- Location: Aurora, Illinois
- Industry: Lumber and Building Materials
- Sales Profile: 80–90% Pro, 10–20% Retail
- Number of Locations: 19 retail yards and 2 truss plants
- Website: www.alexlbr.com
Alexander Lumber operates two truss plants and 19 retail lumber yards in Illinois, Wisconsin, and Iowa. The company had acquired a number of disparate business management software solutions through expansion. In 2010, the company’s owners decided to standardize operations on one solution and selected Epicor BisTrack software.
Better business performance
Alexander Lumber leverages the tightly integrated BisTrack business analytics tools to evaluate and improve business performance. “You can’t judge what you don’t measure,” said Russ Kathrein, CEO of Alexander Lumber. “If you’re not measuring, you are making decisions based on anecdotal evidence and not concrete numbers.”
For example, sales people will often push for special treatment for what they believe to be “good customers.” However, accurate customer grading requires objective analysis of a customer’s gross profits generated, terms, payment record, orders, returns, etc. These objective metrics can frequently tell a different story about many accounts that were previously identified as “good customers.”
“We use BisTrack software to measure many of our company’s key business initiatives, and track our progress in achieving those initiatives,” said Rick Vancil, executive vice president of Alexander Lumber. “For example, we can analyze our fleet maintenance costs to identify vehicles that need to be replaced. We can also compare the cost of different repairs from different mechanics. We are continuing to look for ways to drive costs down in our business by utilizing the wealth of data tracked in BisTrack.”
Higher margins with less inventory
Alexander Lumber has been able to dramatically reduce inventory with the help of BisTrack. “In the past, our employees would walk around the lumberyard and make purchasing decisions based on what they saw,” continued Kathrein. “Now, BisTrack gives our buyers a company-wide view of inventory. If one location is low on a particular item, our buyers have the option of transferring merchandise from other locations, rather than simply purchasing it. We were also able to identify product categories that had low sales rates in certain locations and removed them from future purchases. Using this approach, we were able to reduce our inventory by one-quarter… or roughly $8 million.”
Alexander also improved gross margins by improving control on special orders and by setting up margin-specific incentive structures for its outside sales people, location managers, and district managers. Margins were up two points within the first two years using BisTrack and are continuing to rise. “These business leaders earn a percentage of the profitability of the business units they run,” said Vancil. “Location managers are financially incentivized to carefully manage their inventory and make it productive. All of this information is collected and reported by BisTrack.”
Empowering a mobile salesforce
Outside sales representatives are most effective when they are outside meeting with customers. In the past, Alexander’s outside salespeople would have to either call or return to their office to get all of the information they needed to write quotes and sales orders.
Last year, Alexander Lumber began providing the company’s salespeople with Microsoft Surface tablets running BisTrack. The tablets have full cellular data capabilities, which give these users full access to all the rich functionality of BisTrack software out in the field. “Equipped with BisTrack on a Surface tablet, our salespeople were able to immediately respond to customer questions on product availability, pricing, and delivery status. It has proven to be a valuable sales tool,” said Vancil.
Accelerating the Lamborghini
Despite their success, Alexander executives feel there is far more they can do. “We have called BisTrack our ‘Lamborghini that we drive 25 miles per hour on Sunday,’” said Kathrein. “BisTrack offers an almost unlimited amount of information. It has helped us lower inventory costs, improve business efficiencies, and increase margins, but I feel we have barely scratched the surface on what we can accomplish with this wonderful business solution. Once we get everyone in the company using BisTrack to its full potential, our company will be running like a finely tuned Italian sports car.”