No Slowdown In SoftwareTechnology innovations are offering metal service centers more ways to extract value from software programs.
Software programs have been a mainstay in service centers for decades. Certainly, by the year 2020, every modern distribution company has one or more programs handling aspects of the business.
Despite the ubiquity, the prevalence and importance of these technology innovations is only growing, and doing so at an accelerated rate.
Companies throughout the metals supply chain increasingly rely on information technology to handle chores once reserved for human beings, an ever-more-necessary requirement as service center operators struggle to fill vacancies in all areas of the business. And the leading software providers continue to innovate, finding new ways of delivering value and removing costs from metals operations of all sizes. It’s a must.
“In the old days, when you were replacing a Kardex system, anything was better than that. Now you have to be better than the last system that was implemented,” says Shawne O’Connor, director of Paragon Consulting Services, the York, Pa.-based maker of Metalware.Metal Center News
spoke with leading software providers to get a sense of what trends are taking place in the metals IT space, what service center customers are looking for out of their programs, and what might be on the horizon as the metals industry becomes more and more comfortable with the embrace of technology.
Here’s a look at a few of the areas of business software systems are addressing:Efficiency Experts
From automated tasks previously handled by humans to shop-floor flexibility to logistics gains, improving efficiency remains perhaps the single-greatest asset of software programs.
“Any automation that can take human error out of the equation or minimize it is a huge push we’re seeing everywhere,” says Mike Voran, regional sales manager for Enmark Systems, Ann Arbor, Mich. “Anytime you can have a machine doing something that a person would have done before it allows your resources to be focused on other things.”
Voran points to his company’s adaptation of SteelXML as an example, where once a mill or vendor has given a service center advanced shipping notice, it will send a file that will import directly into the software, so “all of the keystrokes that would normally be done at the receiving end are no longer there.” The SteelXML initaitive is being expanded to many other areas to continue the push toward a univesal language between sysems in B2B relationships, regardless the software vendor.
Software also works on the other side of the commercial exchange. “Many companies still go to a file cabinet when they get a request for a material test report, having to rummage through the cabinet, copy and send it to the customer. Modern ERP systems should be able to present an MTR to a user. You can set it up so the customer automatically gets an MTR test report as well as a packaging slip automatically sent to them. It’s another way of automating time-consuming tasks,” says Paul Parsons, vice president of sales and marketing for 4GL Solutions, Stouffville, Ontario.
Existing systems also look to integrate third-party software solutions to accomplish some of the same goals, whether by a company’s own staff or through outsourcing of functions. Voran notes that Enmark integrates Avalara, which replaces the need to manually update systems with ongoing changes, such as tax rates, and Yaypay, an automated collections system.
And the gains don’t stop at the warehouse door. Paragon offers delivery tracking using Google Optimizing to help build a truckload and best plan the route. “It’s a way to optimize delivery outside the core ERP,” O’Connor says.
“Service centers are looking for seamless from start to finish, from the sales perspective and marketing all the way through to the shipment to the customer and tracking that. And having easy access to that information so you can update the customer exactly where things stand,” she says. Forecast: Still Cloudy
The move to the cloud to handle a company’s infrastructure is not complete, but the migration continues.
“If you looked 3-5 years ago, the verdict was still out, as a lot of companies were uncomfortable with the concept of moving concepts to the cloud,” says Andrew Callaghan, principal of Microsoft ERP Services of Indianapolis-based Crowe. “Now there’s a shift. The comfort level has increased and now they’re seeing the benefits of letting other firms deal with the infrastructure side and the hardware side.”
And this trend toward outsourcing needs is expanding. “We’ve seen a big trend with our customers signing up for what we call an on-demand hosted environment,” Invera’s Ray Vasson says. “Normally a company would have to buy and maintain and do all the work on the servers. We’re maintaining the hardware for them, and we’re doing the upgrades.”
The benefits go beyond no longer needing to have an on-site IT department, tasked with keeping up to date on all of the latest upgrades. There’s also a benefit to the industry as a whole, as the companies can focus on new developments, rather than constantly running individual updates on existing products.
“In the past, you had firms like Microsoft who were just shipping software, throwing it over the fence and saying, ‘Good luck,’” Callaghan says. “Now, with the software as a service model, these platform providers have so much control to make sure all of these enabling technologies tie together. We see the rate of introducing new technologies increasing.”
There’s also a push toward what Vasson terms “platform-independent architecture.” In that case, companies are not tied to a specific hardware or technology vendor, but can choose from multiple options depending on their needs.
“It allows our customers more options when purchasing their hardware,” says Vasson, the president of the Houston-based software provider. “On our side, what we’re doing to address that is to offer a Linux-based version of our software.”Meeting Complex Needs
The service center of 2020 is not the same operation as the one of 50, 25 or even, in some cases, 10 years ago. The evolution of the metals supply chain has resulted in service centers moving downstream to capture more value and improve on the razor-thin margins that often characterize the business.
“Especially in what I would call the service center industry, the people cutting linear products to length or burning products, they are more and more being pushed down upon to do what I would call more traditional manufacturing. They have to fabricate some kind of assembly or get into producing a finished good for their customer because their customer is trying to reduce its own costs,” says Kevin Ameche, vice president of Medina, Ohio-based Wolcott Group, makers of the RealSTEEL software.
That kind of development, obviously, demands different software requirements.
“From a software perspective, traditional systems that managed inventory and did some rudimentary accounting and material costs are no longer fitting the bill. Not only do you need all of the things that are unique to the metals industry, but also true bill of material and routing type work,” he says. “Traditional service centers typically don’t have people on staff who know what a bill of material or routing is, much less a production order or be able to do work centers and machine centers and capacity planning and the things that are necessary to a true ERP. As we do more implementing, we find ourselves conducting more training about traditional manufacturing to work hand in hand with traditional service center work,” Ameche says.
Each service center is a little bit different, which needs to be understood by software providers.
“One of the things that customers are always concerned about when talking to ERP vendors is whether it is really going to be able to handle their business in the way they would like it to be handled,” says Parsons.
He recommends any software provider should do an on-site business assessment with prospective customers, to fully understand how the business is run and any gaps that might exist within the existing software package.
“There’s a core functionality that all metal service centers want to see. But it’s not unusual that someone will want to do business a little differently than our software is able to handle,” he says. “We have to make the decision whether to educate the potential customer on ways to do it in a different manner or to create custom programming to give them exactly what they want.”Communicating Within
The push for mobility also continues apace. That can happen in the warehouse, where floor managers can use phones or tablets as they move around the facility, no longer tied to a single location. Operators can also perform some of the operations remotely, if the need arises. Bar coding and other developments enable this increased mobility.
“Crucial to our strategy is the release of new mobile functions for a phone or tablet. This includes a design that is more mobile-friendly, with larger buttons and streamlined screens, so the sales or warehouse personnel can focus on the function at hand,” says Vasson.
Apps are also being introduced to aid all elements of the operation. While there aren’t many designed specifically for the metals warehouse, “we’re seeing more efforts around mobility and apps. I think Microsoft is doing a great job putting that front and center with their broader strategy,” says Callaghan. “It’s not going to be one-size fits all, but helping companies through digital transformation through these smaller apps.”
Internal communication and reporting of data are also of paramount importance to the sales and management staff. That’s typically where dashboard come in. Dashboards aren’t just about offering sales information, but incorporating the many different functions in a service center operation.
And, of course, that information must be accessible. Software systems provide the opportunity to tailor daily or weekly reports and send the right information to the CEO or sales manager, so it’s on his or her desk every morning.
“Reporting is often lacking in the systems they have,” Parsons says of older models. “It’s critical that the modern service center have access to a wide variety of reports. It should be easy to generate those reports, and they should be able to export them to Excel for further manipulation.Software as a Sales Tool
Software systems aren’t just for managing the internal needs for the business. They can also be a valuable means for selling material.
Customer portals have become a must for many operators, giving metal buyers a closer look at a variety of information the service center is willing to provide.
“Any good customer portal will have a couple of flavors. One, it will allow access to order material. The other is more of an administration module, allowing access to documents customers might want to see and email back to themselves,” says Parsons.
But companies are looking beyond portals, none more than FastCAM Software. The company has spent years specializing in building software for quoting. Now, it’s taking the next step, developing software to optimize the quoting process.
“Most of the time companies spend giving quotes, and 9 out of 10 don’t turn into an order,” says Dr. Matthew Fagan, founder of FastCAM Inc., Chicago. “And it can take you an hour to three weeks.”
FastCAM’s MTO allows users to automate and digitize drawings and submit them for quotes. And rather than require multiple submissions to potential customers, the system allows them to reach several targets simultaneously.
“One problem in the industry is bad quotes. And companies are competing with the guy who makes a mistake,” Fagan says.