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Software – Upgrade or Get Behind
With recent technological innovations and more affordable options, suppliers say the time is right for distributors to upgrade their software
By Lisa White
About seven years ago, companies were scrambling to become Y2K compliant. Big money was spent by many for new hardware and software programs that would soon become obsolete.
Fast forward to 2006. Though the pandemonium is absent, suppliers say distributors are finding this is an opportune time to take advantage of today’s newest technologies. This includes software programs that are not only more affordable than in years past, but also more reliable and efficient.
Although distributors historically are not the first to jump on the bandwagon when new software is unveiled, software suppliers say this may be changing. "We see the industry turning around, as wholesale distributors are embracing technology," says Jim Sams, director of business development at Creative Data Research (CDR), a technology suppler based in Mandeville, LA.
Jovo Filips, vice president at Rutherford & Associates in Holland, MI, also sees a significant increase in distributors investing in technology this year. "New mobile technology is driving this surge. Companies are realizing, with the cost of goods decreasing, there is a definite advantage to adopting new technology that is cheaper and more capable," he says. "There is a lot of pressure from bigger chains who want to be serviced more efficiently, but the mom-and-pop stores still need to be taken care of. Fortunately, it doesn’t cost 10 times more to service a smaller customer versus a large one with this technology."
He says more companies are demanding standards in data interfacing. "There were problems over the years with older software that had a tough time interfacing with new software. Now, companies that are investing in new software are demanding that these programs be easily integrated," Filips says.
Tightening transports
Both high gas prices and retaining quality drivers are great challenges facing the transportation industry. "Anything that allows for better utilization of drivers and fleets and cuts costs is helpful," says Mark Skoog, vice president of marketing for Phoenix, AZ-based Advanced FoodSystems (AFS).
Designed to help increase loading and delivery efficiency, AFS’ Mobile Delivery software automates the entire check in and check out process that the driver goes through at a customer’s site. "It helps streamline the process so they can make more stops on the route and reduce overtime," Skoog explains. "This program also synchronizes with the main distribution and financial back-office system to ensure the customer’s order is correct and the right pricing is on the invoice. This makes delivery quicker and produces fewer errors."
In the area of transportation, route management software has come a long way. Last September, Rutherford & Associates announced a major partnership with UPS that resulted in the integration of its route management software with UPS’ logistics software. "This program offers dispatching, truck load management and territory planning for operations with 200 or 300 trucks," Filips explains.
Another software program geared toward transportation is Manasquan, NJ-based Tax-Right LLC’s ShipRight software, which works with its TaxRight hardware. "This program confirms the accuracy of a driver’s manifest," says Steven Stomel, president. "As trucks are being loaded, bar codes on packages are scanned and the driver’s load sheet is confirmed for accuracy." The program interfaces with QuickLoad, a new truck-loading device. "By combining these two programs, a wholesaler can increase loading rates by as much as 50 percent."
Using your voice and hands
In the last year, many new developments have occurred in voice picking. Although it can be a costly investment, Sams at CDR says voice picking offers payback in a year if it is used correctly. "Many of our customers are looking at it because it reduces picking errors and labor," he says.
One CDR customer, Indian Nation, a c-store distributor that serves more than 2,500 stores throughout Oklahoma and Texas, went live with CDRs Vocollect voice picking software in April of last year. "We were looking for a way to reduce errors and labor for picking," explains Dawn Laxson, vice president of administration.
Although Laxson says the company hasn’t reaped the full benefits of the software because it is not yet streamlined into the entire warehouse, she is happy with the program.
Since instituting the software, productivity at Indian Nation has increased more than 30 percent, the expense of order returns and need for invoice adjustments have been dramatically reduced, and the company has discontinued using order checkers on each line. In addition, new employees are trained and functional with the Vocollect system within two hours.
In addition to voice picking, hand-held devices work with software to provide even greater efficiencies. CDR is rolling out DAC Connect, which provides real-time, mobile access to information for the distributor’s sales staff. Utilizing a Palm Treo 650, sales personnel can check pricing, accounts receivable status and inventory status. The unit also supports mobile ordering and order history review.
Distributors are interested in mobile products that allow salespeople at the point of contact with customers to resolve business issues on the spot, Skoog says. "Mobile computers are better than in the past. They are not dramatically cheaper, but they can do a lot more," he explains.
While the older hand-helds operated from a DOS platform, the newer versions’ interface is Windows CE. "What’s required today is that distributors’ various computer systems are all integrated and synchronized. This means the system they use to receive orders is the same one employees use to pick and pack in the warehouse, and load the trucks. The same basic data elements are used by multiple systems. It’s all about investing in a tool that improves employee productivity and customer service," Skoog says.
In June of last year, AFS unveiled a new mobile delivery automation solution that controls and manages the flow of information to and from mobile workers and back-office computing systems for use in driver delivery, route accounting and direct store delivery (DSD) applications. The solution consists of software that runs on Microsoft Pocket PC- or CE.Net-based programs. Hand-held devices are typically equipped with bar code scanning, and communicate with distribution and financial systems through wireless or wired networks.
To streamline its order taking and eliminate errors, Seder Foods, a Massachusetts grocery wholesaler, instituted AFS’s software in June of last year after two years of research on the technology, according to Bob Sylvester, controller.
The software provides functions for drivers, customers and management including quick check-in, time tracking, credit returns, payment collection, inventory transactions and proof of delivery via signature capture. The solution also supports the DEX/UCS grocery industry standard electronic data interchange for use by pre-sell distributors who generate invoices in-house and need to transfer that invoice information into the retailer’s system at the receiving dock.
"With this program, we have the ability to send a salesperson to another state to place a direct order with their hand-held unit. The salesperson uses the hand-held to scan what’s on shelf to make up the order and can check that the item is in stock. He can get UPC updates and information on new products and orders that went out the night before," Sylvester explains. "His hand-held will tell him everything about his customers, including their store locations, phone number, who the store owner is, how much they owe, their terms, etc." With this system, Seder Foods’ customer service levels have gone up significantly.
Dan Belinger, president of Beltech, a Grand Rapids, MI-based provider of consulting, integration and implementation services, says today’s software must take advantage of wireless communications. "We are seeing an increase in remote sales order entries through the use of current technology," says Belinger. "We are seeing PDAs, bar code scanners and wireless communication in one device. A salesperson may scan bar codes and create a sales order through a wireless Internet connection. It then prints off a pick at the distribution point and is picked up for delivery the next morning."
An enterprising solution
Michael Benedick, director of sales at Richmond Hill, Ontario-based Mulvany Attard Associates, says he is seeing even smaller companies looking at more technologically sophisticated programs, including scanning systems interfaced with software and web order entry. "We have customers still using DOS systems because they have old hardware and don’t want to change. But when these computers break, you can no longer get DOS systems and have to be able to upgrade. As a result, many customers are finding it’s a good time to upgrade hardware and software," he says.
Over the last year, Mulvany Attard has redesigned its software package for smaller customers that don’t want to make a $30,000 investment. "We created another version of our Enterprise software called SB Basic, which provides companies with standard features and functionality to run a small business efficiently, without the high price," Benedick says. Although users can’t perform modifications or add on features with this version, it allows smaller companies to perform the same tasks as the big guys for between $5,000 and $8,000.
The company also has been looking closely over the last year at the FDA Bioterrorism Act to make sure its software is compliant. The act requires manufacturers, processors, distributors and transporters of food to be able to track the origin of the product from processing to the final user. Product tracking information, such as lot numbers, expiration/process date, shipping/receiving date, quantities and type of packaging, and the contact information of the recipients of the products delivered are required to be provided to the FDA within 24 hours of a request. "Although this Act will mandate food distribution in the United States, the FDA says only half of the distributors and retailers in this country have registered to comply with the Act," Benedick says.
In terms of tracing software capabilities, Aspen Systems in Phoenix, AZ, offers an inventory control module with its Enterprise software that features trace back and recall reporting. "This exceeds most distributors’ needs because that portion of the program was designed for meat producers. It’s pretty comprehensive," says Ed Miller, director of operations.
Aspen System’s software includes most functions needed to run a business, including accounts receivable, accounts payable, purchase order, order entry and a number of other capabilities. "Over the next year, we will offer a full WMS program that has recommended stocking location based on product velocity. We also are working on perpetual inventory software to track actual costs of product shipped. Most programs only do that on the high end, but our system will accomplish this for all products so distributors will have more accurate information on costs," Miller says.
In terms of integrating today’s software, Todd Michaud, executive vice president at Plano, TX-based Retalix, says the leaders are focusing on enhancing relationships with their suppliers and customers. "Distributors are beginning to shift their IT spending from internal operations to external, with a focus on suppliers and customers to improve these relationships. The new measure for software success is on things that add value to trading partner relationships," he says.
At the NACS Show, Retalix announced its FMR initiative, a new program targeted at small and medium sized c-store chains that garnered interest with distributors because it provides electronic connectivity for electronic payments and orders. "It connects our Power Enterprise system with a store point system for supply chain optimization," Michaud explains.
Retalix also recently came out with new versions of its Power Enterprise systems. "Within that suite, you dramatically enhance accounts receivable, order management and purchasing," says Michaud, executive vice president. "We also offer Power Warehouse, which enhances labor management tracking capabilities and offers voice integration with order selection.
For wholesale distributors looking to increase operational efficiency without carrying the cost of implementing a new Enterprise Resource System, ProCat Management Services in Hammonton, NJ, has developed a line of customized supplemental software programs.
According to Brian Neuwirth, national sales manager, the company’s StockRight Inventory Management System was developed as a value-added service for wholesale distributors to help their retail locations manage inventory levels at the store level. "The StockRight System receives unique store data through a customized interface. Once the data is received, StockRight algorithms calculate inventory levels to determine each stores optimal order. Once the order is complete, StockRight electronically places the store’s order with the wholesaler," he says. With this program, sales increase by an average of 3 percent, distributors are ensured exclusivity of weekly orders, accuracy and efficiency are increased and the cigarette category delivers inventory savings and increased brand profitability.
Those companies looking to manage trade show profitability can benefit from ShowRight Automated Trade Show Service’s simplified ordering system, which allows for show exhibitors to capture show orders through an automated software program. This eliminates the manual ordering process of traditional buying shows, helps increase show sales and sales data accuracy and ensures the execution of show deals.
"Distributors don’t need to spend large dollars for new WMS," Neuwirth says. "We can provide solutions for niche problems in the warehouse."
The Future is Bright
He believes that the future for distributor software is customized supplemental software. "Through the use of supplemental software, distributors can enhance the capabilities of their operating system without investing in new hardware or software," Neuwirth says. "When a distributor combines their existing technology with a supplemental software package, the capabilities are endless."
Others predict many companies will continue investing in newer technology. "We see large and small companies who invested in technology seven or eight years ago leapfrogging and making strong software investments," says Filips at Rutherford & Associates.
Sams at CDR foresees hand-helds eventually taking over paper functionality. "This provides more real time for sales. Technology is a critical tool for wholesale distributors, and they are realizing this. Yet, they have to have ROI (return on investment)," he says.
Experts agree that, in the coming years, software will continue to play a big role in the evolution of wholesale distribution.
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