Smarter Distribution - System Evaluation and Inventory Management For Distributors

Look Inside Before Looking Outside

Assemble a team of contributors from across your company that can work together and accomplish a goal. Appoint one of the high level executives on the team with the responsibility of handling the project. I would not recommend that you leave this process solely in the hands of the MIS department. Knowledgeable they might be but all too often they have their own set of selection criteria that may not be in the interest of the whole company. After the whole selection process is complete these same team members will be pivotal in implementing the system, so choose them wisely.

Next, establish a set amount of time and take a realistic look at your current system and operations and determine some of the goals that you hope to accomplish by installing a new software system. These goals need to be simple, few in number and realistic. Having a desirable result can go a long way to keeping everyone focused on what's important when the inevitable distractions and lulls in activity occur.

Select A List Of Vendors

From current periodicals or the Internet or a consultant assemble a list of vendors that sell system software that seems like it might fit your company. There are a surprising number of vendors selling software out there. During this step we don’t want to be too picky there will be time for that later. Be sure to include the software vendors from your competitors. This process can be an excellent opportunity to understand the weaknesses and strengths of those you compete with on a daily basis.

First Cut

With a few phone calls to prospective vendors and other knowledgeable parties it will be fairly easy to narrow the list down to a hand full of vendors. Some of the criteria we’ll use in the first cut are:

General Company Data – How long have they been in business? Generally when a company has have been in business a reasonable period of time you can be assured they’ll be around in future to support you.

Experience In The Industry – You’re looking for companies that already have installations in your particular business. You want to avoid being a guinea pig for their latest software product. Ask for specific numbers of installations similar to yours. Pay attention to those companies that have employees with backgrounds in your industry.

Future Trends – Ask what their vision is for the distribution business. Are they investing in the future? You’ll be surprised how many dead-end packages are still being hawked on the market today. If the vendor is not investing in his software product to keep it relevant you make be left up a dead end your self.

Strong Finances - In this cut you'll want to eliminate those vendors with checkered finances, etc.

There are numerous public sources of information available to aid you in rounding up the skinny. Start by reviewing the company’s web page, looking for the depth of information provided. If they are a public company you can review their records available from numerous on-line sources. Consultants can also be a valuable source of independent information.

Vendor Interviews

Next, invite these vendors in to learn a little bit about your company. Don't be surprised if some phone calls aren't returned. Go ahead and cross those folks off the list. If that can't return a sales call how in the world are they going to handle support calls?

The vendor should be interested in understanding how you do business. You should be clear in what your company’s goals are.

Demonstrations

There is a particular skill to handling vendor demonstrations and getting what you want. Vendors can be quite skilled are highlighting those areas that they handle well and avoiding those areas where their software lacks depth. Go ahead and make the assumption that the majority of the things you need are in the package. There are not a lot of packages out on the market today that just completely ignore major functional areas. Make sure that the list of objectives you determined in step one is the basis for the demo. If you let him a vendor will go on how hours about how his technology out classes the competitors. You should be interested how you can use the software to improve your business processes and ultimately aids you in making money.

Second Cut

After the demonstrations you can begin to get a feel not only for which companies can handle your business but also which companies fit well with what you want to achieve. You can narrow this list to two or three serious contenders.

Ask For A Proposal

From the hand full of vendors left ask for a proposal and be sure to ask for a copy of any contracts they expect to be signed.

Talk To Current Customers

The demonstrations are where you find out if the software fits with your company the interviews with the vendor’s references is where you find if their company fits with yours! There are critical areas to assess when interviewing customer references:

First, is everything the vendor told you true? Remember, vendors choose their references carefully to best high light their success stories.

Treat discussion this like a sales call and ask this current customer for other customer references. These second tier companies may not be a well coached by the software vendor as the top tier on the politically correct answers.

Can the vendor deliver on his promise to install the software on time and on budget?

Ask specific questions about the status of their relationship with the vendor. How long does it take to get a support call addressed? How long does it take to get a support call fixed? What is the attitude of the vendor’s personnel? What has been their experience with getting modifications done and installed?

This is where you will want to also go and visit a customer site using the software and see for yourself how it’s working. Numerous times I’ve spoken on the phone with a fellow wholesaler about their wonderful computer system then shown up in their office to find the computer sitting on their desk under a pile of paper and not touched in weeks!

Final Selection

Once you are satisfied that the vendor’s software can do the job and also that the vendor can deliver on the promises made, you are ready to negotiate.

Don't be surprised if the proposals from the vendors are fairly close in price. These guys are used to competing against each other just as you are used to competing against your competition. But do not make price your most important criteria. If vendor that fits best with yours is close in price you’re better off spending the few extra bucks than regretting it later.

If done correctly this process cannot only yield a nice software fit but also set the stage for the installation to go smoothly and establish a solid relationship with one of your most important vendors.

Installing a new computer system can be like having a baby. You go through months of discomfort reaching a peak of pain when the baby arrives only to find out that you need to continue with months of care to reach maturity. Picking and installing a new computer system is one of those tasks where there is no shame in asking for the help of a consultant. As a consultant I can add valve when I can aid the wholesaler with those are tasks that occur infrequently enough that the company has no in-house expertise.

About Bob Boyles and Smarter Distribution:

Bob Boyles started his strategic consulting business in 2001 and has focused on the change that technology is forcing in the supply chain and how independent distributors can not only respond to that change but also maximize the return they are seeing on their investment. Bob has spent a significant amount of time as an Installation Consultant for several of the big name software companies in the distribution market. Working with hundreds of distributors across the country on installing, upgrading and utilizing their software. Bob also worked as Corporate Systems Manager for one of the largest electrical wholesalers in the country as that company moved from a completely manual operation to an on-line real-time system.

Bob is a graduate of Appalachian State University (BS - 1981) and University of North Carolina at Greensboro Graduate School of usiness (MBA - 1985).

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