Business savvy

Steve Short isn’t a “techie” but that hasn’t kept him from capitalizing on the role technology can play at Updike Supply -- Industrial Distribution, 4/1/2001

Other articles from this Distribution Technology Target Report:

Draw your e-business roadmap
How search engines can help
Viewpoint: Capitalizing on exceptions


By Victoria Fraza, Managing Editor
  

A dual approach to technology
Updating Updike's systems
Offering the Autocrib solution
Company snapshot

Steve Short’s business savvy is evidenced by his decisions. He’s tripled sales at Updike Supply since purchasing the cutting tools and abrasives distributorship five years ago. A number of factors contributed to that growth, but perhaps the biggest was his decision to invest in technology — both in information systems and as it relates to products. The funny thing is, Short says he’s no “techie” — and that he doesn’t know much about cutting tools, either.

“I at least try to understand what’s going on and then find the techies that can help,” explains Short. “Just like I’m not a cutting tool person — I’m a business person, but I’ve got some great cutting tool people working for me.”

In truth, Short knows a lot about systems and software and about the manufacturing process. For starters, his background is in the auto manufacturing industry. And as for computers, he reads just about anything he can get his hands on for ideas about how to better run his company. As company president, Short says it’s his job to have the vision, to think long-term — and then find the resources to turn those goals into reality.

“I’m always trying to figure out where we need to be going,” says Short. “Then get the right resources to implement whatever plan that might be.

“My basic philosophy is that technology has to be viewed as a tool — as any other investment and business tool.”

To that end, Short reads, researches and seeks outside help on technology issues. The ultimate goal is to streamline internal operations and bring better solutions to customers so that they, in turn, can work more effectively.

That isn’t easy — especially for a small company. Updike Supply has 19 employees and sells to the automotive, aerospace and general machining industries in southern Ohio, northern Kentucky and eastern Indiana. Despite its size, the company has succeeded on the technology side by finding affordable ways to access and implement new systems and software. The result is improved productivity and service — and the ability to share more of the company’s success with the people who work every day to get the job done.

A dual approach to technology

Short says that too often distributors think about technology in one of two ways — as computer software and hardware or as it relates to product knowledge. What they should be doing is looking at it from both sides.

“A lot of times people want to focus on information technology, on the business of doing business,” he explains. “But we’ve also focused a lot on the evolving technology as it relates to the manufacturing process.
“We’re trying to provide a total solution to impact our customer’s bottom line.”

On the product side, that means investing in cutting tool specialists — which Short has done — and providing ongoing product training to employees at all levels. To do that, Short utilizes vendor training programs and also gets training materials from business associations and other outside resources. Staying up-to-date on the latest product enhancements allows Short and his staff to give customers a key value-added service — the ability to solve problems and improve processes. This is especially important on the cutting tool side of the business, where Short and others say technology is rapidly changing.

“If you’re using a product today that you were using two years ago, there’s something else on the market that will outperform it,” says Tom Carroll, Sandvik Coromant’s sales manager for central Ohio.

Carroll has been working with Updike Supply for just over a year, but says one of the reasons he was attracted to the company was its commitment to both sides of the technology equation. Updike Supply regularly participates in Sandvik’s training seminars, which Carroll says is an important part of its long-term success as a distributor. He also values Updike’s investment in information technology, as it helps the company bring a “total solution” to the end user.

“[Technology] is a competitive advantage, because a number of competitors aren't doing it.”
—Steve Short, Updike Supply

That “total solution” includes electronic ordering and invoicing, inventory management, special tooling design, troubleshooting, and, of course, the ability to recommend new and time-saving products. What tops it all off is that Updike Supply is nimble enough to adjust to customers’ needs and provide them with a customized total solution.

“We’re not here to sell you a program,” says Short. “We’re here to understand your business needs and objectives and what Updike Supply can do to help you meet them.”

The “systems” side

Within six months of purchasing Updike Supply, Short upgraded the company’s Prophet 21 software and converted from a terminal-based to a PC-based system. When Updike moved into a new building three years later, he added a Local Area Network, allowing employees to share information and communicate more effectively.

The company is constantly upgrading the enhanced system — most recently adding a DSL line and Virtual Private Network. The new technology allows remote and on-site employees to connect faster and easier to the Updike system. It eliminates long-distance, dial-up charges, instead allowing employees to connect directly through the Internet.

Short says the upgrade will cost Updike Supply less than $5,000 and will save about $100 a month in long-distance charges.

He stresses that he relies on outside help for such enhancements. With the recent upgrade, Short was invited to a breakfast meeting hosted by a business group selling the new technology. He was curious about it, so decided to attend the two-hour session. While Short could have spent those two hours talking with customers or dealing with suppliers, he says it was important to spend the time investigating a solution that could help make the company more productive in the long-term.

President Steve Short, left, and executive vice president Jeff Butts are committed to investing in new technology at Updike Supply.

“I don’t know how to do all this, but I take the time to bring vendors in, experts in, and listen to them,” says Short. “Business people, in general, get so busy doing the day-to-day, they don’t take the time to research where they need to be in the future.”

Short is quick to point out his team of employees, whose work is what allows him to think long-term. Executive vice president Jeff Butts, for example, takes care of day-to-day operations and works closely with Short on long-range planning. The company’s systems administrator took it upon herself to learn about the Web and now manages and maintains the Updike Supply Web site. Along those lines, the systems improvements have helped customer service reps, salespeople and warehouse employees do their jobs more efficiently and effectively.

Time and energy aside, the question becomes: Where does Short find the money to invest so heavily in technology? First and foremost, he says distributors need to look at technology much as they do their investments in office space, inventory and personnel.

Still, it isn’t always easy for a small company to come up with the cash for major investments. Short says he’s been able to make many of the improvements by hiring intermittent help — in many cases, full-time computer whizzes looking to earn some extra money working off-hours for small companies like Updike Supply. Short says most large companies have people like that on staff who are willing to work for a reasonable rate. He adds that word of mouth is often the best way to find them.

An “automated” solution

Updike Supply’s advanced technology can best be seen in some of its inventory management programs. The company will tailor a program to each customer’s needs — providing customized stocking programs and, in some cases, tool dispensing machines. Updike Supply is the exclusive area representative for Autocrib, a tool vending machine concept that controls inventory on the plant floor and streamlines the ordering and fulfillment process.

Such programs also help Updike better manage internal operations.

“When our customer is inefficient,” explains Short, “we have to go into a panic to find what they need, expedite it, etc.… That builds inefficiencies and unnecessary costs into our system.”

Instead, inventory management programs — especially Autocrib — help Updike Supply become the purchasing arm for the customer.
“They are outsourcing the purchasing function to us,” notes Short. “In the process, the customer becomes more efficient and we become more efficient.”

Updike Supply uses other efficiency-enhancing technologies, as well. For example, select customers use EDI and the company has eliminated internal paperwork for the remainder of its accounts. Purchase orders and invoices are filed electronically and automatically faxed to customers and suppliers — with no hard copy generated within the walls of Updike Supply.

As technology improves, Short expects even less paperwork — especially on the inventory management side. Eventually, orders will be electronically transmitted from the Autocrib units through Updike’s system and directly to its warehouse, without going through the customer service department. Today, Autocrib orders must be downloaded and re-entered into the system by Short’s customer service reps. Saving that step will mean higher productivity levels.

That’s a key reason for Short’s investment in new systems. By doing more with less, he’s able to share more of the company’s success.

“One of my basic philosophies is that as the company does better financially, the employees should do better financially,” says Short.

The bottom line? Investing in technology makes business sense.

“[Technology] is a competitive advantage, because a number of competitors aren’t doing it,” says Short. “I consider it no different than if I had a proprietary cutting tool that outperformed the competition. Distributors would kill for that. I see technology as the same kind of competitive advantage.”