HRAI e-Business Centre

Simple way to buy things quickly and easily
HRAI wants its members to take advantage of existing technology so they can provide higher levels of service and be more profitable. This story is about how AtlasCare has become a more profitable and competitive company because it uses technology that is actually provided by its supplier, Boutette and Barnett Trade Distribution (B&B).

The technology involved
John Collins, Warehouse Supervisor-Purchaser, explains that you don't need a sophisticated or expensive system to use what B&B offers. The AtlasCare system manages inventory, scheduling, job costing and accounting, representing a sizable investment. However, for some of the things that John and his staff need to do, the ability to log on to B&B over the Internet provides big benefits at no cost. The B&B computer system provides simple-to-use features that allow John and two others on his staff to save time and money. According to John, training his staff to use the system did take some time but "was nothing that any employee with normal everyday skills couldn't handle." In addition, John says they really LIKE to use it. Once signed on to B&B they can get product information and request price quotes, and they can use the system to check B&B stock and place orders.

The real benefits
Placing orders electronically and getting product information over the Internet may not be anything new and some would even question the value of the time-savings. However, when you couple the online ordering capability with B&B's innovative inventory and distribution management, you get a huge magnifying effect.

AtlasCare doesn't want service people to waste any time. This means service vehicles must be fully stocked and special, non-stocked items must be ordered and received quickly and efficiently.

If you have ever tried to order items over the telephone at busy times of the day, like lunchtime, you know the frustration. It starts with the line ringing and ringing and when the phone is finally answered, you hear "Hello, please hold for a minute." However, this does not happen when you can use a computer terminal on your desk. John and his staff can go right into a special part of the B&B system right from their computer and check stock, arrange shipment and get a delivery time. If the order is in by 4 p.m. it will be in the lockbox at AtlasCare by 8 a.m. the next morning. This can be done while the technician is at the job site. Knowing that the parts will be in the next day frequently enables the dispatcher to schedule the return visit while the technician is still on site. This way the technician can tell the system owner just when someone will be back to finish the job. As John explains, ordering electronically over the Internet eliminates:

• Phone calls to order products
• Transposition errors of part numbers
• Follow-up calls to clarify orders and shipping dates

It is not just the time to complete an order; it's the time to complete a job. Reducing phone calls has a huge impact on truck replenishment, service call scheduling and not wasting time on hold or just listening to a phone ring off the hook.

So what is it like to use the system?
The system enables AtlasCare to have a good handle on its own inventory, resulting in the ability to have the necessary parts on the truck at all times. John can keep his stock levels low while still having high availability because he is on a B&B route that provides great scheduled delivery and no shipping charges. In an emergency, the service person that needs parts for a job calls John. John can check his own stock but can also check stock at all the B&B locations and place the order. John believes that the speed and simplicity of ordering and parts delivery has enabled AtlasCare over the past few years to leverage current staff skills, improve their quality of service and sustain their impressive growth.

Meeting company goals
AtlasCare, founded in 1932, is a heating, air-conditioning, and air quality company serving residential customers in the Toronto and Hamilton areas. They have about 6,000 contract customers and have a healthy residence replacement business.

AtlasCare is organized into three branches of six-10 people and a partner relationship in Burlington so that the company can provide quick and personal service. According to John, speedy response and quick time to complete a job is extremely important for two reasons – customer satisfaction and company profits.

Customer satisfaction
If a homeowner has a problem, he or she wants it fixed NOW! Moreover, if a return is required, they want to know exactly when that will happen.

In addition, if they need a replacement heating or cooling system, they want to begin enjoying the comfort that their investment provides as soon as possible.

The real bottom line:
The faster that AtlasCare can meet customer needs, the more customers they can serve with the same staff. More customers served translates into increased profitability.

The less time that AtlasCare needs to spend in non-value-added activities like stocking, (as John puts it, "over-stocking") service vehicles, ordering, and picking up parts, the more time they can spend on the job. More jobs completed in a week or month translates into increased profitability.

Supporting contractors and contractor's customers
Gerry Cellucci, Yorkland Controls' V.P. Systems, explains that his company mainly supplies controls to installation projects. They have a modest computer system but it does allow him to do some business transactions over the Internet. Yorkland is using e-commerce to place orders with Seimens, Johnson Controls and Belimo. He wishes more of his suppliers would take orders the same way. Gerry is technically perceptive, but relies on outsourcing for computer staff.

Yorkland may not have a highly sophisticated computer system but they have invested in technology to provide a higher level of service to their customers. Much of what they do simply uses software that many companies already own like Microsoft Back Office™. Customers must like what they're doing because Yorkland's growth rate has been at 12% to 15% for the past three years.

As Gerry puts it, "We invest in technology that will increase revenue. We really like technology that makes it easier to buy more from us and, at the same time, simplify and reduce the cost of ordering. Our major focus is to increase sales volume." This is a situation where customers can use technology that takes little on no investment on their part. Yorkland is using the Internet technology in three vital areas of their business:

• Uses the Internet to research products and obtain information from suppliers and to find new sources of supply. When a customer needs something special for a job, Yorkland can find it much more quickly, without the series of back and forth phone calls.
• Provides a wealth of information to their customers. A visit to Yorkland’s website tells the story. In addition to links to Yorkland's suppliers and other general knowledge, visitors can go to the "Download Center" for all kinds of useful information. If a visitor becomes a "member", they can download other valuable software, without any cost to them. For example:
  • System 350 Applications - Various applications
  • Honeywell Economizer Season – Energy-savings calculator for rooftop economizers
  • Energy Savings Estimating and Selection Software
• Most importantly, supports contractor customers using the Internet in three important areas:
  • Receiving request for quotes and responding by email
  • Project scheduling
  • Hosting system documentations for installations

All of these activities are just in the beginning stages. But Gerry explains that they are using the Internet to support contractor activities in order to differentiate Yorkland from its competitors. Yorkland believes that the investment in technology will deepen their customer relationships.

System quotes - Responding to requests for quotations and pricing out systems using the Internet saves a lot of time and eliminates errors. Using email provides 24-hours a day, seven-days-a-week support capability. Gerry says you can see their website activity increase during the lunch hour and in the evening. This means that contractors are using what Yorkland provides and a lot of it is after regular hours.

Project scheduling - Some projects are very complex so Yorkland has begun to use Outlook- Project™ (connected over the Internet) with some of its contractors. This lets a project team balance resources and equipment delivery in the planning and installation phases of major projects.

System documentation available online - Yorkland provides a unique service to their contractors by hosting a project website for each different installation. This project site is hosted on the Yorkland server, so the contractor does not need any computer expertise. The project site has the personality (logo, contact information, etc.) of the contractor. Information includes all the "as built" drawings, specifications, instruction manuals and links to manufacturer sites. This really helps the contractor because it allows him to better support the system owner and dramatically reduces contractor support costs.

Wholesalers save customers time and provide better service
Tom Boutette, of Boutette and Barnett Trade Distribution, has an interesting perspective. He believes that the investment that he has made in technology to allow B&B to meet higher levels of service should also be used by his customers to enable them to provide higher levels of service to their customers. “People tend to only think about how fast B&B can respond to them. I think customers should be using our warehouse and stocking locations along with our computer system (that they can log on to) to reduce their turnaround time and make more attractive commitments to their customers.”

Tom explains that B&B has invested in a barcode-based, real-time-linked warehouse system. The system all but eliminates shipping errors, allows orderers to change or add to an order as it is being picked and to check the accuracy of stock at any point in time. High availability of stock and rapid fulfillment means that if you call in an order, it will be ready for pickup by the time you get there. However, some companies don't want their valuable technicians taking time to stop by a store so they take advantage of a very aggressive delivery capability. If you need delivery, job sites in some areas enjoy truck delivery twice a day. In other areas, if orders are in by 4 p.m., the items will ship the same day and be at a "lock box" the next morning.

B&B provides expert and experienced customer service representatives who can give a customer the latest information and even make suggestions about what items to order. However, many B&B customers are experts themselves and all they need to do is check stock availability, (which stocking location is closest to a job) and place the order. They don't need the personal service and can place their orders over the Internet using the time it would take to place the call on other things. Tom wants people to know that the computer system that allows his in-house customer service people and sales counter people to find information, check stock and prices as well as place orders, is available directly to his customers. All a customer needs is access to the Internet and an account with B&B. (There is some training also). The big advantage is that customers can place orders when they first get to the office at 7 to 8 a.m. before they get busy with normal business and its interruptions.

Companies that do use the system save ordering time and this makes their staff more efficient. That is only the beginning. AtlasCare, a B&B customer, increased the number of repairs and installs made per technician by using the computer system as part of its normal procurement routine. Since it takes less time to get the parts to the man on the job, each technician can accomplish more in a given day, week and month. In addition, AtlasCare markets the quick response time to its customers. AtlasCare has high availability of parts but does not have to carry high levels of inventory itself, which is another source of cost savings.

Johnson Controls Inc. implemented their Internet-supported e-commerce capabilities in 2001. It is interesting to note that as they were working to improve communications with their customers, HRAI was gathering information to better understand where e-commerce could help its members. Johnson Controls Inc. must have done their homework because the areas that they have addressed are exactly the areas that HRAI members want to see improved.

We asked Johnson Controls Inc. to give us their perspective and briefly tell us what they are doing and how anyone with an Internet connection can get some level of benefit.

Johnson Controls Inc., like many other companies, views technology as a tool to assist in achieving our goals. “We realized a number of years ago that supply chain technology, like electronic commerce and barcodes, would enable Johnson Controls to increase our profits while at the same time making our entire supply chain more efficient. This benefits our stockholders and the stockholders and owners of our customers.”

According to Jim Wallick, Distribution Sales Manager, Johnson Controls, Inc., “We recognized that everyone prospers when suppliers and customers work together to take costs out of the supply chain and it is only through a collaborative effort that we can combine our resources to be successful. We saw the opportunity that technology could offer to improve our business processes; however, we recognized that to be successful we needed to ensure data integrity and that system enhancements were fully integrated throughout our business systems.”

The only practical way to deploy the technology (that would ultimately link us to our customers through the supply chain) was to perfect our business processes by electronically transferring data between our own locations, real-time, throughout the day. We perfected this internally and we have been offering these options to our customers. We realize our customers have different wants, needs and systems, and therefore our offering is as diverse as our customer base.

Below is a sampling of the current electronic information shared between Johnson Controls Inc. and our customers. We have the ability to provide this information 24/7.

• We offer product information via the internet or CD, which our customers can in turn pass on to their customers.
• Active customers can check their order status, track shipments or complete price and availability via the web for any product they are authorized to purchase.
• Orders are accepted in various electronic formats that automatically feed into our order entry system. This allows customer orders to be placed and allotted into inventory at the same time. Our customers can place an order at any time, day or night. The order will be loaded into our order entry system, the inventory will be allocated and the product will be shipped, in many cases, the same day. No more waiting for faxes or data entry of orders.
• We have the ability to complete an accuracy check of the electronic data forwarded as well. If our customer wants to be notified if a price they provide has more than a 2% price difference, we can add this check and advise the customer if this discrepancy exists. This helps our customers control errors at the beginning of the process rather than during the accounts payable process.
• We have the ability to supply PO Acknowledgments, Advance Shipment Notices and Order Status Reports electronically. This gives our customers the opportunity to integrate the order information into their system as well. We have the ability to send an electronic Purchase Order Acknowledgment to our customer which will then update their system with the expected arrival date of their order. This is powerful information, especially as a sales tool.
• We offer standardized barcoding on our products to help reduce internal costs for our customers. This automated technology should help reduce data errors as well as help reduce inventory levels, shipping and receiving.
• We can provide electronic invoices, allowing our customers time savings during accounts payable and invoice processing.
  We accept Electronic Funds Transfer (EFT). This allows our customers additional time to hold onto their money and earn interest. Mail delivery time is no longer part of the equation.
• We can assist in inventory management by replenishing our customers’ inventory based on what they want on their shelves and when they want to receive the product. This process is completed through electronic file transfers with our customer in complete control of what they stock on their shelves.

All of these options can be accomplished through our website, EDI or Internet ASCII file transfers, allowing our customers diverse methods to send and receive data.

Johnson Controls, Inc. has made a large investment to improve our processes and to improve the processes of our customers. We believe that working together at the level of sophistication that our customers are comfortable with is the best way to move our industry forward. We encourage HRAI members to visit our website and look at the many features that we have included to make dealing with us effective, efficient and profitable for everyone.

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