August, 2004

Cool Tools

By Mary Shafer

Editor's Note: When the lumberyard I worked for first computerized in 1980, it was a big enough deal that the owner called a companywide meeting to explain the decision.

He understood that most of us were not happy about it, and that there was going to be a learning curve. But by God, computers were the wave of the future, and anyone who refused to ride that rocket with him could start looking for another job.

We thought that's what we'd be doing, anyway.

We'd heard the stories: One button would generate invoices, statements, and reports each month, which meant no need for Judy, Flo or the rest of the accounting staff. The craftsmen in our mill would be reduced to robots, executing instructions fed to an overhead monitor. On the front lines, it meant no more loading 14s when we ran out of 12s, ignoring a credit hold to help a trusted friend finish a job so he (and we) could get paid, or slipping an extra 5% to a loyal old-timer.

As it turned out, we were right and wrong. The computer did much of what we expected it to do, but it didn't eliminate judgment, skill, or people.

It did eliminate busywork, however, and that's both good and bad news. Common sense will tell you that eliminating non-revenue-producing activities leaves more time for making money. On the other hand, no one ever tracked the cost of the activities computers replaced, so it's difficult to accurately calculate your return on an investment in technology.

In that situation, a skeptic would say that the only way to justify the investment is if the return is an absolute no-brainer. Here are our choices. - Greg Brooks

Ticker Tape Buy them a couple of beers and many dealers would admit that, early on, they expected computers to provide the same amount of management information with fewer people.

Instead, the head count stayed the same while they were buried in information they'd never had before. Information is good; the problem is organizing it in ways that make it useful as a management tool. Exception reports have become a staple in the business, but they also generate solid revenue for both Excedrin and Lenscrafters.

The solution is to make the really important stuff easy to see. Business Advisor, from Austin, Texas-based Activant (www.activant.com), displays what it calls a "report card" of business performance in a graphic format, so dealers can track critical benchmarks in sales, inventory, and accounts receivable at a glance.

Users can perform "What if?" analyses, set alerts for performance metrics such as GMROI or DSO, and benchmark their company against cost-of-doing-business data from NLBMDA or the National Retail Hardware Association.

ECS Dashboard, a plug-in module from Greenville, S.C.-based Enterprise Computer Systems (ECS, www.ecs-inc.com), allows users to customize the information they extract from their Enterprise system or another database, and display it as charts, graphs, and tables.

Dashboard's security features enable custom reports for various positions. For example, salespeople get their individual sales and profit data; a sales manager gets an overview of sales productivity for a sales manager; while the GM gets an overview of sales, inventory levels, and DSO.

Windows-style "wizards" make it possible for users to define their own reports, but this is not a tool to be taken lightly. The not-so- old adage, "Garbage in, garbage out," still applies. There's a lot of data in your system, and if you're going to use it to make management decisions, you need to be sure you have the right numbers. Reports can also be defined through SQL by your IT staff, or ECS will create them for you.

So what do you measure? Whatever keeps you up at night: Is Megabuilders, Inc., really worth all the hassle they put us through? Did my speech at last month's sales meeting about selling the complete mix have any impact? Should I cave in and add that new window line? Am I really getting a payback on all the money I'm spending for computer upgrades?

Well, maybe not the last one.

Paperless Tigers
Will Rogers' famous comment about the inevitability of death and taxes (the difference being that death doesn't get worse whenever Congress goes into session) could have included filing, too. No matter how many tons of wood you move each year, you also move tons of wood pulp-i.e., paper.

That's why document imaging systems are gaining popularity so quickly.

"Our goal is to keep on growing," says Jackie Johnson, CFO at Racine, Wis.-based Big Buck Lumber. "The more you grow, the more paperwork you make."

Features vary depending on whether you use ECS's Document Management System or Activant's Document Imaging for the Falcon core system, but the concept is the same.

Document imaging systems perform two basic functions. First, they allow you to store your logo or other company information electronically, so you can print statements and other documents onto plain paper. That eliminates the need for preprinted forms.

Second, they organize and store documents so you don't need to print and file hard copies. Anything generated within your core system is fed to the document imaging module automatically; hard copies are scanned in manually.

You can retrieve those documents from any PC on your network, and search for specific documents by a variety of criteria, including name, date, type, or even words within the document. "It saves my people I- don't-know-how-many hours a day," says Cheryl Reckamp, systems manager at Yorkville, Ill.-based F. E. Wheaton & Co., an ECS customer. "It eliminates filing," not to mention the time employees spend digging through files when customers or vendors need backup copies. Inside sales manager Mark Schmidt estimates that document management saves each of his people an hour per day.

Moreover, says Johnson, an Activant Falcon client, "It allows for better customer service. You can put those employees to better use by eliminating hours of filing and paper processing."

Clipboard Jungle
The dispatcher's position has always been one of the most important in a lumberyard, and for good reason.

But it has also been as much an art as a science. Walk into 100 lumberyards and chances are you'll see at least 95 unique dispatching systems, ranging from clipboards to blackboards to logbooks to stacks of paper meticulously arranged in sequence across a desk.

Your delivery capacity should not be determined by a sudden gust of wind.

Dispatching software such as ECS's Dispatch & Delivery System works with both its own and most other vendors' POS software. Delivery orders are automatically fed into the system, where the dispatcher assigns them to available trucks.

Once the system is set up with information on your trucks, it compares the truck's capacity with the weight of each package to eliminate overloading. Combined with Microsoft's MapPoint® software, the system will also plan out routes for single or multiple drops.

Milwaukie Lumber, based in Vancouver, Wash., uses the system to handle deliveries for its three locations out of a single facility. "We do a better job of filling trucks and avoiding overlap," says dispatcher Alan Plunkett. "With more deliveries on one truck...we've been able to save a driver per yard."

Equally important, the system saves legwork. Salespeople can't assign or alter an order-a critical factor in maintaining the health and well-being of your sales staff-but they can check order status on the network. "They love having direct access to the information," says Gary Hudnik, systems administrator for Petaluma, Calif.-based Golden State Lumber. "Calls to the dispatcher have been reduced by 60%."

But maybe most important, the system gathers data. Says Scott McKinley, an area operations manager for Boise-based BMC West, "We can watch so much with this program: delivery productivity, manpower levels, load types, return times, and pending order status."

SIDEBAR: Back to Basics

Enterprise Computer Systems and Activant are by far the leading players in core systems for construction suppliers, and the LBM industry is only a slice of Activant's pie. Both offer comprehensive, feature-rich (to use the tech buzz term) software.

But what if all you need are the basics? Albany, N.Y.-based Spruce Computer Systems (www.sprucecomputer.com) has been around since the mid-80s, providing systems exclusively to building material dealers and wholesale distributors. Spruce provides standard package--point of sale, plus estimating and back-office accounting--for both miniframes and Windows networks. The company claims clients as large as $400 million in gross sales and the highest retention rate in the business.

But there's a new kid on the block too, at least at the dealer level of the channel. Vancouver, B.C.-based Progressive Solutions, Inc. (www.progressive-solutions.com) is well established in North America among forest products producers and wholesalers, and counts Weyerhaeuser, The Collins Companies, and Bloch Lumber among its clients. In the U.K., it has an established dealer base.

The company is just starting to target U.S. dealers, however, and offers an approach unlike any other systems provider in the business.

Its bisTrack is a Windows application that includes quoting, point-of-sale, inventory and pricing management, and general management tools. It does not cover back-office functions, though. Instead, it links to other Windows software: Great Plains accounting software, for example, or MS Access or Excel for data analysis.

According to the company, bisTrack's strength is a familiar Windows interface that makes it easy to use. In fact, the look, feel and functionality is somewhat like Microsoft Outlook, right down to a build-in to-do list for each user.