We used to live in a material world – now we also live in a digital one. But has the timber sector really jumped on board with all the options that are now available to it?
The answer, according to three of the top software companies supplying enterprise resource planning (ERP) packages to timber and builders merchants, is ‘yes, but they could do more’.
“It is growing, but sadly not at the pace that it really should,” said James Mitchell, managing director at Kerridge Commercial Systems (KCS).
“The merchant sector has historically been slower than the retail sector in respect of adopting new technology, but has been way ahead in terms of building relationships and delivering great customer service,” he continued. “As more merchants are seeing the benefits that this new digital technology can bring in respect of driving greater efficiencies and enhancing the service they offer, not to mention the sustainability benefits to the business, we do see a positive trend towards adoption. Using mobile devices and apps in our daily lives is now very much the norm, we have seen the recent pandemic hasten the adoption across all generations, so it is a natural progression that its use will extend to the workplace.
“However, the good news is that the uptake of Cloud computing continues apace and this does underpin the deployment of digital technologies, so it is moving forward. Digitisation not only introduces many efficiencies into the business, it also helps drive sustainability initiatives so it has an important part to play as we strive for carbon neutrality across the construction industry by 2050.”
Adam Lee, sales manager UK distribution at Epicor agrees that the transition to ecommerce trading is still an ongoing process for the timber industry.
“It’s still quite a traditional industry in the sense that many suppliers prefer to host customers on bricks-and-mortar premises and with timber being a very tactile product, customers usually want to see what they’re buying first-hand,” he said. “As a result, we’ve seen some merchants be slow to take up the switch to ecommerce.
“However, a significant number of timber merchants are interested in implementing ecommerce in some capacity, whether that’s using it for full trading or adopting an ERP system to act as a portal for account and data management,” continued Mr Lee. “This is why it’s so important for companies across the timber and building supply sector to work with an ERP partner that knows their industry inside and out, that can support them throughout the entire implementation process — from buying to go-live. It’s then that we’ll see a ripple effect across the industry and ecommerce trading begin to soar.”
“I think businesses are a lot further along than they were,” agreed Ian Oldrey, managing director at Ten-25. “We are seeing a lot more of our customers taking on ecommerce sites for example, starting to extend out to linking in to other systems – couriers and payment systems and things like that – and you need to have a system in place in order to connect up to the rest of the digital world. We are starting to see more of that activity, which is good.
“We have taken on customers over the last year who have come from either literally paper-based orders or from trying to use a financials package that doesn’t really cut it as a timber trading system, so they have outgrown it,” continued Mr Oldrey. “There is digital transformation in terms of going from zero to something and there is also digital evolution where you start to get better tools that are a better fit for how your business trades and therefore gives you more information and insight at the back end of it.”
Insight and information were definitely the watchwords during the supply and demand problems of the pandemic years, with ERP systems helping merchants track rising costs and set prices accordingly.
When demand fell, supply eased and prices dropped, a new set of challenges arose, with merchants sitting on expensive stock. Again, ERP systems have helped merchants navigate their way to preserving as much margin as possible.
The software has had other uses, too.
“Customers can use Merchanter to find out where they can get extra business from,” said Mr Oldrey. “Key performance indicators (KPIs) show which are your active customers and, more importantly, which are your inactive ones – so people who have spent with you in the past few months that haven’t spent with you more recently. You might want a broader brush marketing approach to those dormant customers to say ‘we’re here and we’d love to help you’. “
“Supply chain volatility, inflation and staff shortages remain three of the biggest challenges facing the timber industry,” added Epicor’s Adam Lee. “Our goal has always been to help our customers grow in the face of adversity. For many of our timber trade customers, this means bringing tools and software onboard that enable them to increase their output without having to completely overhaul their existing infrastructure, systems, and talent.
“With ecommerce increasing as a platform for trade, a lot of our customers have a dded features to their ERP systems that product data. This enables them to digitalise a product entirely, from its taxonomy and descriptions, all the way to its measurements.
“This standardised product data can help to maximise stock, getting it into the hands of customers and ensuring that it’s not stuck in the warehouse racking up costs,” continued Mr Lee. “A key component of this is using technology to automate their supply chain operations, driving down costs using electronic data interchange (EDI) processes. With this data centralised in one place, merchants can offer their customers a better buying experience — providing a wider breadth of product choice without having to physically hold every item in stock.
“One future challenge that we’re working to address is ensuring that our customers have visibility across their entire end-to-end production and sales process — all the way to delivery,” added Mr Lee. “We’ll continue to develop integration solutions to give our timber customers insight into their extended supply chain. This will enable them to inform their customers directly where their order is in the delivery network, rather than having to rely on third-party delivery companies to provide email updates on their behalf.”
Developments reported on in last year’s software focus (TTJ July/August 2022) have been well received, with KCS showcasing its latest apps to more than 400 delegates at its Konnect conference in March this year and noting that demand for these is increasing.
“We have introduced warehousing apps not only for customers who operate larger warehouses, but also for those who operate single or multi-branch operations,” said Mr Mitchell. “This enables our smaller customers to take advantage of the control and accuracy that warehouse management can bring, but without the need to introduce full warehouse management.
“We also announced the impending availability of yet more digital solutions,” he continued. “These include a Pocket Helper to enable customers to easily view local stocks, pricing and to reserve and purchase together with a Business Tracker, enabling management to easily view and action tasks allocated to them and to approve transactions.”
Ten-25 has also brought more functionality into its Merchanter system recently.
“We can now do unique item stock control,” said Mr Oldrey. “So for products such as hardwoods that means being able to identify either individual pieces of timber or individual logs as their own entity. It’s a very handy feature.
“We have also added a lot more into the system for doing stock management by location. This means the merchant can effectively build a hierarchy of locations within each of their sites so that it is easy to stock take and stock control by them. Most people tend to stock control by depot overall but it is very useful to know that a product is held in [a certain location] within that depot.
“The other thing we’ve done is to help new clients who may currently be using either Sage or Quickbooks or Xero as their financials package. We’ve written tools whereby we can extract the customer supply and product data out of those systems to create starting data for their timber trading system on Merchanter. We can link it back in so they can carry on using their financials as a financials package but it’s a much quicker set up.”
Ten-25 has continued its work to enable customers to link Merchanter with third party platforms such as eCommonSense, WooCommerce, eBay, Amazon and Shopify.
“We have also linked into things like NearStreet, which is a service that publishes stock and price information within a small geography of where your sites are located,” said Mr Oldrey. “So when people do a Google search for a particular product it says if you’ve got it in stock and what the price is.
“Merchants are using other market place sites a lot more,” he continued. “That way they can act as the supply chain to sites that are doing the promotion and the marketing and getting customers in. If you are a local independent merchant it’s great to have your own ecommerce platform but you do have to promote it and really get behind it. It’s useful to be able to supplement that with orders coming through from these other market place sites as well.”
Ten-25 is also nearing completion of the first version of a “suggested re-ordering” function.
“Timber requires more competent algorithms than unit product suggested reordering does, so we’re quite proud of that,” said Mr Oldrey, adding that once artificial intelligence (AI) enters the frame “it is those tools that are going to make it fly”.
Epicor’s BisTrack system is “constantly evolving” said Adam Lee, adding that the company is working to develop and upgrade its capabilities across its markets.
“We now have one single global version of BisTrack available, giving us much more efficiency in terms of the functionality we can provide to a wider, broader set of customers,” he said.
“We’ve recently introduced a new update to BisTrack which has added detailed capabilities to support product picking – as merchants will often be producing products with variable width elements – and pin drop functionality to enhance delivery accuracy,” added Mr Lee. “This means that even after a product has left the warehouse our customers can ensure that it makes it to its end destination seamlessly, as delivery drivers can access precise delivery location data. This is particularly useful for remote, rural areas with names rather than numbers or larger sites with multiple access points.”
Last year Epicor launched its Automation Studio, giving customers the ability to connect with other software programmes with little or no IT coding needed and the company says its impact has been “widespread”.
“It is compatible with a range of our products and services,” said Mr Lee. “We’ve worked with buying groups such as NMBS, providing Automation Studio technology to connect to their OnePlace product information management system, and enhance their member’s ability to transfer and integrate data across the supply chain.
“Currently, we’re working towards Automation Studio being fully compatible with BisTrack across the timber and building supply community and we’re continuously engaging with customers to make improvements and process integration (PI) enhancements that will make it more effective. We hope to be able to provide further updates over the coming months.”
Like Epicor, KCS has also worked closely with the NMBS on integrating its OnePlace catalogue solution.
“This enables members to view product details and images online and to easily adopt them for processing within their business system,” said Mr Mitchell.
“We do see the importance of integrated product catalogues. This is used extensively in other markets that we serve, where it has really served as a catalyst to building a complete digital supply chain. We are strong advocates of the European Technical Information Model (ETIM) initiative and we will continue to focus efforts on catalogue solutions over the coming years.
“We have broadened our electronic funds transfer (EFT) offering and now support integrated solutions from Dojo and WorldPay,” he added. “These are being steadily rolled out across our customer base.”
The company has also formalised relationships with a number of other partners, such as What3Words for deliveries.
KCS is rolling out the latest version of K8 to its customer base, promising innovations including enhanced product search capabilities, to automation of the accounts payable process, extended rebate management, improved delivery planning and management, product proposals and additional application programming interface (API) capabilities.
And in the coming year, the company says it will bring to market a new platform that will enable it to adopt other partner solutions quickly and to streamline the integration process that can be both costly and time consuming.
“This will not only give us an economy of scale across all of our solutions and speed up the time to market for new partnerships, it will ensure that our customers can quickly get real benefits from these as well,” said Mr Mitchell. “Our efforts will continue to make available industry specific solutions to our customers that will support their digital transformation journeys. All of this with the objectives of sustainability and profitability in mind.”
AI has really hit the headlines in recent months and it’s fair to say it has had some pretty negative publicity. But it will bring benefits – provided it is used wisely.
“Like every human invention ever, it comes with some fairly miraculous upsides and some fairly terrifying potential pitfalls,” said Mr Oldrey (see also feature p74).
“When it comes to the ability to take in large amounts of data, crunch it and distil it down into useful and tangible actions I can see a lot of positivity to come out of AI. I can see it starting to be that trusted adviser to give all the smart answers that are needed to be refining what stock profile you have, which customers you need to be targeting and where prices need to sit in order to be in a good position in the market. I can see things like that being incredibly powerful.
“At a wider level, AI has concerns,” added Mr Oldrey. “One of the things that worries me is the idea that if it doesn’t know the answer it starts to make things up – it wants to please you. The problem with that is that if you are using it, for example, for stock projection and it says ‘I’m sure we’re going to sell loads of these next month so let’s order loads in’, if it’s barking up the wrong tree and just thinks it’s giving you a smart answer then that is potentially a dangerous road. Like all technologies that come along, we need to learn to work with it, to iron out stuff it doesn’t do so well and mature in our use of it.”
KCS has not yet adopted AI technology within its systems but says its technical and business teams are constantly looking for ways it can be used to the benefit of its customers.
“We are all witnessing the acceleration of the development of AI and it’s certainly an interesting field,” said James Mitchell. “As this technology matures, we can see that it can offer tremendous opportunities, so we will embrace it at the right time, as and when of benefit.”
Epicor already has a grounding in AI, having developed its own chatbot and explored the applications of natural language processing (NLP).
“AI has developed rapidly over the past 12 months, and we’ve been working with our timber trade customers to help them understand and harness these emerging technologies,” said Adam Lee.
“We recently hosted a large customer event where we discussed OpenAI integrations, having AI do more complicated calculations such as material requirements planning (MRP) processing,” he added. “We’ve also been expanding our expertise in predictive analytics, acquiring Grow Inc, back in March 2022 — a no-code, fullstack business intelligence (BI) platform that empowers users to make data-driven decisions. We’ve begun to integrate the Grow Inc platform with BisTrack, using the technology to enable customers to access dashboards and pre-built analytics in the Cloud and receive predictive analysis of their data.
“While the future of AI and its applications is still unknown, we’re committed to working with our customers to understand and embrace these new technologies as a force for good,” said Mr Lee.
