Chain Gang

By SmallBusinessComputing Staff | Posted August 01, 2000
by Angela R. Garber

It's not illogical to assume that a company with a name like Automationdirect.com knows a thing or two about using computers to keep business processes going. But just because a company knows how to automate one thing ­ in this case conveyor belts and the systems that operate them ­ it doesn't necessarily follow that it has smooth and speedy operations all around.

And for a while, this Cumming, Ga.-based direct marketing company was getting the job done at less than optimum efficiency. But now things are looking up. The company uses a powerful combination of software, the Internet, electronic data interchange (EDI), and a bar-code system to keep track of vendor and customer accounts, shipping, invoices, billing, and inventory to automate its supply chain.

"We started six years ago," says Tim Carroll, team captain of the technology strike force (the "IT Guy" to you and me) at Automationdirect.com (ADC), "and since that time we've tried to take everything from product development, to purchasing, to tech support, to sales and make it more efficient."

ADC started out as PLC Direct, selling only programmable logic controllers (the small computers that run industrial controls including conveyor belts, switches, and photo-electronic eyes) via a toll-free number to warehouses, car washes, and anybody else who needed to make industrial systems start and stop automatically. But as business picked up and customers started asking for accessories, components, cables, and switches, PLC Direct changed its name and its inventory ­ and its systems, too.

It's one thing to keep track of a handful of products, vendors, and customers. It's another thing altogether to keep track of hundreds, if not thousands. ADC switched from the mail-order software (Mail Order Manager, or MOM) that it had used since it opened its doors in 1994 to the much more expensive, but yet much more functional, Profit 21's Acclaim 10. With the new system and a handful of recommended third-party packages, ADC has been able to support more customers, with more products, at greater speed and with better service.

TAKING ORDERS
"We used to have all orders coming from catalog sales on a toll-free number, so all of those orders were coming in through our sales group and being keyed into the system manually," says
Carroll. "We launched our e-commerce site in March 1998, and we have that totally integrated into our Profit 21 system."

The complete catalog is posted on the Internet, and orders that come in from the Web site do not have to be keyed by an order taker as they would if they came in via phone. "It's completely automated so that as soon as a customer orders that equipment on line, it immediately goes into our warehouse system," he says. "And typically we're picking and packing that order within half an hour, and getting it ready to go out the door."

The new systems have also allowed ADC to carry some items that it otherwise would not be able to offer to its customers. The steel enclosure systems that house the industrial controls are too large and cumbersome for ADC to handle on its own, but it has been able to use EDI ­ a method of exchanging information as data formatted for computer processing ­ to "e-broker" a deal with the manufacturer.

"We're talking about an enclosure that can be as large as 72 square feet. Just because of the warehouse space, there's no way we could handle it on our own," Carroll says, "so instead we EDI the order information to the manufacturer, and those parts ship straight from that warehouse."

"That relationship has worked out so well," he says, "that as time goes on we'll continue to look for that type of opportunity in other areas."

PURCHASING AND INVENTORY
ADC has always been confident that it was getting products ordered from vendors in a timely manner, and that they were inventoried properly. But before they invested in the new systems, it took a lot more paper, energy, and time.

For years ADC did purchasing manually ­ forms were filled out by hand, or printed out of the computer and then faxed to vendors. But now communication with vendors also using EDI is practically paperless. "With electronic data interchange we can send out purchase orders without paperwork, and it just goes automatically out the system to the vendor," Carroll says.

To keep the warehouse running smoothly once the orders come in, ADC uses a warehouse management system, Pathguide Compass, which coordinates with Acclaim. Vendors are required to bar code all product packaging before it even enters the warehouse.

"All of our parts are bar coded, so we have a very efficient warehouse ­ we can basically pick an order just by scanning the parts and throwing them in a box," says Carroll. "And we're getting over 99.9 percent shipping accuracy through that system."

SERVICE AND SUPPORT
Customers cannot be overlooked in the supply chain. Requests come in from them, and products and information go out to them. If that communication is not handled efficiently, there's little reason to bother improving the connection with vendors.

Once an order is placed, a customer likes to know when it was shipped and when it will be delivered, and she usually wants an instant answer. "Before, if a customer called and wanted to know where their shipment was, we would have to call UPS, find out what the status was, and then call the customer back," says Carroll. "But now a customer can go in and look at their order history on line. They can click on an order, get a tracker number, and immediately link to UPS to find out the status of a shipment." This change is due not only to the improvement in ADC's service, but to new features offered by UPS, as well.

To improve technical support, ADC has helped the customers help themselves. The company provides both technical specs for products and PDF-formatted user manuals on line. "They're able to answer their own questions," says Carroll, "and it saves a lot of technical support phone calls. It gives the customer more of a good feel about the part before he actually buys it."

The creation of a "tech forum" on the Web site also allows customers to help one another and even gives ADC extra insight into its products and their applications.

"Customers can pose a question about a problem that may be perhaps too application-specific for our tech support group to answer," says Carroll. "But another customer that deals with the same type of issue ­ like how our products work in the car wash industry ­ might have an answer."

The bottom line for ADC is that automating its supply chain has improved both relationships and business. "A lot of the things we've implemented are 'self service,' and we're finding that whenever customers and vendors can help themselves, they're happy with that," says Carroll. "And it's definitely helping us improve our profits, save on our head count, and increase sales." There's no arguing with results like that.

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