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Fastener Technology International - October 2003

In June 2003, we acquired Faspac Systems, Inc., and combined Faspac's enterprise software solutions and services for fastener distributors with our existing line of technology solutions for durable goods distributors.

The adding of Faspac's customers to our already broad fastener customer base has made Prophet 21 the dominant technology provider in the fastener market and has further strengthened our domain expertise in the distribution industry as a whole.

With over 2000 customers and 70,000 users conducting over US$35 billion in highly complex supply chain transactions annually, Prophet 21 has constantly sought for ways to strengthen its expertise among durable goods distributors. Faspac Systems was a powerful force in the fastener market and we were fortunate to be in a position to acquire the company.

Now, all Prophet 21 users, whether they use UNIX-based solutions like Prophet 21 Faspac and Prophet 21 Acclaim or a Windows-based solution like Prophet 21 CommerceCenter, benefit from the melding of Faspac's specific vertical market expertise with Prophet 21's technology leadership and corporate strength.

The following looks at the specific benefits provided by Prophet 21 to two fastener distributors.

Full Circle-Fastener Distributor Uses Technology to Nurture & Expand Business

In 1979, 27-year-old Jim Sperling had the entrepreneurial itch. He wanted to work for himself, but didn't know where or what to start.

He used to discuss business and the economy with his father-in-law, a foreman for a Pennsylvania, USA coal mining company. One day, his father-in-law complained that the people who were selling him the bolts for coal breakers weren't doing a good job. He thought that they were taking advantage of the miners. The mining company wanted to buy from someone else, but there was no one else to buy from.

The seed was planted-Sperling would sell fasteners.

He and his wife started their business, Circle Bolt and Nut Company, from scratch in the front bay of a garage. They emptied their savings account, bought fasteners and started making sales calls. Sperling found success, despite his admittedly limited product knowledge. "When I started, I barely knew what nuts and bolts were," he recalls. "Now I help engineers find better ways to use those nuts and bolts."

Preparing for Progress... Five years after the Sperlings started Circle Bolt and Nut, they realized that their company needed better structure and more organized processes. They needed a computer. "We knew that we couldn't grow if we kept doing everything by hand," Sperling says. "We wanted to get bigger and make more money, and we knew we needed to do more without hiring hundreds of people."

In the early 80s, most business owners still handled processes manually. There weren't many computer systems for distributors, but Sperling found some-thing at a fastener trade show that suited Circle Bolt and Nut. The solution, Prophet 21 Faspac (formerly Faspac Classic), was designed to handle virtually every function in a fastener hardware distribution business, from purchasing to inventory to order entry.

"Faspac is a great system and it helped our business immeasurably," Sperling says. "It kept us cohesive and tied everything together-from front office to warehouse. It has helped us get where we are today."

Today, the Sperlings' business handles millions of dollars in sales, employs dozens of people and has two branch locations in addition to its main office in Pittston, PA, USA with many others in the works.

Accommodating Change, Nurturing Growth... Sperling knows from experience that any businessperson must offer customers state-of-the-art technology. "If you don't, someone else will," he contends. He also knows that a business owner must continually think about what his customers will want in the future. "What our customers want today is important, but it's what they want tomorrow that we really have to plan for."

To offer more efficient and effective service while pre-paring for anticipated customer demands, Sperling recently invested in Windows-based Prophet 21 CommerceCenter and B2B Seller, a Web-based store-front.

"With CommerceCenter, we'll get information to our customers more quickly, which will make it easier for them to do business with us," Sperling says. "And with B2B Seller, they'll be able to get just about anything they need online. Faspac helped us grow into the business we've become. But, we're looking forward to continued growth with CommerceCenter."

Simplify Processes/Simplify Business- Fastener Distributor Streamlines

Allowing salespeople to determine what inventory to carry in your warehouse is a "golden no-no," says Don Rushlow, Inventory Manager of Fastening Systems, Inc. Yet, for many years, that is exactly what many distributors, including Fastening Systems, did.

"We had so much extra stock because we gave our reps indiscriminate power to buy whatever they thought customers needed," Rushlow says.

Now, because of parameters entered into the company's Prophet 21 solution, staffers cannot place purchase orders for non-stock items-like left-handed hex nuts-without first receiving the customer's order.

"We've reduced inventory levels by at least 15 percent because we've established rules and set limits in our solution," Rushlow says. "Plus, we're not just walking through the warehouse to decide what we need to buy. We base purchasing on usage and requirement reports now."

Dollars on the Bottom Line... Fastening Systems, in Jacksonville, FL, USA, employs 50 people at its nine locations. As a distributor of fasteners, including nails, staples and ancillary tools, the company imports many of its products from overseas markets. To ensure that Fastening Systems always takes advantage of vendor incentives such as vendor-paid freight, Rushlow uses functionality that translates the amount of product he imports into its weight. "I have 16 containers coming in from overseas each month, and freight gets very expensive," he says.

Fastening Systems' Prophet 21 solution stores information about minimum purchase requirements for free freight as well as item weights for its major vendors. "This way, when I finish creating a PO for threaded rods or nuts and washers, the system tells me how much more I need to order to get the vendor-paid freight," Rushlow says. The functionality has saved thousands of dollars. "Every dollar we save in freight is a dollar on our bottom line."

Inventory Simplified... Fastening Systems' distribution center in Jacksonville has dozens of aisles lined with thousands of bins, each stocked with different size nails, staples, screws and other fasteners.

Recently, Rushlow realized that he could save a substantial amount of time during inventory by assigning each bin a location in the company's Prophet 21 solution. "We were printing lists by item code and running all over the warehouse trying to find things," he says. "It wasn't the right way to take inventory."

Before Rushlow assigned items bin locations, inventory took more than 15 hours and lasted an entire weekend from Friday evening through late Sunday afternoon. Now, inventory takes eight hours and employees are home before dinner on Saturday, saving Fastening Systems hundreds, if not thousands, of dollars in overtime costs.

Other Benefits... Other areas of Fastening Systems' operations have benefited as well. Denise Stinson, Controller, reports that use of credit validation functionality and better utilization of the Prophet 21 solution's Cash Collections module have resulted in a 20 percent reduction in accounts receivable (AR) days.

"We use Prophet 21 in every part of our business," Stinson concludes. "The key is using everything that's available. It's a great solution and we've seen a lot of great results."

More Prophet 21 Solutions of Benefit to Fastener Distributors...

PDA Integration... In the field, distributors' sales representatives are often burdened with stacks of paperwork or cumbersome laptop computers. Prophet 21 offers a solution with CommerceCenter's Personal Digital Assistant (PDA) integration.

PDA integration enables distributors to store pick ticket data and route information in compact, inexpensive, easy-to-use PDAs. The integration also lets drivers capture customers' signatures upon deliveries, and enables sales representatives to download and store customer order information in a PDA and then upload orders taken on a PDA directly into CommerceCenter.

In addition to PDA integration, the functionality incorporated into the CommerceCenter solutions includes order management, inventory management, warehouse management, purchasing, financial management and reporting and analysis.

Trading Partner Connect... Distributors often pay for dead and slow-moving stock several times-first when they buy it, then over and over again in carrying costs and local and state inventory taxes. Prophet 21 Trading Partner Connect, an Internet trading network that streamlines the commerce process between distributors and their manufacturers/suppliers and end users, helps distributors eliminate obsolete inventory, saving them thousands of dollars in taxes every year.

Trading Partner Connect also facilitates the establishment of online trading relationships with other distributors. Companies can sell their dead stock to distributors in other parts of the country who welcome the opportunity to buy at a discount items their customers demand.

Trading Partner Connect also allows a distributor to source items quickly and to reduce the amount of safety stock carried in inventory.

For more information on Activant's enterprise software solutions, please fill out our Web Contact Form.

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