Read How Alexander Lumber Company Reduced Their Inventory by $8 Million with BisTrack, and How They've Been Able to Run Their Business Better with Epicor.
Operating 19 retail lumber yards and 2 truss plants, Alexander Lumber—based in Aurora, Illinois—services customers in Illinois, Wisconsin, and Iowa. The company used to run several disparate enterprise resource planning (ERP) systems after acquiring a number of smaller companies, but in 2010, Alexander Lumber’s owners decided to standardize operations on a single solution. In the end, they chose Epicor BisTrack with Journey Planner.
Alexander Lumber leverages the tightly integrated BisTrack business analytics tools to evaluate and improve operations and performance. "You can’t judge what you don’t measure," said Russ Kathrein, CEO of Alexander Lumber. "If you’re not measuring, you are making decisions based on anecdotal evidence and not concrete numbers."
For example, sales people will often push for special treatment for what they believe to be "good customers." However, accurate customer grading requires objective analysis of a customer’s gross profits generated, terms, payment record, orders, returns, etc. These objective metrics can frequently tell a different story about many accounts that were previously identified as "good customers."
We use BisTrack software to measure many of our company's key business initiatives, and track our progress in achieving those initiatives.
"We use BisTrack software to measure many of our company’s key business initiatives, and track our progress in achieving those initiatives" said Rick Vancil, executive vice president of Alexander Lumber. "For example, we can analyze our fleet maintenance costs to identify vehicles that need to be replaced. We can also compare the cost of different repairs from different mechanics. We are continuing to look for ways to drive costs down in our business by utilizing the wealth of data tracked in BisTrack."
"Recently, we conducted a baseline study and determined it took us about 50 minutes to turn around a 24-foot flatbed with a detachable fork truck—with the driver and loader going 0.47 miles per turn," added Vancil. "Using BisTrack Journey Planner software and the integration with GPS Insight, we reorganized several external activities and moved many to before the truck arrives—completing and retrieving the next shipment’s packing slips, consolidating stops, reconfiguring the truck bed and retrieving hardware, gathering paperwork from the dispatch office, and also expanding the loading area."
Alexander Lumber has been able to dramatically reduce inventory with the help of BisTrack software. "In the past, our employees would walk around the lumberyard and make purchasing decisions based on what they saw," said Kathrein. "Now, BisTrack gives our buyers a company-wide view of inventory. If one location is low on a particular item, our buyers have the option of transferring merchandise from other locations, rather than simply purchasing it. We were also able to identify product categories that had low sales rates in certain locations and removed them from future purchases. Using this approach, we were able to reduce our inventory by one quarter—or roughly $8 million."
Alexander also improved gross margins by improving control on special orders and by setting up margin-specific incentive structures for its outside sales people, location managers, and district managers. Margins were up two points within the first two years using BisTrack and are continuing to rise. "These business leaders earn a percentage of the profitability of the business units they run," said Vancil. "Location managers are financially incentivized to carefully manage their inventory and make it productive. All of this information is collected and reported by BisTrack."
In the past, Alexander’s outside salespeople would have to either call or return to their office to get all of the information they needed to write quotes and sales orders. Now, the company’s salespeople can run BisTrack Cloud software on their Microsoft Surface tablets. The tablets give users full access to the rich functionality of BisTrack software. "Equipped with BisTrack Cloud on a Surface tablet, our salespeople are able to immediately respond to customer questions on product availability, pricing, and delivery status. It has proven to be a valuable sales tool," said Vancil.
Despite their success, Alexander executives feel there is far more they can do. "We have called BisTrack software our ‘Lamborghini’ that we drive 25 miles per hour," said Kathrein. "BisTrack offers an almost unlimited amount of information. It has helped us lower inventory costs, improve business efficiencies, and increase margins, but I feel we have barely scratched the surface on what we can accomplish with this wonderful business solution. Once we get everyone in the company using BisTrack to its full potential, our company will be running like a finely tuned Italian sports car."