Research has shown that most companies change their IT systems every five to ten years. Not exactly cutting edge technology if the system is 10 years old!
We keep hearing that there is an upturn in the market and it appears some timber companies are doing very well. It might, therefore, be time to look at what modern software systems and techniques are available to grow the business and increase the profitability.
Choosing a new software package for your timber business is difficult and time-consuming. Most companies concentrate on how a system meets their particular timber requirements. In fact, you need to spend time looking at the completeness of the system and how the supplier conducts its business. When you select a new software solution, you are also beginning a relationship with the company that supplies it. It is imperative that you have a true partnership. Remember, you will be linked throughout the entire life cycle of the software.
Increasingly timber merchants are doing more than just timber business. Many run a trade counter; they might have ironmongery in stock and also do some lightside trading. This means they will have to look for a solution that not only covers timber, but a functionally rich software system that can cater for all aspects of the business.
For merchants and importers, software solutions should obviously include specific timber functionality. Stock management, for instance, must cope with loose or to specification requirements, metric or imperial options, full pack management, fixed width, mixed width and unit timber products, tally lengths and processes. Sales order processing modules have to be capable of handling length, volume, specification and packs, conversion from imperial to metric, FIFO pack allocation, customer cross-sections and mouldings, and COSHH warnings for treatment. Meanwhile, purchase order control needs to cover importing and contract purchasing, receipting by running lengths, volume, specification and packs, uplifts by percentage, value, volume and total costs, uplifts at order line, cargo receipt and purchase order level. Then there are works orders to monitor and control; milling for stock including treatments and mill costing, back-to-back functionality for raw materials and processes on external suppliers, inter-branch integration for raw materials, and full or partial supply on customer generated orders.
But, over and above this, the system must be fully integrated. It should include a full set of financial ledgers, sales order processing, purchase order control, management reporting, forecasting and everything else you would expect to need to be able to run a business.
Continuous development
So what else should a timber merchant or importer look for? A system that is being continuously developed, of course. Your supplier should be aware of the issues in your industry and be one step ahead of you and your business. It should develop the system with your future in mind. Take delivery management, for example. Managing your timber deliveries can reduce fuel costs, driver’s hours, and administration costs, while increasing customer service. Route planning and automating transactions for individual customers, delivery routing, optimisation and multi-drop delivery management can make all the difference to your business.
Partnerships between your software house and third-party providers are also important. For instance, new legislation is being introduced all the time. Your supplier should ideally have partnerships in place so that the software solution will already have the right functionality when new rules come into force.
The arrival of chip and pin is another example of how important it is for your software to be in constant development. Businesses could be caught short if their system is not ready for chip and pin and electronic funds transfer (EFT). By January 2005, your software should be able to provide you with a fully accredited smart card processing system with a comprehensive and flexible set of facilities for validating and authorising credit and debit cards. Again, you might want to find out if your supplier will also provide a platform for the use of purchase and loyalty cards.
So remember the opening sentence from last year’s TTJ software focus: “if you’ve got today’s computer solution you’re yesterday’s news – you need tomorrow’s solution now”. You need to find the supplier that is investing in its product and keeping up with new technology.