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The technology-free lumberyard

It’s never smart to assume. Yet, every now and then, we assume anyway. Case in point: the last time a Real Issue survey was about investing in new technology, we assumed that all LBM Journal readers’ companies were using technology in their business. Indeed, the multiple-choice question, “How recently has your company updated or upgraded its software and technology tools?” didn’t have an answer option for technology-free companies.

Which brings us to this month’s Real Issues question, which came from the new owner of a lumberyard that’s been operating technology-free for more than 30 years. He’s looking for advice on whether or not to pull the trigger and computerize.

We did as we do each month and surveyed our readers via email with a few quick questions. A big thank you to the 247 readers who responded and shared their insights.

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HERE’S THE QUESTION:

“We recently purchased a lumberyard that has been a successful business for over 30 years. The yard runs on zero technology—no computer system, no website, no tech of any kind. I think computerizing could help greatly by streamlining operations and giving us information to manage smarter. However, since the company is doing fine without it, and since computerizing would likely rock the boat with our longtime team members, I don’t know if I should. It ain’t broke; should I break it? Would love to hear what other LBM pros recommend.”

Responses from lumberyards, full-line building material dealers, and specialty distributors:

“Evolve or die. It will be a big disruption, but I have found that people are adaptable. You may have a brief behavioral spike and then everyone will accept the new normal.”

“I can appreciate the dilemma. Before making a change I would recommend you poll your employees for what areas they think a computer system would benefit them? If you can get their buy-in and a system that helps them address issues they’re facing, it should be a lot easier to implement the change. It’s more important to have the people than to upgrade the system.”

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“My approach would be to start with something small. Take a relatively non- invasive procedure or tech solution and allow time for employees and customers to see the benefits, while still hearing their concerns and questions. This may allow some buy-in to be built up, rather than just coming in to overhaul their entire business practice overnight. Purposeful baby steps!”

“I would slowly introduce the technology to those that are open to it. One of our old timers who was so against it in the beginning became a trainer to many new associates over the years.”

“Integrate slowly, starting with inventory management.”

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“Slowly bringing this yard up to speed with the modern world may help improve inventory control and help with overall unit turns.”

“I want to know this also.”

“I would look hard at new technology. If you choose the right POS system for your company, it can be invaluable. The work of keeping track of all sales and inventory is done for you. You will be amazed at what you had no idea about in your daily activities. Also, you will be able to take on more customers and grow your business. I feel you must change with the times or you will get left in the dust.”

“I can agree with going either way. I came from a lumberyard where the owner rejected technology—until he saw the advantages of having an accounting program. No more customers slipping thru the cracks. My current yard fully embraces technology, from advertising to accounting and inventory. While this is something I had wanted from my previous employer, I see the drawbacks in systems upkeep and education. It is nice to see stock in other locations but that is only as good as the right material going to the right spot—which doesn’t always happen. While I generally agree with ‘if it’s not broke, don’t fix it,’ maybe easing into technology would be a way to go rather than jumping in the deep end. Start with a website or social media pages. At least review accounting and order entry software to see if it can help. While you may not want to alienate your longtime employees, you don’t want to be too far behind when you need to replace them with people who rely heavily on technology.”

“It’s inevitable but go easy. We are doing new software right now, and it’s very difficult for us older learners to grasp.”

“Technology is the future, whether we like it or not.”

“It is tough with the existing team members, but our computer that we purchased in 2016 has been much better for both sales and back office. It took some training and a lot of teaching, but overall, it helped us tremendously.”

“You need to know the needs and wants of your customers. Younger and tech savvy customers may want more than written tickets provided. Your staff may be better prepared for an upgrade than you realize. However, there will always be the grumbles.”

“I would definitely modernize with technology, current team members will buy into the improvements and new future employees will likely be apt to join the company. Look forward to tomorrow, not today or yesterday.”

“I appreciate the long-timers; however, they will most likely be retiring sooner than later. Some things technology can never replace, and unfortunately the newer generations do not know how to function without technology. If you stay where you are, you will never move forward. What’s working today will not work tomorrow. In order to keep up with the ever-changing world, the answer is yes, introduce some technology. It helps your current business and it’s an investment to your business future.”

“I understand keeping it simple. However, if the AR/AP isn’t computerized, definitely start there. Continue to add small bits where the return is greatest.”

“It depends on what you want out of your business. I purchased a lumberyard that ran that way without any technology. We now do 5x the volume the former owners did, and we spend a fraction of the amount of time ordering product. We are a lot more efficient with technology in place, but I have the experience and knowledge to have implemented it. If I need to pull up a past invoice, it only takes a second. We also save on statements that go out to the customers along with the automatic emails.”

“Start small. Add email and chat options with [Microsoft] Teams. Once this is adopted, think about an ERP system, and bring in one module at a time. If you are interested in expanding staff, it will be difficult to attract younger talent if technology is not in use.”

“How are you meeting the demands of the current business environment, not to mention the future? How do you attract a new generation to your business? How would a forward-thinking customer look at you as a business partner? You need to get moving.”

“Do it. It will help manage inventory, track results, and will give a better insight on how profitable the business really is. Think short-term pain for long-term results.”

“If you can’t give the customer what they want, then you can’t run a self-sustainable business. Sounds like your team members are giving the customers what they want, and it also sounds like there is room

for improvement. There are many tech tools out there that can be developed to aid your team members. Don’t add tech for the sake of ‘streamlining,’ but with the goal of helping your team serve customers better. Definitely go slow.

If it doesn’t help your team help your customers, don’t do it!”

“A stand-alone location could continue to operate without technology; however, if the owner ever decides to expand and either open a new location or purchase an existing lumberyard, technology will become a must-have. Do it now to promote future growth potential. Everyone today uses technology. There is no excuse to resist training and learning a software system that will make your job easier.”

“When we switched to the Computer Age many, many years ago, our rule was that if we had to do something twice, then the computer should be used. By now, everything we do is by computer, both for the knowledge and for ease of operation. We would need at least 20% more people without the computer.”

“This is the exact situation I am dealing with.”

“Forward looking, I’d assume new employees coming on board in the future would be tech savvy and may not want to go to work for an ‘ancient’ company.”

“It is hard to imagine positive growth in the business without at least easing into more technology. The next generation of customers will be expecting expanded access to information regarding their purchase history, faster quoting, and faster transactions at point of sale. I argue that technology will provide an improved service level to the customer at the same time making it easier for the staff to provide it. This will be a win/win for customers and staff, with the added bonus of more information for the management team.”

“When I closed my business and joined an organization with computers, the transition was not difficult. I already knew the products, and the computer was an added tool when needed.”

“Do it and start saving $$. You can greatly reduce administrative overhead by properly utilizing technology. And tech is nothing new. ERPs have been around for 30+ years. I’d be more concerned that the previous owner’s reluctance to utilize information might be a sign they’ve been hiding some turds on the balance sheet. You might have bought a lemon that needs an overhaul and better controls. Use what allows you to properly run that operation. It’s yours now.”

“If it’s not broken, don’t change. I think computerization is greatly overrated. We made one small change in the way we did things. Last count, it cost us between $30,000 to $40,000.”

“Sooner than later your going, to need technology. Your older staff will need to be replaced with Gen X and Z.”

“Technology can make you far more efficient, but the learning curve is steep. Once you’ve transitioned and all have embraced your new way of doing things, you’ll be better positioned to attract new hires and continue to grow your company. Just make sure you do your homework well and have asked many questions before jumping into a system that may or may not be what you need. The biggest obstacle is not always knowing what questions to ask. Go for it…and good luck.”

“I don’t see how you do it. I used to handwrite invoices. We could have never grown without the help of technology.”

“Nobody likes to leave their comfort zone, but technology will make their lives easier in the long run and streamline many processes.”

“Suggest maintaining status quo operations, then gradually implement an industry-specific software package to increase efficiency and boost profitability.”

“Integrating a computer system will no doubt help with inventory management alone, searching sales and purchasing history, speed of information. Small steps, but no doubt it will be a necessity moving forward.”

“First of all, men (who are most of a lumberyards employees) are terrible with math and reversals of numbers. Manual invoices are going to have a lot of errors. When we operated manually, we had a full-time person checking invoices, and it was amazing how many errors were found. Being manual also allows employees to use whatever pricing they want, taking care of friends, etc. We use technology as much as we can. We have an app where customers can see their account, pay their balance due, and place orders from their cell phone. This is what contractors and consumers want.”

“It is just luck that the company is doing well (if it really is), so go forward with reasonable technology. Use technology that helps and assists the team, so it is not viewed as a bad thing but a good thing.”

“With technology ruling the world, it is almost impossible to imagine operating without it. We are a lumberyard that has been in business for 100 years and have been slow to embrace new tech. As we have upgraded our systems and looking to the demands of society with everyone shopping online, I think it is an absolute necessity.”

“Technology is not going to slow down. Although you have longtime team members, you must think of the future of the company and all future employees. Perhaps start slow, with a simple inventory location and cycle count program. I think the key is to get everyone involved from the start and discuss the pros and cons.”

“Without knowing the size and scope of the business, it is hard to have an informed opinion. However, I would say in general you are operating in the blind. Also, the business is not scalable without technology. I can’t imagine running our business intelligently without technology.”

“I have been with this company for almost 23 years, and during that time we have gone from pencils and paper to handheld computers that verify the product being picked, the quantities being picked, and where the items are being shipped to. The system also creates random cycle counts, which provides a virtual inventory without hand-counting inventories. The hand- held units are connected with the purchasing employees that can see items that are counted and shows the quantity on hand. This allows the buyers to have an idea of the quantities to order on their next stock order. For inventory management alone, I strongly suggest computerizing.”

“You may believe ‘It ain’t broke,’ but that don’t make it so. Today, you’re playing ball in a Double A league. If you want to move to AAA or the Big Leagues, you must upgrade to a computerized information system. And that’s just the first change you must make. Then you can start on the next nine things.”

“You grow with technology and digital marketing, inventory controls, etc., or you die.”

“‘If it ain’t broke, don’t fix it’ isn’t always as simple as it sounds. There are so many tools out there now to improve efficiency. Implementation requires care and strong communication though.”

“I would think a computer system with a live inventory would be worth the investment. We still load and deliver off hand-written paper and then bill it out through the computer system.”

“You should go ahead and move forward by computerizing. At this point it should be expected by your team and not really cause any issues.”

“You must install a system for accounting, inventory, along with any other tool to track equipment in order to give you a real picture of the business. I am sure your employees all drive vehicles with computers, and their cell phones have apps so that shouldn’t be a problem.”

“We hand wrote invoices up until six years ago. When we went live on our system, there were some growing pains from our employees and customers. Overall, our business and our customers benefited greatly from the conversion. Pick a good software that is industry specific and implement it in the winter.”

“You absolutely need to make the switch. People hate change, but technology is where the industry is headed and you can either hop on board or be left behind. I understand that it is still working as of now and it will be a challenge to switch, but I think the benefits outweigh the risks.”

“I don’t know how you operate in today’s markets without computerized technology. I am a 37-year veteran of the industry, have worked for a number of the top companies in our industry and couldn’t function as a lumber buyer without the technology that I currently enjoy. I have gone through a number of computer system start-ups and changeovers during my career, and they don’t always go smoothly, but they always improve operations in the end.”

“I’ve been on both sides of it. I can’t imagine not having it now. I can do all aspects of accounting on it with no other employees. That alone is a huge money saver. Add in all the other aspects of a POS system, and you won’t look back.”

“I think the size of the store and age of the current employees would be the determining factor. if you have a lower volume store with mature employees, I would probably not computerize, but if you have a larger volume store with a younger employee group, they are probably hungry for the technology.”

“I have heard that philosophy from the introduction of OSB, pneumatic nailers, composite decking, etc. The time to explore change is not when you have to, or you will be lapped by your competitors. If there is nobody in line to take over the business, I could not imagine myself purchasing it with the absence of pertinent data and verifiable information!”

“Bringing computers in 12 years ago was the best thing we could have done. The amount of information and reports allow us to make better decisions. The only downside is that you have to have a staff who can use it and know how it works. If you do not have a computer savvy staff, then do not add technology.”

“I feel you answered your own question in your statement, ‘I think computerizing could help greatly by streamlining operations and giving us information to manage smarter.’ My suggestion would be to practice smart change management throughout the process.”

“From my perspective (49 years in the industry) managing with technology is a given. Information available from technology on inventory, turns, margins, shrink, average/replacement costs when bidding, and customer performance, just to name a few, are invaluable when owning/managing a company in our industry today. I would highly recommend implementing computer technology as soon as possible. Getting your existing team to buy in may be a challenge, but I don’t believe it would take long for them to see and appreciate the advantages that technology brings to their job once you have a system in place.

“In your situation, I would wait on the website conversation until both you and your team are comfortable with and really capable of working with whatever POS system you would decide to implement. At that point I would take a serious look at a web presence. It is hard for me to imagine any company, large or small, being successful in our industry long- term without taking full advantage of POS and web technology available today.”

“We fought computerizing for many, many years. Things are so much quicker with computers doing most of the work for you like calculating and conversions. I’m still old school however, and have boxes and boxes of paper backups that I will probably never look in.”

“I would move to computerizing to allow for easy reports and required reporting of taxes.”

“I think you will find that bringing technology in will help in the long run. But be specific and upfront with employees on the who, what, when, where, why to ease concerns for employees. It will be a learning curve for sure though.”

“Start small. Computerize one area first (shipping/receiving, inventory, accounting, etc.). Make small changes and tweaks to the lumberyard.”

“If the right system is brought in, and the data input is clean, it will aid every member of the team. Delaying this long to computerize is actually beneficial, because tech is so much cheaper today than say, 25 years ago. Longtime team members are going to hand over the reins someday anyway, and the younger generation will easily run better with accessible data. This advice from a 72-year-old veteran!”

“It may be running, but you are wasting time and profits without technology.”

“Some technology for inventory purposes would be very helpful, however sometimes adding too much can make it more complicated and create more issues. If this company has been successful for so many years, they should keep their core values and ways of operating.”

“I would add the computer system for point-of-sale and inventory. It’s a no-brainer in my opinion.”

“Personally, I feel you are not doing yourself any favors in not taking any step towards modern technology. There’s so much to gain in learning software and so much time to save doing simple tasks. Also, we branched out and found a new market in e-commerce which has been working out well.”

“Not a fan of ‘If it ain’t broke, don’t fix it,’ especially in an industry like ours, where preventive maintenance keeps our forklifts, trucks, etc. operational. While you might be doing ‘fine’ by some measures, how can you be sure you are truly maximizing your profits/sales etc.? I am biased in this, as I was brought into a 100+ year lumber business with zero lumber experience for the sole purpose of catching up our systems and efficiency. In our case, that has paid off exponentially.”

“It very likely depends on the customers and the market. In a highly competitive market, in which many of the target customers are high-end and/or high volume and/or commercial customers, implementing technology is likely to be necessary to increase market share. In a rural, non-competitive market, there may be plenty of time left to remain without technology.”

“Baby steps! Implement a small tech improvement and see where it leads. The experienced staff may have some great ideas on where to start. Involve your staff and brainstorm. Might be easier than you imagine.”

“You don’t know what you’re missing, and your growth will be limited. Technology will improve current processes and allow for future growth. Rocking the boat is what makes companies (and people) grow. Change is almost never fun, but are you going to let your employees hinder the possibilities of your company?”

“Computer systems allow for scaling and growth with the same or fewer employees. If you are happy with the current size of your company and staff levels, don’t do it. If you want to grow, a computer system may be necessary to achieve your goals.”

Responses from manufacturers, service providers, and wholesale distributors:

“Change for the sake of change is never good. Calculated change where we have analyzed the benefits outweigh the challenges is critical. Unfortunately, the phrase you quoted is one our industry has lived (and died) by. Remember, if you’re not growing, you’re dying. You need the team to understand the benefits a system brings, how it will improve their workday, the customer experience, and the benefit for the company long-term. You are running one of the most complex retail operations out there, and the way you’re operating is a little bit like driving your vehicle down the road with no dash lights and no functioning gauges. Get key members of the team involved in the process as you research options and find one that fits the needs of your organization. You will not regret having the right tools to build a more successful business.”

“Don’t view it as ‘breaking it.’ You will be streamlining processes and making your life easier in the long run. It has been successful for 30 years, and if you make these changes now, you can be successful another 30.”

“I would slowly integrate new technology. In the long run the business will be better off and by taking it slow you lower the disruptions that always come with change.”

“I would recommend slow implementation of technology. Before you do, though, develop some buy in. Ask the employees what bugs them. Chances are they are frustrated by something that technology can improve. Then, start with something simple, share how it’s made the lives of the employees better, and build on that.”

“Yes, I would update. It’s like building the well before you are thirsty. The lack of technology will hurt you and by the time you need it, it will be too late. Invest now.”

“Even if it is working fine now, the longtime team members will not be there forever and it will be harder to bring on new talent into an antiquated system. I can’t imagine that vendor and customer communications or tracking is as accurate or efficient as it could be.”

“The world moves forward, whether or not you care to move with it. I was a railroad worker during college. We were always taught to be in touch with our surroundings. If it moves, move with it. I have survived with this motto in my head. COMPUTERIZE!”

“Don’t do it! I bought my company in 1978, free of all technology. Then we went to using a computer for accounts receivable only. As the company grew, we started adding all sorts of tasks to be added to the computer, finally adding computerized inventory. The computer was running the company, not the reverse. It became so complicated, I could no longer understand it. We then hit awful economic times in the early ’90s, and I almost lost the business. A number of long-term employees quit, because they just couldn’t deal with the computer.”

“I would bring someone in to show what would be valuable to your business and test the waters. Presently if you don’t make at least a step in the direction of at least getting your inventory and accounts receivable on a system you may be headed for trouble. Remember that your longtime team members aren’t getting any younger, and most of your new hires will be tech savvy.”

“As a company that is transitioning between 1st and 2nd generation ownership, we are facing similar problems. We have chosen to target specific things that are easy to change. The computer system was first because that had the most immediate effect on day-to-day operations.”

“While the company has functioned successfully for the past 30 years without technology, all signs point to that changing very soon. In order to be competitive in any industry, you must begin to embrace at least some of the technology that will help streamline processes. Computerizing your records is a good start.”

“There are so many benefits to computerization. It would be worth the headache to make the change. If it cost me some current employees, I would hate that but that would be their choice not mine. To me the benefits outweigh the negatives.”

“Depends on the objectives of the business and its owner. Sound business decisions require multiple inputs and not just gut feeling. Help team members understand ‘why’ it needs to be done and include them in the ‘what’ and ‘how’ it is done.”

“There are several things to consider. Is the company capable of expanding customer base? If the company is capable, then considering the greater potential volume with the technology equipment seems to make sense. Also, considering work force, many businesses struggle with getting enough help, whereas the technology equipment would be a benefit in that area as well.”

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