Imagine the following scenario: your town is hit by a serious storm. Your equipment is damaged, roads are closed, and local authorities still haven’t restored power. As if that weren’t bad enough, you have customers 20 miles away who want to know where their deliveries are and why nobody is answering the phone.
The hours and days after an emergency are make-or-break moments for a business. Everything hinges on continuity: how quickly the operation resumes critical services. Crisis or no crisis, customers need to run their businesses. Late deliveries and missing orders are heavy blows to a vendor’s credibility.
Most businesses worry about how a disaster might damage their physical assets. But they’re overlooking the most vulnerable part of their operation: data. Buildings can be repaired, equipment can be replaced. But if sales and inventory records disappear, everything comes to a screeching halt.
Think this doesn’t apply to you? Go through the following scenarios and think about how long it would take your business to resume operations:
1. A fire destroys your office, including your server, computers, and paper files. You have no information about open orders, including the ones that need to be delivered in the next few days.
2. Heavy flooding closes all the roads for several days. Local customers are calling their reps, wanting to put deliveries on hold. Customers outside the area need to be notified about the delays. But because nobody can get to the building, there’s no way to access open order records or find out which customers need a call.
3. A hacker pretends to be a customer and emails Accounting with a question about the attached “invoice.” When an employee opens the attachment, it unleashes a virus that tears through your system. All your sales, inventory, purchasing, and accounting records are hopelessly scrambled.
Maybe you’re shrugging off these specific examples: you don’t need to worry about fires, floods, or email viruses. The point is business data can be damaged or lost, just like your other assets. And losing that information is devastating to an operation.
Fortunately, there are steps businesses can take to protect their records. One of the best ways to reduce risk is to move data from a private server to the cloud.
Here’s how cloud-based solutions work: businesses rent space on a giant server in a remote location. They save their business data here and access it through the internet. So when a rep creates a sales order or an accounting clerk prints an invoice, those records are saved on the remote server.
When it comes to business continuity after a crisis, cloud solutions provide several advantages.
1. Your system is safe even when your hardware isn’t.
Let’s revisit the fire scenario. If all your sales information was saved on the office computers, those records are gone and operations stop. On the other hand, if your software platform is in the cloud, it doesn’t matter what happens to the office computers. Your system is unaffected, safe on those remote servers. As soon as you plug in a new computer and connect to the internet, you’re back up and running.
2. Businesses can access their data almost anywhere.
Many private networks can only be accessed locally. In other words, if all your data is on the company server, you need a computer at the office to access it. Data in the cloud, on the other hand, isn’t tied to a local network. In fact, it can be accessed from any computer connected to the internet. So if roads are closed and you can’t get to your building, employees can set up shop in a warehouse or even log in from home.
3. Data in the cloud is much, much safer from cyber-criminals.
Some people have a hard time believing this. Using someone else’s hardware over the internet feels risky to them. In reality, private networks are much more vulnerable to attacks. Let me explain why.
Most businesses only use one tool to protect their networks: a firewall. Essentially, they put a big lock on the front door and call it good. But the door can be unlocked if employees do things such as open infected emails. Once a hacker sneaks inside, he has access to everything on the network.
Cloud-based solutions have giant locks on the front door and all the internal ones as well. In addition to firewalls and anti-virus software, they have cyber-security professionals constantly monitoring for threats. So even if a hacker sneaks through the front door, he has several more layers of security to get through.
Going Forward
When you are aware of your vulnerabilities, you can come up with strategies to mitigate them. Too many businesses ignore the importance of and risks to their data. If you are unsure of how quickly you could resume operation after a disaster, it’s time for a serious talk with your management team. You may never face this worst-case scenario, but you’ll sleep better at night knowing your business is prepared.
This article originally appeared in National Hardwood Magazine.
DMSi would like to recognize its customers that made the 2015 ProSales 100. This industry list names the top 100 professional-oriented lumberyards and specialty dealers in America. Companies are ranked by their dollar value of sales to the pro builder market, based on information submitted in the 2014 ProSales 100 survey. Congratulations on your success!
#11 SRS Distribution Inc.
SRS Distribution Inc. is an industry-leading family of independent roofing supply distributors. They have proven themselves to be one of the nation’s fastest growing building supply companies. They have 130 locations and 1,600 employees across the United States. SRS Distribution did $1.2 billion in total sales during 2014, a 28% increase over the previous year.
#12 Roofing Supply Group
Roofing Supply Group has been catering to roofing contractors for over 30 years. They carry residential roofing products, specialty tile, decorative stone and decking products. They have 75 locations and 1,188 employees. Roofing Supply Group did $1.1 billion in total sales during 2014, a 12% increase over the previous year.
#29 Erie Materials Inc.
Erie Materials has been delivering high quality building products for over three decades. They have grown into one of the largest distributors in upstate New York and northeast Pennsylvania. They have ten locations and 340 employees. Erie Materials did $181.7 million in total sales during 2014.
#40 Professional Builder Supply
Professional Builder Supply focuses on providing local, high-quality building materials to contractors throughout North Carolina. They have six locations and 176 employees. Professional Builder Supply did $134 million in total sales during 2014, a 12% increase over the previous year.
#47 Builders Supply Company
Builders Supply Company serves residential and commercial builders in Omaha, Nebraska. Offerings include lumber, roofing, siding, drywall, windows, doors, trusses and design services. Their 36-acre campus includes the largest lumberyard in the Midwest. Founded in 1951, the company has one location and 240 employees. Builders Supply Company did $115.0 million in total sales in 2014, a 10% increase over the previous year.
#54 McCray Lumber and Millwork
McCray Lumber and Millwork carries a wide variety of building supplies for professional contractors, from decking materials and siding to windows and trim. Family-owned and operated since 1910, the company has six locations in the Kansas City area and 210 employees. McCray Lumber and Millwork did $105 million in total sales during 2014, a 22% increase over the previous year.
#76 Cassity Jones, Inc.
Cassity Jones, Inc. is a leading dealer to pro builders in Northeast Texas. The company’s offerings include lumber and building materials, millwork, flooring and equipment rentals. Family-founded, owned and operated since 1950, Cassity Jones has 20 locations and 156 employees. They did $53.7 million in total sales during 2014, a 10% increase over the previous year.
#80 Christensen Lumber Inc.
Christensen Lumber Inc. provides professional contractors with building materials, millwork and cabinets. Founded in 1923, the Nebraska-based company has become a major force in the Omaha building market. Christensen Lumber has two locations and 198 employees. They did $51.0 million in total sales during 2014, a 16% increase over the previous year.
#86 Texas Plywood and Lumber
Texas Plywood and Lumber has been supplying professional builders with doors and millwork for over 50 years. They continue to grow and innovate their business with technological advances in customer self-service. Texas Plywood and Lumber has one location in Grand Prairie, TX and 141 employees. They did $42.06 million in total sales during 2014, a 20% increase over the previous year.
#96 Harbin Lumber
Harbin Lumber serves professional contractors throughout Georgia, South Carolina and North Carolina. They offer an enormous catalog of interior and exterior building products, manufacture trusses and EWP, and offer installed services. Founded in 1917, the company is in its fourth generation of family ownership. Harbin Lumber has five locations with 129 employees. They did $34.2 million in total sales during 2014, a 23% increase over the previous year.
Customer surveys are a great way to get closer to your customers. If you know what their priorities are and take steps to answer their needs, you can out-serve the competition.
Like any tool, however, surveys can be misused. Poorly designed questions and methods yield misleading information which is then used to justify bad strategies.
Here are a few tips to ensure your surveys deliver valuable, accurate feedback.
DO
Build a list. Instead of giving surveys to all your customers, focus on those you’d like to build long-term relationships with. (This may be based on revenue, cost to serve, payment history, types of products purchased, etc.) Even if these aren’t currently your biggest accounts, you’ll get more value by prioritizing their needs.
Keep it simple. The longer your survey gets, the less likely people are to complete it. Avoid the temptation to ask about anything and everything. Your goal should be to find out one or two key issues.
Collect both quantitative and qualitative information. Quantitative answers (e.g. rating scales) are easier to analyze and let you see trends across the group. Qualitative answers can give context and insight into those trends. Here’s a basic example:
1) When it comes to choosing a vendor, what are your top 3 most important criteria?
__ Products are high-quality and in-stock
__ Orders are filled quickly and delivered on-time
__ Sales/service staff are knowledgeable and helpful
__ Back office services are accurate and efficient (invoices, returns, etc.)
__ Prices are low
__ Other:
2) As your vendor, how could we help your business be more successful?
These are fairly generic prompts. You may want to adjust the questions and answer options based on your customers and business.
DON’T
Accept a low response-rate. Say you survey 400 customers but only 10 people respond. It’s risky to assume that those 10 people have the same ideas and opinions of the other 390. Before you send out your survey, decide how many responses you’ll need to feel confident about the results. If you don’t hit this number the first time, then make a second or third effort at collecting that feedback.
Ask complicated, leading questions. Avoid confusing your audience or putting words in their mouth. You will not get useful information from a question like, “Explain how we deliver the best service of any other vendor similar to our size and market.” Again, keep your questions and answer options simple.
Rush to judgement. It’s easy to misinterpret survey results. For instance, say your customers rate you low on “service quality.” You may assume this is a complaint about your sales staff. Your customers, however, are just irritated about all the late deliveries. Consider all the possible meanings of your results before taking any course of action.
Whatever your results, remember they only represent one piece of data. The more you know about what your customers value, the more you can align your business with theirs. If you can deliver on the elements they care about most, you’ll have a major competitive advantage.
DMSi provides an end-to-end software system for hardwood lumber companies. Our Agility ERP brings accounting, sales, purchasing, and operations into one system. This saves our customers a great deal of time, reduces costs, and improves accuracy. We want to bring every part of our customers’ operations into a unified system, from the warehouse to the shop floor to delivery to their customers. This is why mobile tools are a priority for us in 2018.
Mobile apps are more than a trendy gimmick. They provide our customers with real competitive advantages by eliminating the “in between” steps to many processes, saving time and improving order fulfillment. Just as Accounting and Purchasing no longer have to email spreadsheets back and forth, warehouse and shop staff no longer have to call admins or fill out paperwork every time they need information or want to make a change.
For example, our Agility | Mobile Warehouse Tools app lets staff members look up the specific location of tagged bundles. If the bundle needs to be split or moved, staff members can update the record directly in the app, and the change is immediately visible in Agility. Everything can be done in the moment from a mobile phone or tablet. Employees no longer spend time walking back and forth to the computer or printer. It also eliminates the risk of their forgetting to update records later. This is a huge asset in daily operations, and also when performing physical inventory and cycle counts.
In addition to managing inventory, Agility | Mobile Warehouse Tools streamlines the remanufacturing process. As soon as an item comes off the line, staff members mark the work order complete with a few taps on their phone or tablet. It’s all done on the fly from the shop floor, and records are updated instantly. There’s no need to use a stack of printed forms or enter the changes later at a computer. It saves time and paper, so products get to customers faster.
Mobile apps not only improve internal processes, they improve service quality and customer satisfaction. For instance, our Agility | Mobile Sales app provides real-time account and product information. Outside reps can answer customer questions, check available stock, and even create new orders while on the road. Our Agility | Mobile P.O.D. app not only captures proof of delivery signatures, it provides customers with real-time updates on the status of their order and gives them access to delivery-site photos. Customers know what’s happening with their orders without needing to call their sales rep.
In the coming year, we will be expanding the functionality of all these apps, giving customers even more opportunities to centralize their business operations.
This piece originally appeared in the January 2018 issue of National Hardwood Magazine.
At its core, cyber security is a people issue. Viruses don’t magically appear in your company’s system. They get there because of things employees do (or don’t do), frequently without realizing it.
Most people know the basic rules of cybersecurity: don’t open suspicious attachments, don’t click on suspicious links, don’t give your bank account to anyone claiming to be a Nigerian prince, etc. But there are other ways people expose their businesses to risk, many of which are routine, seemingly harmless actions.
Risk 1: Traveling Devices
Computer viruses spread kind of like human viruses. A cold virus spreads when a sick person comes into contact with a healthy person. When a computer virus gets into a network, it spreads into devices that connect to that network. If an infected device connects to other networks, the virus spreads again. This is why traveling devices such as laptops and USB thumb drives can be security risks.
Laptops and thumb drives are routinely used outside your company’s secure network. Sales reps take their laptops on sales trips and customer visits. Managers save files on thumb drives, so they can continue working at home. And while most businesses have decent firewalls, the average home network has expired anti-virus software, weak passwords, and kids who download things they shouldn’t. In short, home networks are pretty vulnerable to malware. If a laptop or thumb drive picks up a virus and then goes back to the office, that virus can spread into the company network.
Risk 2: Mobile Apps
Mobile apps can legitimately improve productivity at work. With so many free options to choose from, people are building personal libraries of apps to track expenses, streamline their inboxes, and manage their passwords – all from their phones. While these apps are highly convenient, they can also make company information more vulnerable.
Using outside apps for company business is like handing your wallet to a stranger. You have no control over how your information is used, stored, or protected. If anything happens to the app’s publisher, your information is up for grabs. For example, in June 2017, the password management app OneLogin was hacked, giving the criminals access to thousands of people’s user IDs and logins. When employees give third-parties access to their company email, financial data, and passwords, that information is less secure.
Risk 3: Outdated Software
New software isn’t always a huge priority for businesses. “I know the program is 10 years old,” the thinking goes, “but it still works. Why should we pay for something new?” The current generation of software programs aren’t just faster and better, they’re also more secure. Older software is often full of well-known security holes, which makes businesses running these programs attractive targets for hackers. For example, the WannaCry virus exploited a weakness in Microsoft Windows 7, an old operating system from 2009. Computers with the most current version of Windows were not vulnerable to the virus.
To be fair, newer software also has security flaws. New products, however, are routinely updated with security patches to repair the holes. Here’s the catch: in order for the security patches to work, end users have to install them. And end users, it turns out, aren’t great about installing updates. The Equifax hack was traced to a known security flaw in a common web program. Even though Equifax was alerted to the issue, they waited months before taking action, giving hackers plenty of time to work. Had the company been more proactive, they may have been able to prevent the entire fiasco.
TWO WAYS TO IMPROVE SECURITY
Viruses, hackers, and software patches are all technology issues. But taking a laptop home, using outside apps, and ignoring security updates are all people issues. If you really want to improve cybersecurity, you need to address human behavior. (And, because humans aren’t perfect, you need a contingency plan.)
Create a Cybersecurity Policy
A cybersecurity policy is more than telling employees they can’t look at Facebook. It’s a proactive plan for how the business will protect its network and respond to security breaches. Some things the policy might include are:
The policy should also include an employee-specific section that explains how the policy affects them. This might include rules regarding the following:
While documenting your policy is important, documentation alone won’t lead to change. You need to actively engage with employees around this subject. Have educational sessions about cybersecurity. Explain the different ways hackers may attempt to attack your business, and teach employees to identify suspicious messages. (This is useful knowledge for their personal lives as well!) Describe the changes the company is making to improve security and their role in these changes.
Change Your Infrastructure
Changing employee behavior is important, but there’s no way to make any system 100% human-proof. People will make mistakes. This is why the second course of action is changing your infrastructure. More specifically, stop using an in-house server and move your data to the cloud. Using the cloud won’t stop employees from opening a corrupt file, but it does protect your data in the event a breach happens.
A lot of businesses don’t trust the cloud. They want to have physical control over their technology because it feels safer. But private servers are actually the riskier option (unless you also have a full-time cybersecurity team). Keeping your data on a private server is like keeping your money in a shoebox. It’s physically in your possession, but if a criminal breaks into your home, the shoebox is easy to steal. Using the cloud, on the other hand, is like keeping your money in a bank. You still have access to the money, but if a thief breaks into your home, there’s nothing for him to steal.
So, what’s to keep viruses from getting into the “bank”? In a word, resources. Cybersecurity is expensive, which is why most businesses only have the basics. Data centers, however, invest heavily in sophisticated security tools and anti-virus software. They also provide 24-7 monitoring by cyber-security experts who constantly walk the (virtual) perimeter, checking for weaknesses and suspicious activity. Let’s go back to the shoebox vs. bank analogy. Your only way of protecting that shoebox is to lock your front door. The bank, on the other hand, has locks on the door, cameras in the ceiling, and German Shepherds patrolling the lobby.
Cybersecurity can seem overwhelming, especially if you don’t have a technology background. But when you approach it as a people issue, it’s a feasible project for any business to tackle.
This article originally appeared in Building Products Digest.
Data is one of the most valuable resources a business has. It’s the key to repairing weaknesses and leveraging strengths. Solid information lets managers make better decisions for their departments: Sales can find the most profitable accounts; Purchasing can predict seasonal demand and Operations can improve production rates. But businesses that rely on isolated reports aren’t realizing the full value of their data.
While department-level reporting is helpful, it’s also one-dimensional. The most valuable insights require multiple pieces of information. Unless a business combines purchasing, sales and operations data, it can’t accurately calculate the cost of a custom door or determine if it’s being sold at a loss. Businesses must synthesize their information if they are to profit from it.
“Synthesize your data” is easier said than done for businesses that use different software programs for their core processes. Exporting multiple data sets and reviewing them in a spreadsheet is time-consuming at best. For instance, sales reps are much more successful when they review an account’s stats before a meeting. Unfortunately, most people can’t afford to spend an afternoon looking up open quotes, backorders, delivery histories and past-due invoices for all their customers. Valuable information is there, it’s simply inaccessible. Even when people spend hours processing operational data with a spreadsheet, the results are less than perfect. Unless someone at the company has a background in data science, it’s easy to miscalculate values and misinterpret results. Trying to do cost allocation with an Excel formula is incredibly risky.
Analysis becomes much easier when businesses consolidate their core processes under one software application. Multi-functional platforms like the Agility ERP system use a single data set, so updates made in one area of operation are immediately reflected in the others. For example, when a sales rep enters a work order, it’s immediately visible to employees in Accounting, Purchasing and Remanufacturing. Because Agility supports every area of operation, it has the built-in ability to combine information from multiple departments when calculating things like suggested purchase orders and cost allocations.
While data is an incredibly valuable resource, it’s prohibitively expensive to use without the right tools. Software that allows businesses to make smarter decisions, gauge performance, and track actual profitability is well worth the investment.
Pricing out new software seems straightforward, but the true cost of ownership isn’t always obvious. There are costs around implementing a new ERP system that may not be in your original contract, but buyer beware: You may end up paying for them anyway.
To avoid getting taken unaware, go through the following list with potential vendors to find out how they handle each of these areas.
HARDWARE
Hardware: Do your existing computers support new software or will you need to upgrade? This includes specialty hardware like new credit card readers, GPS trackers, and mobile devices.
Data Storage: Vendors usually charge a monthly fee for hosting customer data. If you plan on using your own server, factor in operational costs like electricity, anti-virus software, disaster recovery plans, and employee hours.
Data Cleanup: Someone needs to update all your item and customer records to fit the new system. Whether a vendor, consultant, or employee does the work, budget time and money for data cleanup.
SOFTWARE
Software Licenses: Enterprise software has two pricing models. A perpetual license where you pay a one-time lump-sum and then “own” that version of the software. There are typically additional fees to access new features and customer support. A subscription license is where you pay a monthly fee to access the most current software version. New features and customer support are typically included in the monthly fee.
Customizations: If you need a feature, report, or interface that’s not available in the core platform, you may need the vendor or a contractor to develop it. Have vendors explain how they handle and bill for customizations to their platform.
Implementation Help: If you hit a snag during implementation, you may need extra help from your vendor to work through it. Ask about the pricing policy for additional training or assistance, just in case.
Ongoing Support: Ask about the limits on the support contract. Does it cost extra to speak with a human being? If the contract includes 5 phone calls a month, how much for the 6th?
STAFF CONSIDERATIONS
User Licenses: Most subscription software is priced in one of two ways: by named users or by concurrent user licenses. Named users mean you pay a fee for every individual user. By contrast, if you pay for 20 concurrent user licenses, up to 20 employees can use the system at once.
Staff Costs: When implementing a new ERP, you’ll likely need a dedicated system manager to focus on optimizing your investment. Will you reallocate or expand staffing to support the new system?
User Training: This includes vendor and contractor fees for the initial implementation as well as ongoing training costs. If you’ll be wanting in-depth training at workshops and user conferences, include registration and travel expenses.
Get clarity from vendors about which services are included in your contract and which are billable. Determine if there are any areas where they recommend hiring outside contractors.
Lost Productivity: Businesses experience a temporary decline in productivity when they change software. Not only does implementation and training cut into people’s time, but every department also runs slower as the staff adjusts to the new system. Estimate productivity costs by talking to industry peers about their own implementations.
FUTURE PLANNING
Growth: If you have plans to hire more people, open new locations, or offer new services, you should factor in costs for additional user licenses, hardware, training, support, and products. Ask vendors about the process and fees for setting up new branches and users. If your strategic roadmap includes new technology tools, such as a new e-commerce site or mobile apps, factor in those costs as well. Find out if you’re locked into using each vendor’s solutions or if you’ll have the option to build your own.
Yearly Price Increases: Just like everything else, costs go up. Most vendors can’t guarantee pricing for the next 5 years. But you can forecast the trend by looking at the past 5.
Choosing a new ERP system is intense. It’s easy to develop tunnel vision and make a decision based on the number quoted in a contract. Remember to look at the entire picture so whatever your decision, you truly know what you are buying.
You don’t normally associate words like “lovable” with software companies, but customers of DMSi Software think it’s an apt description. In customer satisfaction surveys, the word “love” comes up more than you would expect: “I love you guys,” “we love your software,” “I love your support team,” “you guys are just so damn lovable.”
So, what does it take for a company to inspire this kind of feeling among its customers? DMSi’s recipe for success is one that can be followed by any lumber yard that prioritizes customer relationships.
BUILD RELATIONSHIPS
All businesses know good service is key to building customer loyalty. But while leadership may say service is a priority, the reality is service quality depends on the company’s employees. Interactions with employees are powerful factors shaping a customer’s overall opinion of a company.
So how does a company make sure customers have the right experience? It starts with hiring the right people.
DMSi is uncompromising about hiring candidates that fit the company’s service-oriented culture. In addition to intelligence and experience, DMSi management looks for people who are thoughtful of others and find personal satisfaction in team success.
Kerry Blusys, a Senior Account Manager at DMSi, said, “We value our people and we want them to value what they are doing.”
When you have naturally service-oriented people who value relationships, it’s easy to build positive connections. DMSi customers develop lasting relationships with the employees who install their software and answer their support calls. When DMSi customers and employees see each other at tradeshows or the company’s biennial customer conference, the smiles and handshakes are those of old friends rather than client and service provider.
Kerry Blusys said, “I have been with DMSi since the first decade of existence. We treat our clients like family. That‘s more than being friendly on the phone or remembering people’s names. We genuinely like our customers, we want to see them succeed, and we’ll work our butts off to help them. Because that’s what you do for family.”
BUILD EXPERTISE
Part of delivering good service is knowing what matters to your customers. A phone call letting a customer know a shipment is on its way is a small gesture. But during the busy season when product availability is critical, that phone call may be a great relief.
For a business to deliver the highest quality service, employees must understand customers and their priorities. That contextual knowledge allows employees to provide more meaningful service. This is why DMSi makes internal education a priority.
“We have a lot of employees with strong accounting or logistics backgrounds. Those skills bring great value, but we also want to be sure they understand the world our customers live in. We have on-going employee education so our people understand the products our customers sell and the unique elements of their businesses,” said Brent McNurlin, Market Team Coordinator.
In addition to internal classes, visits to customer locations are key to employee training. “Seeing a lumber operation in person, talking to the people who count on our software to do their jobs, it gives a totally different perspective on what we’re trying to accomplish,” said McNurlin. “Our objective is to have every employee at DMSi visit a customer at least once a year – from our software developers to our marketing team, everyone. That context helps us build products that actually meet our customers’ needs.”
In addition to working with individual customers, DMSi staff are active participants in multiple trade associations, with NAWLA being a prime example. Not only are these associations valuable in building and maintaining relationships, but they also put DMSi at the heart of industry developments and concerns. DMSi’s Director of Customer Support Anthony Muck, who has served on multiple NAWLA committees, said “We track all aspects of the industry and marketplace, including price, transportation and sourcing. This way, we can proactively help our customers adapt to changing elements.”
BUILD GOOD SOLUTIONS
Deciding which products to carry is a strategic decision for any business. Is that “hot” item a good addition, or will it just sit in your warehouse? Technology companies face a similar issue: is this new technology worth pursuing or just a flash in the pan? No matter the industry, companies need to decide where to invest resources and which products are worth bringing to market.
DMSi bases its decisions on the needs and priorities of customers. Its development teams prioritize new features and products based on the value they deliver to customers’ businesses.
For instance, the company’s flagship product, Agility ERP, is an end-to-end platform that handles all core business processes. But it really shines in inventory control and order management as these areas have always been top priorities for DMSi’s customers. The company invested heavily in functionality to more easily handle the complexities of dimensional products, units of measurement, inventory optimization, and fulfillment issues. Anthony Muck said, “The two key factors that differentiate Agility are inventory control and order management. Those two features are above and beyond all the others.”
DMSi continues to drive Agility forward, expanding and adding features to meet customers’ changing needs. Scott Davis, Business Analyst for DMSi, added, “As our customers evolved and started selling different products and providing different services, Agility has changed right along with them. We can handle what sawmills and other manufacturers do, and our sweet spot has always been with distributors, but now we can go further down the chain to point of sale and the retail environment. If Agility doesn’t handle something the way our customers need, we have the ability to build it.”
A classic challenge in order fulfillment is timely transfer of information, especially for activities outside office walls. DMSi addresses this by leveraging mobile technology. For instance, their Mobile Sales app lets outside reps check stock levels, get job-specific pricing, and even submit orders directly from their smartphone. This means the rep can provide the answers and services the customer wants during the sales meeting rather than needing to return to the office first. The Mobile Warehouse Tools app lets warehouse staff calculate, enter, and submit inventory counts from the yard or warehouse floor, making counts faster and reducing paperwork. The Mobile P.O.D. app lets delivery drivers capture electronic signatures and confirmation photos. Then the electronic signature is automatically generated on the relevant forms and emailed to the accounting department with all signatures, pictures of the delivery and everything needed to verify receipt.
As Brent McNurlin explained, “We are providing instant gratification and instant answers to issues that matter. Previously, our customers would scan in their delivery tickets that night or the next day. Now with Mobile P.O.D., they can have an update in 30 seconds or less. They can immediately know the status of an order. ”
DMSi is hardly the first company to recognize the importance of customer relationships. What makes the company different is its willingness to invest in elements that make those relationships possible: hiring practices, employee education, and targeted product development. Companies willing to treat those building blocks as priorities can see the same success.
This article originally appeared in the publication Softwood Forest Products Buyer.
If you count inventory once a year, your inventory records will be accurate once a year. When you consider that inventory is a yard’s biggest capital investment, “accurate once a year” is a sorry benchmark.
While most business owners already know this, many still have poor inventory management practices for a range of reasons: lack of time, not having the right counting and recording tools, and not having the right processes in place.
Like building a house on a faulty foundation, running a business on faulty inventory records has far-reaching and expensive consequences. Almost every aspect of a business can be affected by poor inventory management practices.
First, poor inventory management hurts profits. When buyers mistrust inventory data, they’re more likely to over-purchase. This means you might easily meet demand, but the extra product means your carrying costs are higher than your competitors. That overhead, coupled with the cash tied up in surplus inventory, all affect the bottom line. Additionally, irregular buying processes make you more vulnerable to market fluctuations. If you’re regularly over- or under-purchasing, price spikes and drops will unduly affect you.
Customer relationships can also be hurt by poor inventory management. Think about someone placing an order now for pick-up at a future date. When the scheduled deadline arrives and the product isn’t in stock, you’ve hurt your customer’s business. Disappointing one client is bad enough, but if you start developing a reputation for back orders, customers may start looking for more dependable suppliers.
Finally, poor inventory management drains company resources. Think about the buyers who are placing another last-minute order because stock has run out; the warehouse crews searching for misplaced product; the sales reps checking the yard before submitting an order. This is time, energy, and focus that could be better spent elsewhere.
The “good” news is, you aren’t alone. Many businesses struggle with maintaining accurate inventory records – your competitors are likely among them. Improving your inventory management isn’t only good for your bottom line, it’s an opportunity to gain a competitive advantage!
Here are three basic strategies to improve your situation and turn a company weakness into a strength.
1. REPORTING
Before you fix your inventory issues, you need to know what those issues are. Good reporting not only brings problems to light, they help drive action. The following reports are standard options in most inventory management programs.
Inventory turns – how many times you’re cycling through each product in a year – is a good place to begin. Six turns is a good target. If the report shows inventory turns and sales are misaligned, you can adjust your buying strategy.
You’ll also want a dead stock report to learn what inventory is sitting around taking up valuable space in your warehouse. Create strategies to get rid of it (like offering deep discounts or rearranging stock so dead items are more likely to get pulled). Then make sure you don’t buy it again.
Finally, a hit report shows how many times material shows up on orders. That’s extremely valuable information that’s easy to act on. For instance, you can sort it from the lowest to learn what items are likely to show up next on your dead stock report and again – strategize on how to move it. Doing so frees up both warehouse real estate and cash flow.
2. CYCLE COUNTING
Cycle counting, where small batches of inventory are counted throughout the year, is one of the most valuable changes you can make. Compared to the “all hands on deck” annual inventory count, (which we promise your staff hate doing as much as you do), cycle counts allow you to focus on subsets of inventory. They’re also far less disruptive to daily operations. Smaller, more frequent inventory counts not only improve business practices, they also save time.
At minimum, cycle count your A items – the ones earning you 80% or more of your money. (Most modern inventory management platforms allow you to categorize and flag ABC items.) If you’re frequently engaging with these, you’re far less likely to run out of stock or over-purchase.
3. MOBILE WAREHOUSE TOOLS
Finally, consider a mobile inventory management solution. Traditional inventory control methods involve counting items on the floor, writing the counts on sheets, taking those sheets back to the office, then waiting for someone to key the data into the system. A mobile solution eliminates most of those steps. When staff members have a mobile device for tracking counts, whether a scan gun or an app on their phone, they can update records on the floor in real-time. Not only does this make counting less of a burden for them, it drastically reduces opportunities for human error.
There’s a range of mobile inventory tools available from full-blown WMS systems to streamlined apps. If you decide to invest in one of these solutions, make sure it integrates directly with your inventory management software.
Accurate inventory data is a powerful asset in running a successful business. It’s closely connected to both profits and your company resources. It also makes for satisfied customers and happy employees, two things you will always be working to gain and keep.
But by implementing key strategies of cycle counting, actionable reporting, and good software, the groundwork to grow your business will be laid on a nice, solid foundation.
This article originally appeared in the publication Softwood Forest Products Buyer.
