Platforms may change, but the goal is the same: create clarity from confusion.
In 1901, Greek sponge divers in search of treasure brought to the surface from an ancient wreck a strange, encrusted geared device. Dating from the first century B.C., this so-called Antikythera mechanism turned out to be a radically advanced geared machine that could calculate the position of the sun and planets, the phases of the moon, and even future solar eclipses. In short, it was a piece of technology that enabled the ancient Greeks to predict the future and adapt to what it would hold.
Seems we’re not that different from our ancestors. Today, we turn to technology in the form of business management software such as Enterprise Resource Planning (ERP) platforms that can collect, store, and interpret business data. And while the tools have changed, the goal has not: to better solve complex problems. “LBM dealers are looking for tools that best enable their employees to be productive and respond to customer needs no matter where they are,” says Jason Parchomchuk, product manager, building supply for Epicor Software Corp., a software company based in Austin, Texas, that provides technology solutions for manufacturing, distribution, retail and services industries. But there’s a changing face of technology, one that is quickly adapting to current world situations and providing new ways to succeed in the face of these unprecedented challenges. “With supply chain disruption and pricing volatility, strategic pricing, analytics, and forecasting are even more crucial to maintain profitability and help overcome issues,” says Parchomchuk. “Their customers are looking for flexible, safe options to do business with their suppliers—via mobile, online ordering and payment, and curbside delivery.”
Changes in the COVID-19 world
When the World Health Organization first named the 2019 novel coronavirus outbreak as COVID-19, ERP developers rationalized—as did most people—that any disruption in business would be short-term. Little did they suspect that the impacts would be as far reaching as they have proven to be. As a result, it has become imperative for businesses to embrace technologies that enable them to thrive despite business conditions. “2020 really showed us and our whole industry that you can still be successful during great uncertainty,” says Amy Warren, director of business and sales development for Weyerhaeuser Distribution. “COVID-19 forced us out of our routines and pushed us toward innovation where all of us could see the benefits of embracing technology.”
One methodology is to utilize technologies that create efficient remote working environments that still deliver flawless customer service. “The demand for stable and secure remote access to software systems and sources of record is the most important trend we’re seeing for our customers in this ‘new normal,’ says Cindy Carlson, senior account manager for DMSi. “SAAS software solutions allow dealers to safely grant access to their users no matter where they’re working. Communication and collaboration software like Zoom or Microsoft Teams let service teams continue working together to keep processes rolling, answer customer questions, and provide updates. Mobile apps are vital to quickly retrieve data when reps are out in the field. They can manage the account from the palm of their hand.”
Coupled with an LBM distributor’s staff working remotely is its customer base shopping remotely—a trend that is on the rise for B2B retailers. “With showrooms being closed, businesses are looking for new ways to interact with customers,” says Cindy Carlson, senior account manager for DMSi. “An e-commerce solution enables your customers to review stock, place orders and self-manage their account. While e-commerce is not new, the sense of urgency is. Everyone is now in a race to implement it.”
Cary Anderson, vice president and general manager of North America for Kerridge Commercial Systems, also sees the increased importance of leveraging technology. “With the current pandemic situation, dealers have adjusted rapidly to the ‘new normal’ by better leveraging technology,” he says. “Dealers who already had an e-commerce solution heading into the pandemic were able to exploit their competitive advantage as consumers began to ramp up their online ordering and demand for curbside pickup.”
Of course, e-commerce comes with challenges. For example, the Buy Online, Pickup in Store (BOPIS) e-commerce model—a staple of B2C commerce that has been a big player in the recent economic success of big box stores such as Home Depot which, according to its most recent annual report, accounted more than 50% of its $10 billion in online sales to BOPIS— now needs to be adapted to B2B transactions. As John Maiuri, president of the LBMH Division of ECI explains, “Among the many challenges for dealers that are looking to adopt a BOPIS e-commerce model is ensuring they have an impeccable inventory tracking process in place. To ensure success, dealers must have an accurate accounting of all sales information, credit card details and inventory quantities so that when a customer comes to pick up their purchase, items are staged, payments are completed and the experience runs smoothly.”
Ralf Benett, marketing manager for Paladin Data Corp., agrees. “For years, the industry has been moving toward being more mobile and customer-friendly with mobile applications and more shopping options,” he explains. “The challenges presented by the coronavirus shutdown only exacerbated the adoption of those technologies. Mobile technology allows stores to serve customers all over the store and even outside and on deliveries instead of funneling them through an in-store checkout line. They also simplify programs such as curbside pickup and remote payments. Contactless payments make in-store checkout safer, which is an important issue with shoppers today. And omnichannel operations that link online and in-store sales facilitate programs like BOPIS, which allow stores to serve customers outside normal business hours.”
Software adapts and delivers
In light of these business environment changes, technology is evolving to provide solutions that grow business, build customer relationships, simplify process, and reduce overall costs. “The key to growing any business is having clear, up-to-date information on how that business is performing in real-time and have a straightforward way to manage critical, integrated operations,” says ECI’s Maiuri. “A business management software solution like an ERP offers a suite of integrated applications that a business can use to manage different aspects of their operations, like accounting, purchasing and inventory, business reporting and customer marketing…. Everything an LBM and hardware business could need is all in one place, cutting down the amount of time an owner needs to spend on routine business management, allowing them to focus instead on growth opportunities.”
LBM dealers who are seeking solutions through technology share two primary needs explains Matt Meyers, founder and CEO of Yesler. “First, their employees’ time is valuable. Software should empower people to do more with their valuable time. Second, too many LBM processes and too much knowledge is tied up in specific individuals. This creates a risk that when these people retire, their knowledge leaves with them. Yesler leverages an LBM dealer’s own relationships, data, and operating knowledge so the dealer retains the advantages they have earned.” For example, Boise Cascade’s software is intended to improve the efficiency and profitability for its LBM customers and make many of the day-to-day processes run smoothly. It recently added a new tool to its BC Connect program so that users can create and compare multiple versions of material cut patterns to help them compare the key parameters of waste, offcuts, and raw material usage to find the best solution based on current inventory and on-hand materials. BC FloorValue—an integrated part of Boise Cascade’s BC Framer software— identifies potential floor problems by allowing a dealer to quickly check floor plans and evaluate different product series, on-center spacing and sheathing thickness from a price vs. value standpoint.
Epicor’s new BisTrack Kinetic system simplifies common LBM business processes and enables users to do business and serve customers at any time from any location. Its BisTrack Web Store API allows users to integrate their Epicor BisTrack solution with third-party or custom web store applications for online catalog and sales capability.
Weyerhaeuser recently added an electronic transfer feature to its Javelin v6.3 software that takes a Javelin project material list and sends that order directly to the lumber dealer’s local Weyerhaeuser distribution center for processing.
And in the case of DMSi, its Mobile Warehouse Tools app provides functionality for counting, moving, picking, and receiving inventory as well as completing production, while its PartnerView e-commerce platform now includes integration of a free chat tool along with the ability to have customers initiate pick up requests.
For deck projects, Seljax has developed SeljaxDeckDesign.com, a new opportunity for LBM Dealers and LBM Suppliers to enhance their online capabilities. The online software provides the ability for consumers and contractors to design their own deck online, and the site can be linked directly to an LBM dealer’s website.
To respond to coronavirus challenges, Paladin recently enhanced its Mobile2 suite of products. Its Paladin Pilot remote management software is available for free for the first six months, and its latest release includes new mobile capabilities, integrations that enhance online presence, and new methods to expand product lines. “We are constantly enhancing our products,” says Paladin’s Benett. “We continuously release updated versions of Paladin so our clients are always running the most up-to-date software in the industry.”
In June, ECI announced a variety of enhancements to its Spruce and Rock-Solid MAX software solutions that include an e-commerce API that allows users to work with the web developer of their choice and allow documents to be viewed and data collected for the creation of new accounts. “The Spruce suite of software gives our customers a way to manage their entire business’s operations in one integrated solution” says ECI’s Maiuri.
In September, Yesler began to test its Buyer’s Network, a new visual tool for LBM buyers designed to organize and manage the buying process. According to Yesler, the software allows buyers to leverage their networks of relationships with suppliers, while Yesler organizes needs to prevent supply outages, monitor communications, and negotiate the best deals. It then tracks commitments and orders, after which it utilizes that data to gain insights.
And in October, Buildxact launched a new pilot program with two large LBM merchant groups in North America for its new Merchant Plan. Specifically created for the LBM dealer, Merchant sales teams can use the platform to provide pricing and specifications, respond to builder RFQs, interact with builder customers during quote formation, showcase merchant range width, and more. “Based on the feedback we are receiving,” says Yates, “we’re confident that our Buildxact Merchant and builder platform is the future of LBM pro sales relationships with small- to medium-sized contractors.”
Success relies on change
Rather than being intimidated by these advancements, technology developers say that the successful LBM dealer is the one who is willing to embrace it. “We all need to be open to the benefits of change,” says DMSi’s Carlson. “Look for opportunities to make changes that bring value to your customers. Observe, ask and listen to your front-line employees and your customers. Identify and work to resolve pain points. Provide solutions to things no one ever thought to question. As a result, you will be your customers’ best supplier and establish better business processes that can be further automated by software solutions. Think of change not as an obstacle but as the light at the end of the tunnel.”
Technology developers stress that it’s not about abandoning the past; rather, it’s an equation of keeping what has worked well and then using technology solutions to build on it. “Choosing to adopt new technology is not a binary decision: relationships vs efficiency, brands vs commoditization, or jobs vs automation,” says Yesler’s Meyers. “Dealers should run their business using software to leverage their assets—people, physical assets, relationships.
“Dealers can improve their operations with software, but must shed their painful memories of their first POS implementation or the last deployment when they consider Yesler. Modern software like Yesler works differently. Does Amazon.com require you to quit using traditional retail or other shopping apps? When you sign up for Uber, do you have to sell your personal vehicle? Yesler empowers you to transform your supply chain starting with one transaction, one product, and one relationship at a time at your pace.”
Technology, manufacturers point out, is not your enemy. Rather, it enables you to serve the customer better by helping you communicate your experience, offer better prices, handle resource and purchase order management, and improve order fulfillment. As Buildxact’s Yates explains, “This is not the old (and expensive) ‘the customer is always right’ emphasis on service. Instead, understanding technology allows you to provide a greater service level and a more rewarding experience to your customer at a low and scalable cost.”
As well, capital investment in technology solutions should be seen as an opportunity. “Many business owners view their software and technology investments as an expense rather than investments in growth and opportunity,” says ECI’s Maiuri. “There is a fundamental difference, however, between the owner who embraces new technology versus those that attempt to yield maximum returns off twenty-plus year-old software. Newer technology can improve workflows, aid with staff recruitment, deliver a greater customer experience and provide greater business insight efficiently and effectively.” Bear in mind that technology investment reaches beyond the price of the ERP system itself, and LBM dealers will best succeed when they implement other changes in partnership with their ERP investment. “When you are faced with implementing a new ERP system we strongly recommend hiring a dedicated team to manage the project from start to finish,” says Kerridge’s Anderson. “Your ERP provider can design a very effective project plan but if you simply assign people from your existing team to manage the project along with their regular duties, then that project is very likely to fail.”
Business technology is not a one-time investment, points out Paladin’s Benett. Just like purchasing equipment like forklifts, business machines, rental equipment and company vehicles, retail technology should be regularly maintained and updated. “That means updating your equipment such as POS terminals, printers, scanners and mobile devices, and dedicating yourself to continuing education,” he explains. “As rapidly as technology evolves, there are always new things to learn and new ways your system can improve your operations. Investing both money and time into maintaining your business management system will keep you on the path to success.”
If there’s one thing in which the LBM industry can take heart in, it’s the fact that it isn’t alone. Many other industries have or are facing the same challenges, and have succeeded. Today is an opportunity for new wins, and technology can guide the way, and it’s paramount for LBM dealers to embrace those changes now before outside forces claim those wins. As Yesler’s Matt Meyers explains, “Look across other industries that have transformed—travel, real estate, retail—and ask yourself, ‘Is LBM the one industry that will remain exempt from technology transformation?’ LBM dealers are the critical link in the supply chain to builders today, but investments by outsiders like Softbank or Amazon could change that. Consolidation within the industry by dealers or ERP providers can change the landscape and options for independents.”
Michael Berger is the former managing editor for HANDY Magazine and has been writing about home improvement and construction for the past 19 years.