Heightened competition exists in almost every industry. Technology has emerged as one of the tools to help companies stay competitive and gain greater market share. Take Colonial Building Supply (Centerville, UT), for example.
This building supply and home center store has implemented a number of technologies including point of sale (POS), automatic identification and data collection (AIDC), time and attendance, and accounting systems to improve its operations. Mat Johnson, systems manager for Colonial, is also examining adding radio frequency data collection (RFDC), mobile laptop computing, and electronic document management technologies for the future.
"Companies are searching for greater productivity gains and technology plays a key role in obtaining these gains," says Randy Faris, president of Dimensions Software, the value-added reseller (VAR) that sold Colonial the products. "The building supply industry has been quick to embrace technology because it has business problems that need solved."
According to Johnson, only 10 years ago lumberyards used to run by the "seat of their pants." "Managers used to go out into the lumberyard and determine inventory amounts by eying up the stacks of lumber," he explains. "When chains like Home Depot and Lowes moved into town, they had sophisticated computer systems that monitored inventory levels and reordered stock. As a result, these larger, more-efficient chain stores captured more market share and drove product margins down for smaller, independent stores."
Inventory Control Key To This Vertical
In order to remain competitive, Colonial needed the technology to provide it information about inventory levels and customer buying trends, but their existing computer system could not provide this, says Johnson. "One of the biggest challenges lumberyards face these days is that lumber is a commodity and the prices fluctuate daily - sometimes hourly. Lumberyards want to have a lot of inventory during low price periods to meet customer demand, and they don't want to be overstocked during high-price periods."
Old POS System Left Little Room For Expansion
"Our old proprietary computer system had reached its capacity of ports. We could not increase the number of registers or add any more peripheral devices - without requiring a significant investment," says Johnson. "We wanted to add handheld data collection units to the system. These units would allow us to remotely collect information on inventory levels."
This led Johnson to begin seeking out a new point of sale and accounting system for their operations. After examining a number of systems over a three-month period, he chose Dimensions Software, the VAR that had sold them their existing system. "We chose Dimensions primarily because they were the only company that offered handheld units that integrated with the POS system," says Johnson.
Planning For A New System
At the time of the decision to adopt a new system, Colonial was moving to a new building. "Dimensions helped us design the store and lumberyard to gain greater control over the point of sale," says Johnson.
The new system included: an IBM Pentium server with 25 IBM and Wyse terminals; an Oasis station; Ithaca Peripherals receipt printers; Ultimate Technology pole displays; Digiboard communication ports; Exide Electronics power protection; and Percon bar code scanners, handheld data collection units, mag stripe readers; and Dimensions' software. The complete hardware and software solution was installed in about five days.
The New Integrated System At Work
The Dimensions software ties different functions together under one system: point of sale, accounting, inventory control, security, time and attendance and truck scheduling, says Faris. Each employee has a user name and password that allows him access to designated menus on the system. For example, cashiers can not access or see the menus for accounting. This password access also helps track employee time and attendance. Information about the time an employee logs into and out of the POS terminal is sent to the payroll system.
The software also performs inventory control functions. Items are deducted from inventory as they are purchased. The software can be customized to examine past buying patterns and future business conditions to automatically determine amounts for reordering, says Faris. For example, if building permits are up 20% for the year, the system will order more inventory. The software has purchase orders that are sent straight to a supplier from a computer modem. The handheld data collection units are used for inventory counts. Johnson explains that each department will do checks to make sure that the actual inventory matches the amounts listed in the computer.
Training For The New System
"Moving to a new system was a pretty big scare for our employees.," says Johnson. "Our fears were calmed because the system was very easy to use. The system has six ways an employee can look up an item such as lumber: manufacturer number, catalog number, inventory number, type of wood, type of cut, etc. Keyword functionality was also added. So, we can type in the word 'plywood' and all of the different types of plywood appear on the screen," he explains.
New Technology To Be Added Down The Road
Colonial is presently looking to add RF-based handheld computers from Percon to their operations. "With our present handheld data collection units, we can only collect so much data in a batch mode before a unit needs to be downloaded to the computer. RF units collect information and transmit it to the computer automatically," says Johnson.
He is also looking to adopt the mobile laptop computer solution that Dimensions offers. Faris explains, "Lumberyards have outside salespeople that meet with contractors at construction sites. A laptop plugged into a cellular phone would allow the salesperson to tap into the store's computer and check availability of products and process an order - without ever having to return to the office."