat that!”

Inventory control features in SprucePlus include:

• Three-year inventory sales history
• Inventory cost and receipt corrections
• Inventory stock valuation reporting and inquiries
• Physical and cycle count software
• Vendor returns and discounts
• Barcode printing
• Special order labels
• Wireless devices for physical and cycle counts

For more information on Spruce Computer Systems, visit www.sprucecomputer.com.

Noelle Creamer is a freelance writer based in the Washington D.C. area. She’s been writing about the lumber/ building material industry for eight years.