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IBM technology provides the key to high profits

IBM Small Business Center

Howard Kent's father-in-law founded the Ironbound Supply Company so he could buy valves and pipe fittings directly from manufacturers for his contracting business. But when Kent took the helm, he saw an opportunity to grow a small business with one customer into a thriving enterprise. More than 35 years later, Ironbound Supply is still a small company selling the exact same items - valves and pipe fittings haven't changed much. But the business is dramatically different. Today Kent uses a powerful IBM computer and specialized software to manage inventory. The result is an extremely efficient and highly profitable business.

Rather than trying to become a very large company, Kent decided to control growth and focus instead on the bottom line. "We probably make the profit on $5 million dollars that most companies make on triple or quadruple that," says Kent.

How does he do it?

Technology is a big part of it. Kent relies on what he considers one of his most valuable employees: an IBM RS/6000 (now called p-Series) computer running Prophet 21 software. The software gives him access to the information he needs to run the business efficiently. For Kent, the most significant feature is the ability to track inventory, which he claims is the company's biggest expense after payroll. With Prophet 21 Kent can see at a glance exactly what was sold, how much it cost the company and what the customer paid. He can quickly tell what items are selling the fastest and make adjustments to the inventory.

That kind of information has been critical to building the company's profitability. But according to Kent, the hardware is just as important. "Small businesses can't afford to be without a good computer system,"Kent says. "What sold me immediately on Prophet 21 was that the hardware they're using is all IBM. So I know if something happens, I have a major company to rely on for service and support. To a small business, that's invaluable because if your computer goes down, your whole company is down."

Kent remembers the two rare occasions when the computer's hard drive had to be replaced. "Prophet 21 sent us a new drive overnight," he recalls. "They contacted IBM, and an IBM technician had us up and running again the next morning."

Kent says that kind of responsiveness is critical for small companies who might not generate enough volume to warrant daily calls from hardware vendors. It's important to do business with reliable companies that have good reputations for support. "Any small business that's going to have a computer system needs to know it's dependable," Kent says. "They need to know the service company will still be in business when they need help. I trust IBM."

Learn more about the Ironbound Supply Company at www.SmallBusinessSchool.org and by visiting their Web site at www.ironbound.com

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