The Soft Sell Choosing and Using Software to Make Your Business Hum
 
July 1st, 2004

 

by Jeffrey Steele July-August 2004

Examining the variety of software products serving today’s ceramic tile distributors and dealers begs one question. How did companies survive before the advent of computers?

A growing number of software providers serve the industry with products capable of eliminating countless business management headaches that plagued earlier generations of tile dealers and distributors. As a bonus, computerized functions permit detailed inventory tracking, automate buying, and develop sales history, all aimed at making your business more profitable.

TileDealer has paid particular attention to the way software addresses the particular needs of the industry while also providing important management and B2B functions.

A number of products are very good at supporting the essential business needs of the industry. First Flooring Software, from CCS Computing Services LLC, manages every aspect of business from the point of customer contact right through the deposit of the customer’s payment in your account, reports the company’s vice president Fred Campbell. Although First Flooring doesn’t offer an accounting function, it interfaces with QuickBooks.

Resource and Financial Management Systems Inc., whose acronym, RFMS, is also the name of its software program, is another full business management system, including all areas of business from the point of sale and order entry through purchasing, receiving, accounting and job-by-job cost analysis, says company president Terry Wheat.

Long a leader in the business, Dancik International develops and sells software exclusively for the flooring industry. Tony Thomas, Director of Sales for the 20-year old company, says flooring is the only industry the company plans to serve. Business functions such as general ledger as well as warehousing and purchasing are part of the basic 32-module package. Dancik sells the package at a single price for as many users as the dealer requires, as opposed to licensing individual users.

Prophet 21 is a 37-year-old company specializing in products for durable goods distribution and offers a full enterprise software program called CommerceCenter. It includes inventory management, order entry and purchasing, as well as a full accounting and financial package expressly written for the company. Vertical marketing manager Kevin Kapala says, “We absolutely specialize in tile, but we have the experience and know-how of working with other distributors in durable goods.”

“We have a group of some of the more major tile distributors in the marketplace, who we rely on heavily through an advisory council,” says Kapala. “And they work hand in hand with us to help develop software features needed for the tile industry.”

Many Prophet 21 employees worked for tile distributors before joining the software manufacturer. “They can talk the talk and relate to distributor customers,” Kapala says.

Managing tile inventory

Tile dealers have particular needs in tracking inventory down to run lots. “You may buy a specific SKU, but if it comes in three or four different run lots, it’s like buying three or four different SKUs,” says Wheat at RFMS. “The idea there is if the consumer wants the same product for another area of installation, that’s totally possible, including matching run lot.” The software offers complete inventory management down to the SKU level, including run lot management, and sales histories.

The RFMS inventory management module is sufficiently flexible to allow Dealers to define different areas to use, then customize the way the software serves up data. These “user-defined fields,” give the dealer control over how the data enters the system, and how that data is stored. Because the product catalog module integrates with the procurement module, which in turn integrates with inventory management, the software offers consistency from beginning to end. The company plans to add B2B procurement to facilitate purchase orders and invoicing.

That capability is vitally important, especially as real time procurement becomes more of a reality, says Campbell. Product sitting in a warehouse is a big business expense. That cost represents not only the cost of procuring the product, but the warehouse space to store the product and the manpower to manage the product. “So by having a good tool like this, that will help you minimize your stocking levels, and reduce your day-to-day inventory,” Campbell says.

Aya Associates’ Comp-U-Floor software is a Windows-based point-of-sale retailing and distribution system designed exclusively for the floor covering industry. Company president Edgar Aya notes that inventory management capabilities for ceramic tile have two distinct requirements. First, it must track dye lots and colors. Second, the amount of ceramic tile is measured in different ways for the purpose of inventory, including pieces, cartons, pallets, square feet and square meter, to name a few. Comp-U-Floor manages these needs and also calculates optimum inventory levels and reordering points.

Aya points out that another important aspect of inventory, especially for large dealers, is bar coding. Bar coding inventory facilitates highly efficient warehousing and enables dealers and distributors to easily and accurately determine physical inventory. Comp-U-Floor produces bar code labels at the time merchandise is received, and through its Windows interface, handles any Windows compatible device that uses a bar code. “Also, many of these ceramic tile companies import their products from overseas,” Aya says. “Our Comp-U-Floor has an interface with the metric system used outside the United States. The system can allow owners to keep track of their containers of tile or stone from the minute the purchase order is placed, through fabrication, shipments and customs at port of destination. The system calculates all expenses associated with each container, and arrives at a landed cost per square foot of tile.”

Dancik International offers an Internet-based shopping cart option that allows users to review buying histories and open orders. It is also capable of monitoring international deliveries.

Like many of the software packages, Prophet 21′s CommerceCenter is expressly designed to closely track lots and shades. However, the system can also handle multiple currencies. “And our importing capabilities are very strong – from the originating port, on the water and at the landing port,” he notes.

In the latest release of CommerceCenter, Prophet 21 includes an integrated radio frequency warehouse package, which can help distributors track their inventory in the warehouse. This package is written by Prophet 21 and is not a third-party supplied function.

Procurement and inventory management are also two of First Flooring Software’s strengths, says Campbell. For inventory management, the software tracks vendor lot number and dye lot. If a project requires additions later on, it’s easy to match the dye lot used in the original work, Campbell says.

The software also tracks commitments, allocations and staging, he adds. That means dealers and distributors can identify a particular product, dye lot or color on the inventory screen, and determine how much of that product is committed or allocated to customers.

Strongsville, Ohio-based Pinnacle Manufacturing’s Counter Intelligence software simplifies procurement with a direct purchasing option. Sales manager Ariel Soto points out, “If you create a work order in our system, and it’s for a product you don’t have in stock, you can automatically generate a purchase order from that work order, and then of course generate those purchase orders out to your vendors.”

Counter Intelligence also features a materials ordering module that allows dealers and distributors to cut purchase orders, order materials for specific jobs and track stock. “It takes it from the beginning purchase order stage to ordering, receiving and allocating materials to specific jobs,” Soto says. The materials ordering section works hand-in-hand with the software’s inventory management system module, which was implemented earlier this year. It tracks quantity on hand, quantity on order, allocated jobs and unallocated inventory.

Sales history plays a role

The ability of any dealer or distributor to develop a history of various products is important in planning and future buying. Some software plays up that capability.

For example, RFMS software delivers history on where specific SKUs and run lots within those SKUs have been sold. Dealers and distributors can track trends and determine what products are favored by particular markets. Having that information allows them to decide on the right showroom displays, what should be inventoried and what products are selling profitably. All these bits of data are byproducts of users simply using the software the way it’s designed for procurement and inventory management, Wheat says.

That’s particularly important in the tile marketplace. “In the hard tile business, because there’s such a broad array of product, it’s important to know what’s important,” he quips. “There’s so much that you can get lost in the sea of product. But if you’re able to generate good data, you are able to make good decisions based on fact, and not on feeling.”

First Flooring Software also tracks commitments, allocations and staging. Dealers and distributors can identify a particular product, dye lot or color on the inventory screen, and determine how much of that product is committed or allocated to customers. “That’s really nice, because it makes it easy to see where you’re putting your product,” Campbell says. “In some cases, you’ll have more commitments than what you have in stock. You can actually recommit and reallocate product as needed.”

Meeting other needs

Aya Associates’ software has evolved over the years to best meet the needs of companies providing flooring, and is now a fully integrated system addressing the needs of different segments within the floor covering industry. One segment is floor covering retailers and installers.

“We make a big distinction between this group and ceramic tile dealers that don’t install,” said Aya. Other segments the software serves include stone fabricators, commercial installers and multifamily resident commercial installers.

The system allows ceramic tile retailers to process each sale at the showroom, and produce a ticket to complete the sale. The software also keeps track of cash drawer receipts, so they can be balanced at the end of the sales day. In addition, it controls inventory and calculates commissions, provides accounting reports and, most important, provides managerial reports. These reports permit the business owner to make crucial identifications, such as the size of profit margins, and the most profitable product lines and clients.

“Right now there’s a new breed of handheld pocket PCs that also have bar coding capabilities, and have a wireless interface,” Aya reports. “Those devices are optimal in tracking inventory in the warehouse, and our software is compatible with those devices.”

Among its many other capabilities, Comp-U-Floor also permits downloading catalogs and price lists from vendors offering B2B through the Web. Users can also upload their purchase orders through the Web, and even receive the vendor invoices and acknowledgments automatically through the Web, Aya says.

Despite the company’s technological advancements, when customers call the company, they’re greeted by a live human being. “I’m proud of the fact we still provide service the old-fashioned way,” Aya notes.

Pinnacle’s Counter Intelligence is also a complete office management system for tile businesses. It is based upon units of measurement like linear feet, linear inch, square foot and square inch, said sales manager Ariel Soto.

The product’s additional capabilities include a scheduling feature that allows dealers to schedule measures, delivery, installation, service or repairs, Soto notes. “It will do your estimates, your proposals, [and] print your invoices,” he added. In June the company introduced CounterIntelligence 2, a Web-based program that will allow estimating over the Internet from anywhere in the world.

Chameleon Power, a Novi, Mich. company offers a “front end” marketing package. “In general, our technology is a marketing technology,” rather than a business management tool, said Chameleon Power president and CEO Dan Dempsey.

Chameleon allows consumers to choose a product, then upload a room scene and place the product in the scene. Consumers can change out myriad elements of the decor, including flooring, wall coverings and backsplashes, to name a few. When a consumer decides he or she likes a given product in a room scene, that image can be saved in the individual’s personal project folder. “It helps sell the product of the distributor, dealer or manufacturer, helping the decision maker focus on the type of product he wants to purchase, select a product and make a purchase,” says Dempsey.

“And from there, we can hand off that information to the appropriate parties – in the case of ceramic tile, a ceramic tile dealer or distributor,” Dempsey says. “And at that point, it literally could pull that specific SKU data and go to the point of purchasing online. Or if it’s in a showroom, result in the person in the showroom processing the transaction.

“The goal of our software is to narrow the decision cycle, so the building owner or homeowner can get to the point of purchasing, rather than having to wonder what to buy.”

Dancik International offers a visualization option which allows the customer to see the product in an actual room setting. From this initial customer-sales contact, the software can generate an estimate, order product, and trace its delivery.

With all these options, how does a dealer decide on a software package? Thomas advises making a choice that can grow with your company and meet not only the daily demands of your business, but the unique challenges as well. In other words, he says, “Make sure the software is deep enough to support your business on the weird days.”

 

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