Knrh,su,rvival

Mike:Owens : , WoodfYare,Systems,, Ine,: Memphis, Tn.

For more than 12 years, WoodWare Syslerns has provided software and technology solutions for the millwrk and building materials industry, especially lor companies that pre-hang doors and mull window units.

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 reason and a financial justification for any investment, including investments in technology.

For many companies in the building materials and millwork industry, these technology changes are 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 profrtability.

EDI (electronic data interchange) is becoming an increasingly important business technology in the millwork and building material industry. Many large retailers are requiring their suppliers to use EDI for orders and invoices.

,..ll.is..,fiufo.matic Aulornali0n..|s,i oUn€ntJll'jb'ein g used by retail e rs to '....!rnnro,V6...sV.s,,ffi ..in,itiei.f ollswingareas:

..tl) lhventorv edntrol : .i., : ,..'...'.,,.II... ....t2l',',Uihit{hgii..reteiFt$..t0i'..vchdoic'::to facilitate "rapid (6$n-0nsel:inuentoty:]rexlen..islrmunt:,.:]

(3)::EleCtrbhic:,DaIa,lnterchange to move invoices, orOeii and, oth'er:. comm uniication ',!as! and with out papgl,:... ..,.....,.,'..,.,..'::.'...,::.,,':::''', :.:.:

(a) Giaphic:,design:ot eveffilng:itrom advertising to ngwpioduCts, :'..,,,, ,, , ,, ,, ,,:,,,:,,,, ., .,'

(5) |mpr0Vedl,:ofli0e.,.ef.{i0ieney:tifi0rn,,Wofd :,pto.cessing to intercompa,nf.U[[ent..SUW.dr..frdffirdtkS..,'.......',.'......':..:.i'

(6) Customei traCkihg to tell who buys,what, : when, how much anu,then,wr6is..i*.turniitt0.:iit.,.i.,'.ii...l,'rr:rir:','.',...i...',,:..

(7) Credit scoring, foi.charEe, abcount,apprual'., i,..

(8) Customer Commuhicatjoh :about,everything.!rofi a new f ashion in.'ihe!r:,i5f20.:.it0i.i.ai.itiiehdly..i,ien'lindEti aboul an outstandin$ balancb..'.' ::,:,:,:, ,,. ,, ,,. ,',,, ,,,,

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 trend is the use of other means of electronic communication 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.

If technology continues at the pace that we are all seeing, we will all be conducting business at our PC work stations using an emerging technology called video

(9) Customer profiling, and,new customeracOuisit[on (10)AdvertisinOonthe.,inteinU"'t",','''"i""it:,,,,,)nn*,n, electronic ordering or quoting capabilities to expand in the future. Wholesalers and retailers should look for ways to incorporate these types of efficiencies into their business plans, too.

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 tvoes of 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.

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 improvement 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 towards tighter margins. The retail chains are squeezing from one end, and the manufacturers are squeezing from the other. The distributors are just plain squeezed as their margins grow thinner and thinner.

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- lenCg. iriir,:,"'' This can come from better fill rates, more knowledgeable and helpful sales and service personnel, more convenient (for the customer) delivery schedules, and better information for order tracking, pricing and products.

This type of information can be easily accessible with quality computer software. The customer-first mindset must come from top management and be preached, believed and practiced throughout the organization to be most effective.

Computer solutions also add to profitability.

Along 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 proviOing better credit controls. As companies plan for the future, 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 bring great financial returns to companies, and companies who do not embrace beneficial technologies are likely to be left behind.

I

Increasing etficiency

Chad Schneller Triad Sysiems 06lp,i ,,, Liverrnore,Cai

W ith:, mote than' l;SQ4,:1vn1be r accounts, Tiad is'a, leadiig,.appl[qd',,irt6rmation systems and seruices suppller in North Ameica. The Hardlines & Lunber Division's team of over 120 industry specialists is backed by 240+ cus' tome r se ruices prole ssionals.

nWomputerizing business information has become essential for businesses which intend to stay competitive in today's market.

Today, lumber independents large and small are computerizing their operations to improve efficiency and streamline operations, while utilizing sophisticated pricing tools to ensure that they maintain and grow the contractor, specialty and d-i-y sides of their operations. During the next l0 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 differentiators, 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 superior service. For example, technology will make it easier for contractors 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'

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, electronic 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 share product availability information on-line with their customers.

EDI computer technology utilization and "just-in-time" ordering processes will be the standard' Suppliers will work more 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 management.

Running a profitable business will become a more complex challenge. To effectively manage operations, prof- itability management and progress moniioring 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.

Computer technology and information will drive change.

Computer technology and information availability will continue to drive changes in the lumber industry during the next 10 years. The industry itself will continue to become more efficient, and more business partnerships will be formed between the supplier and the independent lumberyard in order to win the contractors' and consumers' patronage.

The customer will be in the driver's seat. therefore, the independent who continually reinvents himself, anticipates real customer needs and exceeds customers' expectations, will be the true winner in our industry's transformation. I look for the next l0 years to be full of change and incredibly exciting!