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CBM $plans0oqary,lnc.

San Anlodo, Tr

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IIt seems that every morning we awaken to startling new advances in information technology, computer systems and communications. Yet every day the problems and opporrunities of running a business stay the same. In the rurmoil of information technology change we still must purchase and market with wisdom and provide services to customers that keep them as customers.

If we stop and look it is not hard to see the future because it is being formed today. The building producs industry is a mature industry with a high level of heritage and stability. The fascination with change is in many ways just that, a fascination. From that base we can sce that the trends which will form the funrre are being molded now both in the industry and in information technology. Some significant factors in both ofthese areas are:

(l) Centralization. There appears to be increased centralization of both markets and the scope of products and services offered in the building products industry.

(2) Commonization. Building products have always tended to be a commodity-based industry and centralization requires more "look alike" qualities that make it even more difficult to be different.

(3) Service. Customer service has always been touted and revered as a necessity for business success. The reality of what customer service is will become a necessity.

The traditional reaction to increased competition for customers has been focused in pricing or increased product availability. Both of these reactions have a direct negative impact on gross profit and the capital requirements for a business. Improved customer service is a goal that can be accomplished with remarkable economic efficiency. Fortunately, information technology in business can provide a practical and economical path to new levels of customer service. Unfortunately, the technology industry has the same centralization and commonization forces in play that could limit a specific company's ability to be different.

The implications that result from trends in both building materials and information technology could overwhelm us except for the fact that businesses are run by people. People are remarkably resilient and will adapt and even excel in the new opportunities that are presenting themselves. The reflection of this adaptation will be a decline in "techno-fascination" and an increase in the practical ways that information technology can serve the business.

Preoccupation with operating systems, languages, chips, networks and other technical matters will give way to functionality and how information can be used to improve business practices and customer service. We will, for example, be concerned with responsive pricing on quotes. and not so much on respon-',.: sive terminals.

Fortunately, the information services industry can provide these tools if we quit focusing on bits and bytes and start focusing on what companies really need in their business. Along those lines, there are several trends which information technology will not only support but cause to be fulfilled in the way we conduct business. Some of these trends are: t0 surviUUii:.i.ii.i'i..'.,:llllllllllllllllllllliii:::li:::l nificant being abler:i faster and, tfigtiffiig;i.! or being able: faster. or knoWr likely to respondi: appeal, is often enough."

(1) Vendor-Business Integration. Technology provides for systems to enhance vendor relations that will lead to more stable. longer term vendor relations.

These are scary days, but I cannot remember a time when the future was certain. The important thread is to wisely focus on the business and not be distracted by tools or hype regarding the importance of tools.

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veiyqg tn:rc., i sibsiaiatry ot ecx hc,, has been a technology iifCgrator and supplier ol complete oonpiter:,soI.rtians:;fer the building supply industry since 1074.

allet ready for Star Wcrs technology. Emerging technologies will be commonplace throughout the building supply and lumber industry for years to come.

It is important for building supply companies to take advantage of these new technologies by strategicglly implementing plans that utilize historical information. For example, in the 1980s more and more lumber companies rapidly expanded their businesses beyond anyone's wildest forecasting abilities. Eventually, there was a shake-out that dramatically affected both the East and West Coast. By the early 1990s, restructuring became the business staple for most companies.

Today, the industry again looks promising, and economists are forecasting consistent growth with low inflation, possible interest rate reduction, and new commercial construction on the rise. One might optimistically predict another boom before the turn of the century. However, this time around the building materials industry must arm itself with quicker, more accurate information to remain competitive.

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Rather than looking to survive, companies must implement technological advances to thrive. A good offense is better than a good defense.

Here are a few examples that one should implement now and as the technologies become more available in the next several vears.

" Credit Collection Database

(2) Customer-Business Integration. Information about customers and marketing that anticipates customers' needs can be supported with information systems.

(3) Business-Business Integration. The conflict between inventory levels and sales levels can be optimized for the company with information systems. In addition, information sharing can bring back team management with a common goal.

A solid building supply business should take advertising heed from the '80s and grow profitably. Your computer credit collections module should allow - G.A. Wright, lnc. you to not only place a credit limit within POS on the balance, but also provide you with a warning if the aging is past due on outstanding invoices. Your system should also serve as a tickler file to prompt you daily with a message to call people who owe you money. Computers today have the ability to store lots of data to enable you to have a strong history profile on your customer accounts. Average payments month to date, year to date, and two years running will help you identify your best customers and those who use you as a bank-interest free!

On-Line Faxing

Most software packages today now have the ability to fax transactions including quotes, orders, invoices, credit memos, and purchase orders without having to get in line to send a fax. An average fax takes approximately l0 minutes from the time the fax is sent and the receipt is acknowledged. Those who can send a fax from their terminal, work station or CRT save time since they never leave their work area (desk or sales counter).

Graphical User Interfaces (GUI)

More information at POS and within the back office via blown-out windows, highlighted descriptions, and split screens will empower your personnel to service your customers expeditiously. GUI is a friendly look and feel that will help the building supply industry navigate through a system more easily and quickly than ever imagined.

0n-Line Banking

Computers talking to computers are to take effect this year with most of the major banks. Hence, the "float" that contractors may take advantage of in current business practices may be a way of the past. Cash receipts and accounts payable will be electronically transferred on-line with computers with a debit to one bank account and a credit to another.

FIVE YEARS AND BEYOND: World Wide Web

llileOnens

WoodY\lare $prems, lnc. Mem$fs, Tn.

For more than 12 years, WoodWare Sysfems has yw*H solharu and tedndogy sddiors tutp niW< dtd buiding nate rials industry, especially for ompanies that pre-hang dws and nilwin&w wib.

TI echnology has allowed businesses and individuals to move in new directions at an increasingly faster pace. But technology just for the sake of technology usually doesn't make good business sense. There must be a business rcason and a financial justification for any investment, including investrnents in technology.

For many companies in the building materials and millwork industry, these technology changes arc requirements. Wholesale distributors of building materials and millwork who sell large retail chains, for example, are faced with business requirements, such as the use of EDI and barcoding, in order to continue selling to the chains.

EDI increases productivity and profitability.

EDI (electronic data interchange) is becoming an increasingly important business technology in the millwork atic Autornaliu,,,iS,,A*r0ffi':Hing used by retailers to inpiove syst€tts,h,,ffi 'b$orilg areas:

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Our kids today look at the Internet as a form of entertainment the way we once looked at television. The Internet connects you on-line to different databases and software programs. The World Wide Web is a technology that may be used in the building supply industry to: build more customer traffic. Picture having access to product catalog information on pricing, delivery and availability that would come from suppliers all over the United States, even the world. Your customers may place orders with you 24 hours a day. Your customers may be able to view and bid on open jobs all in one central database.

The information highway is here. Other industries, such as real estate and retail clothing, have already joined the Web. Don't be surprised if the fabric of your business adopts this technology in a big way!

Video Teleconferencing

If technology continues at the pace that we are all seeing, we will all be conducting business our PC work stations using an emerging technology called video i*j,:,ttii$titpi.i.iEeigq:.ta:i:tnffi,::to facilitate lapid ieimntd,fr rvry,t!0u,rutm$$tr,,

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(6) Customer tr@. io. .ie1'rfu,,Uuf .uvhil,, rvhen, how much a ,:ffiHrffi,tsttinm$.1n.:.11..1i.i...ii.i.i.i...ri:,',.,.

(8) Customer conffiFtioffiti :.,o=vj .iffllt a new f ashion ln.,ilreii,.rire,,to e,,ttemtF,itsfl|iffi r about an outstan@glba , ,. ' r:,,,

(9) Customer profiltn$,ffi.,iEl|iffi*. n conferencing. Several PC manufacturers are implementing video conferencing cards to allow users to not only talk to another person, but also see the person as you speak. Your sales people may be using their computer to negotiate on a job. and building material industry. Many large retailers are requiring their suppliers to use EDI for orders and invoices.

(10) Advertisins on fteifrtens!,,,',,1,.' ir.o,.iin r, ^r.

EDI is the computerized exchange of business documents. It is being increasingly utilized by companies to eliminate or reduce human involvement, to reduce order lead time, to improve accuracy and to reduce paperwork. EDI also helps to increase productivity, to reduce keying and re-keying of information, to improve customer service, to provide for faster payment of invoices, to reduce errors, and ultimately, to cut costs.

Another growing trcnd is the use of other means of electronic cornmunication between trading partners. Many millwork and building materials manufacturers provide interfaces for their distributors to electronically quote or place orders directly into the computers of the manufacturers.

Numerous window manufacturers have developed or are developing this type of application for their distributors and dealers. The trend is for more and more of these types of electronic ordering or quoting capabilities to expand in the future. Wholesalers and retailers should look for ways to incorporate these types of eff,rciencies into their business plans, too.

Barcoding

One of the best ways to achieve efficiency for building materials wholesalers and retailers is through the use of barcoding and data collection equipment'

Applications where barcoding provides significant imprwement in productivity and profitability include receiving, shipping, physical inventory, label printing, time and attendance and production and labor tracking' Independent Millwork Inc. has used barcoding and data collection to improve their inventory accuracy to better than 98.7Vo accuracy while reducing physical inventory count to a matter of hours.

Many retailers require their suppliers to provide accurate barcoded labels on all products sold and shipped to them.

Value-added products and services provide margin protection.

Another trend justifiably causing concern among companies at every step of the distribution channel is the trend iowards tighter margins. The retail chains are squeezing frorn one ind, and the manufacturers are squeezing from the other. The distributors are just plain squeezed as their margins grow thinner and thinner.

Increasing etficiency

Chd $chneller

Triad SyCtems Oorp.

Livermore, Ca.

With more'than 1,300 lumber accounts, Tiad is a leeiding applied, inlormation sysfems and services suppltier in North Ameica. The Hardlines & Lttmb:er,tDiiisionls team ol over 120 industry speciatigts is'bad<edtby 240+ cus' tome r se ruices, profeseion als, f\Vomputerizing business information has become essential for businesses which intend to stay competitive in today's market. c0mto five sleeker card inte-

One of the keys to survival for the distributor is adding value to their Products or their service caPabilities. If the distributor is primarily selling commodity products that his customer can also Purchase from multiPle sources or from the manufacturer directly, the added-value emPhasis must be on service excel- sales and service personnel, more convenient (for the customer) delivery schedules, and better information for order tracking, pricing and Products.

Today, lumber independents large and small are computerizing their operations to improve efficiency and itreamline operations, while utilizing sophisticated pricing tools to ensure that they maintain and grow the conhactor' specialty and d-i-y sides of their operations. During the nixt lO years, computers will continue to transform the lumber industry at an accelerated pace.

Service - a key differentiator.

Looking forward, service and selection will be key differentiatois, because products will be readily available from many sources, traditional and non-traditional, such as "virtual yards" or other suppliers outside of local or regional trading areas.

Computer technology will assist in providing superi-or service. For example, technology will make it easier for conftactors to check special order delivery dates, place fillin orders, or check job statuses at any of their favorite LBM suppliers from any remote site.

Twenty-four-hour servicing of their contractors will become a standard business practice and product information, in addition to training and business applications will be readily available via the Internet or delivered to the contractor from the LBM supplier on CD-ROMs.

ThiJ type of information can be easily accessible with quality computer software' The customer-first mindset -urt iorn"-from top management and be preached, believed and practiced throughout the organization to be most effective.

Computer solutions also add to profitability'

Al,ong with value-added products and services, companies can-add to their bottom line through the use of quality computer software for tracking inventory levels, improving purchasing efficiency, increasing inventory turns and prouiaing better credit controls. As companies plan for the futurl, computerized business applications designed specifically for their type of business are critical to their future success.

As companies seek software solutions, they should talk with companies similar to their own. The right software fit can bringgreat financial returns to companies, and companies who do not embrace beneficial technologies are likely to be left behind.

Consumers will also enjoy shopping on the Net for specific products and contractor services, too. In fact, an estimated 25Vo of the future lumberyard's d-i-y orders will arrive electronically, which would mean that these d-i-yers will buy products and services without ever walking into the yard!

Electronic supplier connections - partnerships on line'

Today, eleitronic data interchange (EDI) is providing "paperless" business document exchange for orders, order acknowledgements, price changes, promotion prices, receipts, invoices, item maintenance and catalog information. EDI will continue to evolve and become more valuable to our industry. We will see more and more businesses' operations become paperless and these.same businesses will ihare product availability information on-line with their customers.

EDI computer technology utilization and "just-in-time" ordering processet witl be the standard. Suppliers will work niore closely with lumberyards to provide exactly what they need, when they need it - including product assortments as well as quantities on hand based on market position, competition and customer buying patterns.

Computerized decision managemenl

Running a profitable business will become a more complex. challenge. To effectively manage operations, profitability management and progress monitoring decision support tools will be utilized.

Lumber dealers will use these tools to implement their business plan, and the "smart" system will monitor and report on performance progress against their plan. The system will report the exceptions on a regular basis, suggest changes to be made and optionally implement the desired changes. From stocking decisions, to employee scheduling, to targeted pricing and promotional plans, all key aspects of the lumberyard will have access to more information and utilize it to make better decisions.