Wiring Your Management Workflow
It may be a small step up from a chalkboard and Scotch™ tape, but it’s not necessarily the best answer if you’re turning out multiple jobs every day, and trying to keep track of an inventory coming in from every corner of the globe.
There are digital-management options available out there. Several companies offer industry-specific software that addresses issues from job management to scheduling to inventory.
Their biggest problem? Getting shop owners to accept the idea that technology in the office can make as much of a difference to the bottom line as buying a new router or CNC for the shop.
SOMETHING FOR EVERYONE?
Software companies, of course, would like every shop to invest in their products. However, they admit it may not be quite as important for smaller operations.
Louis Gryga, chief executive officer (CEO) of Rosemont, Pa.-based Aegis Commerce LLC, says he’d like to think the person just opening a business would make it a priority to take the management process digital.
“Even before buying equipment, the person should have an idea about how the business flow will be, where the check points are, how they’re going to get paid and what accounting environment they’re going to use,” he says. “If they look at that closely at the onset of the business, they’ll make sure they’re moving in the most optimal direction to meet the needs of their clients, their vendors and themselves.”
A more-likely scenario, though, is where the shop reaches a level where it’s turning out multiple numbers of tops each day, but things aren’t necessarily going smoothly.
Harry Hollander, of Reno, Nev.-based Moraware, says that people often opt for a digital solution when they reach a crisis with their information management.
“One indicator is how you’re treating your customers,” says Hollander. “If a customer calls to ask what’s going on with his kitchen and you can’t answer him or you have to go to three different places to find out or you have to call him back later, that’s a key indication you need to computerize your system.”
Ravi Rudraraju, sales manager of Chicago-based Stone Profit Systems, says that’s certainly one indicator that something has to give. Others may be sending the installers out to the wrong jobsite or on the wrong day, or using the wrong slabs to cut a job.
Vipul Shah, president of Schaumburg, Ill.-based Global E-Sourcing, says there are still other indications that it might be time to do things differently.
“If you have to go out into the yard to figure out if you have a particular slab or remnant that you can use, or you’re unable to project what kind of volume you have, those are triggers that you have an imminent need to go digital,” says Shah.
Still another is when you have real inconsistencies in your quoting process, according to Hardy Forkapa, president of Storysville, Ohio-based Pinnacle Software.
“You can give the same job to three different people in the office, and they will come up with three different prices,” he says. “Then, you’re wondering how somebody came up with their answer. This is repetitive; you type in the date you want and you get an answer.”
PROPAGATING THE SYSTEM
Different software manufacturers do different things in different ways. Some sell extensive packages; others offer their products as individual modules. Depending on the software and the information put in, what comes back out can differ, as well.
However, all focus on a few key areas, starting with what happens when a customer comes through the door.
Because only a percentage of jobs quoted turn into jobs cut and installed, it’s important to be able to do those estimates quickly and accurately. In other words, says Larry Chapman, sales director for La Habra, Calif.-bases Suitable Solutions, you need to automate the process.
“You want to have the customer select the material they want, the edge, whether it will have an undermount sink, how big the radius corners will be,” he says. “You want to also be able to tell them how much more it will be if they go with a more-expensive slab, or they want a triple ogee instead of a bullnose.”
Forkapa says this is a step that’s often hard for his software customers to take, because they actually have to sit down and put costs to such items as the prep time for an undermount sink, or the difference in labor between a 2” radius corner and a 3” radius.
“One guy told us that now when he quotes a job he knows he’s made money,” says Forkapa. “Another told us it had doubled his sales. He’d been stuck in the office doing estimates, but once he had our system in place he was able to go back out and call on his bigger customers.”
Along with ease in writing estimates, these programs will often let the shop owner track sales performance from a number of different standpoints.
“You can track your sales people through leads,” says Global’s Shah. “You can track leads coming in, what was the last action required on the lead, what was done, what’s the status of the quote, and you can track ageing leads. In short, you can see what sales were generated by each of the people on the sales floor.”
Once the customer has accepted the estimate, and the go-ahead has been given, these software packages track the job through the shop and back out the door, having connected with the templater and the installers along the way.
Some software send jobs automatically from the sales floor to the shop, while others require a review and approval before forming a job ticket. However, an important goal is to cut down on the number of times the basic job information is entered, reentered and printed out.
“The goal is to create a digital environment that propagates the system,” says Chapman. “When you do a quote, you want to automate the budget, automate the drawings, and automate the paperwork to the shop. The average company may enter the same job information eight to 12 times. You can see that you’d be so busy you’d have to add another person.”
Again, what happens with that information once it gets to the shop varies by software. Moraware’s Hollander says scheduling is one of the strengths of his software.
“There’s just so much visibility in the schedule for everybody,” he says. “The shop owner can type in a person’s name or address and get everything about the job right away.”
How that’s done varies by client. A small shop may simply check boxes at computer stations set up around the shop. A large shop may introduce a bar-coding system.
“For a large shop, it makes sense to break things down into the various steps it’s going through, and track inventory and job details along with that,” Hollander says. “We find with our biggest customers that they’re tracking the saw, the CNC, lamination – all the different work centers in their shop.”
The information that comes back out of the system can also vary ,depending on what the shop owner wants. While it’s nice to be able to tell a customer where his job is in the shop’s workflow, or know how long it takes to fabricate a particular edge, both Aegis’ Gryga and Global E-Sourcing’s Shah say it can do much more than that.
For instance, Gryga says not only will the system look at what’s being done today, but it can also compute the output – by employee or piece of equipment – by the day, week or month.
“You can start to look at where your bottlenecks occur, and what your lead times are,” Shah says. “And, if somebody needs a job in five days and your normal lead time is ten, you can know whether you want to take on that job, and what to require in expedited charges.”
TWO-STEP TRACK
While tracking both your human and equipment resources as jobs move through the shop can be a big help, there’s another important component to stone fabrication – the stone itself. Most of these systems go well beyond telling you how many slabs of Uba Tuba are sitting in the yard or warehouse.
Hollander says inventory is really a two-step process. The first involves the purchase orders that get it into the shop and knowing how much each slab – or sink or faucet – costs, and the second is allocating it to a particular job and knowing the sales price.
“Our system records not just purchase orders, but it also recommends purchase-order quantities based on usage and what you have in-house,” says Shah. “You can make changes, receive complete purchase orders or partial purchase orders, or even create back orders within the system.”
As with other parts of these programs, Suitable Solutions’ Chapman says the details one shop owner may want out of an inventory program aren’t necessarily the same details another would want.
“Once slabs are brought into production, they need to be tracked,” he says. “However, there’s also off-fall from most jobs, and shop owners like to keep it on the shelf for 30 days until the job is done and everyone’s satisfied. Or, if it’s a fairly large piece, they want to keep it on the shelf or on a rack for another job.”
Remnant management is a critical part of inventory management, says Pinnacle’s Forkapa, although he adds it’s probably more important for larger shops.
“Say that you have a half-slab going back into inventory,” he says. “Our system goes in, resizes the slab and recalculates the dollar value based on square footage. Then, you put it into a numbered bin or rack so you know where it’s at.”
Aegis’ Gryga says his system does everything from alerting the shop owner that a product needs to be reordered to preparing a purchase order to matching the supplier’s bill to the p.o. number.
At this point, a bar code system can be critical, he adds.
“Receiving can be done through the use of a hand-held device so when the slab is received it can be defined by length and width and a bar-code or tag can be generated,” he says.
Stone Profit’s Rudraraju says his system even goes so far as to provide a way for homeowners to search a shop’s inventory online by color, point of origin or finish – and find out how much the shop has in stock.
Rudraraju calls inventory information among the most important things a shop owner can track, and not necessarily for the obvious reasons. For instance, it’s safe to assume potential customers are getting estimates from some of your competitors, but unless you know what your competitors are charging, you won’t know when you’re too high – or too low – for your market.
“You can check out how many times your quotations have been rejected because of your pricing, and what materials are involved,” he says. “That way you can come up with pricing based on reason, rather than intuition.”
And, he adds, an analysis on fast-moving materials may well encourage a savvy shop owner to start buying some products by the container or bundle.
BOTTOM LINES
What each shop owner gets from computerizing shop-management functions, and how it’s done, is up to the individual. However, regardless of the operation, it would be handy to have the data fit with the rest of the business operation.
These products do just that, although not all in the same way. Most interface with such common financial software packages as QuickBooks® or Peachtree.
“Our program transfers to typical accounting packages,” says Global E-Sourcing’s Shah. “We do invoicing out of our system. We don’t generate things such as profit-and-loss statements or tax documents, but we do provide sales figures, margin figures – really all the business information you need to know.”
“We interface with QuickBooks and Peachtree, and we push all the information into those accounting systems, including customers, products, vendors, payments and invoices,” says Aegis’ Gryga. “We totally coexist with the general ledgers.”
The one system that doesn’t do this is Stone Profit Systems, which offers an industry-specific accounting package that Rudraraju feels is comparable to those business software packages.
“One of the nice things about our system is that not only do we handle all the financials, but we also set up credit limits for various builders,” he says. “You can define, when you’re bidding a job, how much they have in receivables with you already. It lets you work with builders on multiple jobs.”
Although these software manufacturers believe, on the one hand that everyone should be using their products, realistically they say, there are some shops where it’s a better fit than others.
Pinnacle’s Forkapa, for instance, notes that shops that have been in business for a long time, where processes are in place and principals may not be computer-savvy, probably aren’t going to have a good comfort level with these programs.
On the other hand, Suitable Solutions’ Chapman says there’s also a different business profile where this could enhance what’s already being done.
“A lot of it depends on what technology they’re using in the shop,” he says. “If we see a shop that’s using a router and an electronic-templating system, that’s a shop that has a large interest in going to a digital environment.”
For those who can see the benefit of taking at least some of their processes digital, but are a little leery of a large investment, both Forkapa and Global E-Sourcing’s Shah suggests programs that Shah calls “scalable.”
“You don’t want a solution that as your business grows you have to get rid of it,” he says. “But, you also don’t want a solution that’s so big you’re only using pieces of it or that doesn’t offer other functionality as you grow.”
And, growth, and dealing with it, is what these programs are all about.
“Usually what happens, as your business grows, is you add more people and you add more paperwork and suddenly it becomes a mess,” says Moraware’s Hollander. “A digital shop is one way to solve that. It’s about having a process that will allow you to grow your business without having to add people and tons of paperwork.”
The real value of these programs is optimizing your business flow, concludes Aegis’ Gryga.
“A system should allow you to do things once,” he says. “You can place information in the computer one time and have multiple people in the organization be able to view it. That cuts down on repetitive processes, and cuts down on errors.”
This article first appeared in the January 2008 print edition of Stone Business. ©2008 Western Business Media Inc.