The fundamentals of timber trading may not have changed over the years – ordering materials, dispatching and raising invoices – but operations have been made easier and more efficient by industry-specific IT solutions.
These IT systems improve processes further by integrating sales, purchasing, finance, inventory, supply chain, manufacturing and quality functions.
“Using an ERP (enterprise resource planning) system makes operations extremely efficient and all processes simple and unified.
It plays a vital role in improving customer interactions and relationships, rebate management and claim support, advanced catalogue management, warehouse management, stock control and the all important mobile working,” said Stuart Hall, sales director at Epicor BisTrack UK and Ireland.
While accounting software and more general resource planning systems exist, merchant-specific products offer a better fit for the complexity of products and terms of trade.
“The scope for the types of timber products, their grading/certification, reworks, extras, directs and specials and all manner of other joinery or milling services is immense,” said Ingram Robertson, business development manager at Softec.
Ian Oldrey, managing director of Ten-25 Software, said a system designed for merchants asks the right questions in the right sequence.
“It produces sensible documents and reporting information that doesn’t assume everything is a unit item but allows you to look at volumes, meterages and wastage factors and understands certified products,” he said.
Phil Davies, commercial manager at Border Merchant Systems, agrees. “Although merchants have issues similar to other industries they are very specific in what they do.
“They sell a wide range of products to a wide range of customers at different pricing. Managing that is very difficult, as well as the other complexities like controlling buying and dealing with buying societies and rebates.
“No two customers are the same,” he continued.
“Some companies use CounterAct [Border’s system] to tightly control their businesses, how their staff operate on the counter and how processes are done. Others will use it almost like an audit trail to give them an overview.”
Darren Gray, senior sales consultant at Intact Software, said industry-specific solutions provided more flexibility and a lower cost of ownership than generic solutions.
“Two companies in the same area, with the same product range and target market are unlikely to operate in an identical fashion.
Flexibility of the user interface and deploying the solution to reflect the roles in the business and the information they need to see in a user-friendly way have proved key to our customers,” said Mr Gray.
Timber merchants have recognised the benefits of these increasingly sophisticated software packages and are now looking to integrate more of their business functions. “In just the last five years, EPR solutions have gone from what were typically seen as simple order entry systems to crucial business applications that touch and often manage the entire wholesale business,” said Mr Hall.
Online trading, mobile technology and the cloud are also influencing developments.
Ten-25’s customers are starting to show more interest in online trading, presumably because of interest from their customers, but Mr Oldrey believes it will not replace traditional counter, telephone or rep sales entirely.
“It usually involves a phone call or email at the back end of the process to confirm it’s the right material for the job and it’s going to the right place,” he said.
Mr Hall agreed that customers’ expectations would drive the change to make ordering and receiving goods easier. “Just think about the customer experience with Amazon, John Lewis, and even Uber. People want these experiences from all companies they deal with,” he said.
Kerridge Commercial Systems (KCS) CEO Ian Bendelow also cited Uber as an example of how businesses could engage with their customers. Speaking at KCS’s customer conference last month, he said: “If you look at Uber, there’s no reason why you shouldn’t be providing valuable apps so your customers can engage with you.”
Although being able to stuff an order sheet or picking note in your back pocket while in a merchant’s yard might be easier than handling a smartphone or tablet, mobile technology is having an impact on merchants.
However, said Mr Oldrey, systems suppliers needed to provide a solution that was an assistance to doing the job rather than a hindrance.
Ten-25 already has a mobile app for deliveries and has a “big release” for Unicode 360 coming out later this year that would be “heavily into tablet and phone operations”. Mr Gray believes that the “mobile revolution” is changing business.
“How companies operate, market themselves and interact with customers has been transformed by the emergence of mobile everything,” he said.
“Every aspect of your business can be handled from remote locations if your smart device or tablet is loaded with the correct software.”
Softec’s TRADER was developed as a portable and platform independent system before the advent of smartphones and tablets and customers’ trading websites are synchronised with their TRADER systems.
Last year Border launched a purchase order app and a stock check app. “It’s accepted technology now so it’s inevitable that more will need to be done on mobile devices,” said Mr Davies.
In the past year Intact also introduced a mobile platform. “Intact iQ Mobile uses the power of mobile to provide your customer facing and senior management team with access to the key business information and controls they need 24/7,” said Mr Gray.
When a company is considering a new software system, Mr Oldrey identifies three considerations which, together, are “a very potent combination” – operations, automation and strategic information.
“For the day-to-day operations of buying, stocking and selling you want something that’s quick and straightforward. You also want a system that automates repetitive, unskilled tasks so people can apply themselves to more valuable jobs,” he said.
If these two areas are running effectively then the system can produce strategic information which can drive the business to be more efficient.
Mr Davies urges potential customers to produce a wishlist of issues they want to address.
“The more you think about what you need the system to do, the more likely that the product you buy will meet those requirements,” he said. “Get it right and it can transform business; get it wrong and you can waste a tremendous amount of time and money.”
He also warns that buying IT is no silver bullet.
“A lot of companies have issues that are based around business processing; it doesn’t matter what IT system you put in place, it won’t solve some of those issues,” said Mr Davies.
For Mr Robertson identifies the three key requirements as integration, speed and scalability.
“To have all your information in one place is essential, and you want fast and easy access to it but, more importantly, you need to know it’s going to fulfil your needs one, two or five years down the line,” he said.
Intact Software says a new ecommerce project should be given the same consideration, time and resources, as opening a new branch. And choosing the right service provider is important too.
“Costly mistakes can be made when sufficient time and resources aren’t allocated to the project,” said Mr Gray.
“Dive into your ecommerce project without a plan and you’re sure to fall at the first hurdle.”
The difficulties lie when seeking the seamless movement of real-time data between back office operations and your online store, he said.
“There’s no denying that this will make your online presence more cost-effective and manageable but it’s not something you can turn on at the flick of a switch,” said Mr Gray.
Mr Hall agrees that the right ERP solution will enable all operations to work together, rather than separately but he has one main piece of advice:
“Choose the company that looks to grow your business, rather than their own software.”
Computer technology continues to develop and although driverless cars and delivery drones are unlikely to be used by the timber industry, other developments will be adopted.
“Selling online will continue to grow in importance as competition increases in the market,” said Mr Gray.
“It’s imperative that we facilitate our end users to respond to the consumer trends both for B2B and B2C transactions.”
Mr Hall believes that cloud computing will become more prevalent in the short to medium term.
“Cloud ERP offers merchants the opportunity to benefit from technology at lower cost of implementation and reduces the need for a full IT department,” he said.
“Cloud ERP also frees up time and bandwidth from maintaining software, servers and other technology infrastructure, allowing business leaders and IT staff to focus on growing the business.”
KCS also highlights the importance of the cloud, which it has been using for 15 years to supply solutions to customers.
“We need to be nimble and have business systems available on all devices, all over the world,” said Mr Bendelow.
Cloud-based solutions providing real-time data reduced the cost of deployment and provided a faster return on investment, he said, adding that the majority of KCS’s customers used the ‘K’ cloud.
Mr Robertson, however, is not so sure that the cloud is the future.
“The cloud is a costly subscription approach to software. It’s a service we offer but actively discourage in favour of saving our customers money,” he said.
“Increasing doubts over the security of the internet and the reliability of ISPs suggest that we can expect all manner of exciting locally-controlled devices that are interconnected,” Mr Robertson continued.
“It’s more cost-effective and reliable to purchase an in-house server than it is to go cloud based, and there’s the added benefit of control over your own hardware. Resilience and performance are the key. You simply can’t guarantee a connection to a computer hundreds of miles away.”
Mr Davies sees the future of IT as increasingly mobile and interactive.
“People won’t expect to go to a system, it will push information out to them in the way they want it delivered at the time they want it,” he said.
The connectivity offered by the internet of things was not futuristic, and was something businesses could be using now to improve efficiency, said Mr Bendelow.
“The Internet of Things is not a gimmick; it’s real,” he said, adding that it wasn’t available only in people’s homes, where they could control the heating and security cameras via the internet.
KCS created an “Internet of Things project” to improve workshop productivity for an automotive components company. By connecting the machinery to wireless data, and installing a screen in the workshop so employees could see how they were performing, productivity was improved by 16%.
While it may be some time before the timber industry adopts Amazon Go check out free systems, Mr Oldrey said the technology illustrated the potential of RFID for merchants.
“It could tell merchants which customers are on site so they can tailor information to them, perhaps allowing customers access from their smartphone into our system so they can build an order as they go round the yard, or create an order before they turn up so they can click and collect,” he said.
Systems Updates
Software suppliers are constantly improving their systems to ensure they keep pace with customer needs and new technology
Software suppliers regularly update their systems in response to customer feedback and changing technology. Intact Software, for example, makes more than 100 improvements to its Intact iQ every month.
“These can range from simple tweaks in the system to completely new modules,” said senior sales consultant Darren Gray. Border has launched two mobile apps for CounterAct – a purchase order and a stock check app – and Ten-25 Software is planning a tablet and smartphone-related release for its Unicode360.
Border has also integrated CounterAct with web trading platform Magento and it now offers its full range of ecommerce services to non-CounterAct clients who want to develop trading websites.
In April Epicor launched its latest version of BisTrack. In December last year it appointed cloud hosing company Netplan as an authorised partner for Epicor BisTrack. “Netplan has unmatched cloud capabilities that offer flexibility and choice,” said Stuart Hall, sales director, Epicor BisTrack UK and Ireland.
“The partnership means we can better support BisTrack customers on their growth path, providing them with hosting, consulting and advisory services.” Softec recently updated the CRM elements of its TRADER system to enhance the ability to target select groups of customers. It is also developing a “browser front-end” for TRADER.
“This functionality will ensure 100% platform portability so you can use TRADER on any device you can browse the internet on. We’ll also introduce optional touch screen technology,” said Mr Robertson.
In the past year Kerridge Commercial Systems (KCS) has invested 34,000 man days in developing the latest version of its K8 software. Its enhanced business intelligence modules now make it easier for companies to measure real-time performance against targets.
The latest version of K8 Web Builder provides an online trading platform offering real-time production information for B2B and B2C online trading.
Web Builder, which is pre-integrated with K8, allows customers to see their own prices and account information, and transactions are automatically fed back into K8.
A key focus for KCS has been ensuring that trading websites can accommodate mcommerce, or mobile commerce.
“We’ve spent a lot of time this year to make sure customers can optimise the mobile experience,” Tony Pey, head of product marketing, said at last month’s customer conference.
“Your customers need to be able to select products quickly, with clear display of quantity and break pricing.”
John Gray, director of technical research & toolsets, outlined the key features as scalability, flexibility, ease of use and self-service.
KCS has also launched a Moodle learning platform for its customers. Dubbed “The trainer that never sleeps”, the elearning tool features more than 50 courses and 100 videos giving instruction on K8.
Mr Pey said further enhancements for Web Builder included the functionality for web-based promotions, additional payment provider support, catalogue integration, and enhanced analytics.
Some of the newer K8 features have been designed specifically for timber companies and merchants. For example, the system shows when stock is on quay, and allows timber companies to include rebates in their cost calculations, or add them to the system retrospectively.
Driving Change
Stuart Hall, sales director, Epicor Software UK and Ireland, examines some of the trends influencing change in ERP software
Disruptive technologies and megatrends are shaping the future of manufacturing and in turn its supply chain, such as builders merchants and electrical wholesalers.
The fourth industrial revolution – Industry 4.0 – is the digitisation of the manufacturing industry and a realisation of the potential of the Internet of Things combined with artificial intelligence and data science.
It has been gathering momentum in recent years and is set to be transformative in 2017. Done right, Industry 4.0 will enable manufacturers to improve efficiencies while reducing costs.
The revolution is far from surprising. The Big Data mountain is growing beyond recognition and by 2020 there will be 30 billion connected devices on earth [The Internet of Everything is the New Economy, September 29, 2015, Cisco].
Machines communicating with people – and other machines – are creating so much data that we have generated more in the past two years than in the previous 5,000 years of human history [c4isrnet. com].
The information created by the increase of connected devices and machines represents a significant opportunity. It is now up to manufacturers and their supply chain, including merchants, to unlock it. By identifying, capturing and interpreting this increased volume of data, organisations can better understand their market and customers and gain market share.
We are seeing population growing in some nations and shrinking in others, a growing middle class, consumer markets shifting from the west to the east and an ageing population with fewer people entering the manufacturing field. Take heart, however.
The technology we are developing continues to make it easier to collaborate and is helping to attract the discerning millennials generation, which is anticipated to account for 75% of the global workforce by 2025 and will play an important role across all industries as it continues to evolve.
Most organisations know “business as usual” no longer exists, but the sheer velocity and the invasive nature of digital transformation can be overwhelming. Digital disruption is a major issue in every industry and senior executives are looking over their shoulders and wondering if they will be next to be ‘Ubered’ or ‘Airbnb’d’.
Digital disruption is causing organisations to think differently about their business models. For example, manufacturers are now selling direct to consumers in addition to supplying their distribution network.
Distributors are also offering new services to their clients, such as “click and fit” or “click and collect”.
Merchants and wholesalers have an advantage – unlike digital upstarts looking to make inroads into your industry, you have an established business to build on.
These new customer expectations and advances in new and converging technologies will require both manufacturers and merchants to transform themselves and new game changing business models may cause continued disruption. ERP solutions are already being adapted and updated to ensure users are ready for the change.
Are you ready for the future?
IJK looks forward to efficiencies
IJK Timber Group, operating from two sites in Northern Ireland, is about to implement K8 software from KCS
The IJK team decided to upgrade to K8 because their existing, ageing system lacked the functionality they needed for stock management and reporting.
“Our existing system was causing us to do too many workarounds in order to get the management information we needed to make better decisions,” said managing director Graham Knox.
“We liked K8 because of its ability to deal with timber lengths and widths and the fact it had an integrated financial package. We’ll also be using the CRM, warehouse management and delivery scheduling functions within K8 and are looking forward to working with the KCS team to integrate our hardwood tally devices into the system.”
Mr Knox believes once K8 is in place he’ll be able to enhance customer service levels through the simplified sales order process which will deliver a shorter lead time between receipt of orders and deliveries.
“Some of K8’s features will be new to us as a business, such as automated order confirmations and automated purchase forecasting. And, because we’ll be able to access product information much faster and be able to streamline and simplify many of our existing processes, I’m confident we’ll soon see efficiencies,” he said.
IJK, which has sites in Belfast and Dungannon, imports and distributes softwood and hardwood as well as constructional and decorative panel products.
Trading as Irvin & Sellers, Keizer Venesta and Northern Hardwood in the Irish market, it was purchased in an MBO in May 2004. The company supplies kitchen manufacturers, joinery works, builders merchants, shopfitters, furniture manufacturers and builders.
Chambers calls for encore
James Chambers Timber Merchants has replaced its manual processes with a system that can handle its complex business needs
When Yorkshire company James Chambers Timber Merchants Ltd decided to replace its manual processes with a more hi-tech solution, it chose a single system capable of managing every aspect of operations.
The business, which comprises four companies and has trade counters in Halifax and Huddersfield, processes up to 100 orders a day. It also operates sawmills and manages an inventory of more than 3,000 products, including 200 separate product lines.
The company opted for Encore from Anagram Systems which incorporates stock control, trade counter point of sale, purchasing, production planning and customer relationship management with full financial management functionality.
“I need visibility of the raw materials and finished products we have in stock to fulfil orders on time. I also need to be able to identify shortages long before they have the potential to disrupt operations,” said purchasing manager James Moore.
“Production planning is straightforward as Encore includes timber cutting management functionality which enables us to calculate the quantities and types of raw materials we need for each job. Works orders are key, helping us control every stage of production.”
The system also helps the team minimise waste and identify areas that could be improved.
Mr Moore said James Chambers had also benefited from Encore’s Trade Counter management functionality which provides staff with everything they need to process the large volume of sales enquiries and transactions.
Completed sales are automatically shared with the warehouse for picking, packing and delivery scheduling.
Once a sales transaction is processed stock numbers are updated automatically. Encore also helps James Chambers to spot buying patterns.
“Encore helps me identify fast and slow-moving stock lines, enabling us to anticipate demand and identify buying patterns.
It also includes an automatic purchase order function which makes buying suggestions based on demand history,” said Mr Moore.
The software has also helped the financial management team.
“Manual bookkeeping and accounting used to be highly time consuming,” said Mr Moore.
“Automation has reduced the team’s workload substantially so they can focus on analysing the company’s financial performance and identifying areas for improvement.”
Most recently, Encore was used to organise stock locations in James Chambers’ new warehouse, a major project that had to be completed in two weeks.
“We couldn’t afford any disruption to operations and needed to be able to locate products quickly from day one,” said Mr Moore.
“We used Encore to produce barcoded product labels for racking, bin and shelf space. Encore was a key element in the success of relocating our stock and enabling warehouse staff to find products and fulfil orders as quickly as they did before the move took place.”
He added that as James Chambers grew, Encore would continue to play an important part in day-to-day management and strategic planning.
“We’re planning to make much more of Encore’s marketing functionality to help us target new prospects and further increase our sales,” said Mr Moore.
