Success Stories

Activant Helps Fastener Distributor Reduce Dead Stock, Increase Inventory Turns, and Streamline Processes

When strangers ask Steve McKinney what he does for a living, he often tells them that he "sells a few nails and staples." What he doesn't tell them is that his business, Southern Fastening Systems, is one of the country's largest and fastest growing fastener distributors.

In addition to four main distribution centers, the company has several hundred employees and more than 100 sales locations - each with its own warehouse. Serving much of the South's construction industry, Southern Fastening Systems sells thousands of fastening products, ranging from basic items like nails and staples to ancillary products like ladders and tape measures.

McKinney contends that managing hundreds of people, as well as dozens upon dozens of locations and more than 70,000 SKUs would be impossible without technology. "You can't operate without timely, accurate information," he says.

Carolyn Hunt, operations manager of the Georgia region, agrees: "Our system captures usage, filters large sales, and determines lead times. Activant handles all of the things no human being could keep on top of."

Better Control

As a result of tighter inventory control and better stock management through Activant Acclaim, Southern Fastening Systems has increased inventory turns by at least 20 percent. Plus, Hunt estimates that 30 percent less dead stock now collects dust on warehouse shelves.

"In the past, we'd sell something that was sitting on our shelves for three years and buy it right back in again just because we sold it," Hunt says. "A purchasing agent can't remember the histories of thousands of stock items. That's the beauty of an inventory-centric solution. If you're using it right, it doesn't let you bring dead stock back onto your shelves."

To help keep dead stock off shelves, when a staff member adds a new SKU to the Activant database, they must also enter a note regarding why they bought it - and what customer they bought it for. "This way, if it goes dead, we know why we brought it in," McKinney says. It is a rule that has already saved Southern Fastening Systems time and money. A few years ago, staff special-ordered four pallets of 12-inch drawer slides from China. When the customer never picked up the order, sales representatives referred to the notes, and took the stock - worth thousands - to the customer. "We deal with so much inventory that we never would have remembered who those slides were for without those notes," McKinney says.

Improving Profitability

Fastener distributors live and die by maintaining good profit margins on thousands upon thousands of pieces. And, like any other distributor, Southern Fastening Systems must work hard to maintain profit margins and profitable customers.

The solution's Exception Reports help company management ensure that salespeople always sell product above predetermined profit margins. "If a sales guy in Corpus Christi sells a box of nails under margin, the manager in Dallas will get the report, and call him the next morning to ask why," McKinney says. "The reports are a real useful tool to ensure accountability."

Acclaim's financial data has helped Southern Fastening Systems ensure that it doesn't lose money on any of its accounts. During the first year of his partnership with Activant, McKinney realized that his company was losing $25,000 a year on what it thought was its best - and largest - customer. "We would have crawled on our belly for four miles for this guy," he says. "For the first time, we had a real picture of where our money was coming from."

Purchasing

It wasn't long ago that distributors made purchasing decisions based on the amount of dust on their shelves, says Hunt. "That was the old days, before we had good inventory control systems," remembers Hunt, an industry veteran. "If there wasn't much dust, you bought more. If there was a lot of dust, you figured you weren't selling an item, and held off."

Today, thanks to Activant, purchasing - as well as almost every other aspect of distribution - is easier for companies like Southern Fastening Systems. "We wouldn't be able to do what we do today - and make a profit - without the information we get out of our Activant solution," Hunt says.

Overall, Hunt contends that Activant offers "excellent" enterprise software solutions and says the support Southern Fastening Systems receives is "great." "There are a lot of people who go way above and beyond the call of duty trying to help you solve an issue," she says.

"Our partnership with Activant is wonderful," Hunt concludes. "Everyone at the company is incredibly helpful. I know that if I want to ask the president a question, I can e-mail him and get a response. I like knowing that just about everyone is accessible."

McKinney says that Southern Fastening Systems' exponential growth - from one location in 1990 to more than 100 now - may not have been possible without Activant. "It's done just about everything we've wanted it to."

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