As he begins his two-year term as Chairman of TheUserGroup.org, Jamie Hutt-Semple, Vice-President, Operations at Kerr Controls Ltd., is emphasizing the gains and successes the organization can carry forward from past generations of board leadership.
With TUG adopting a more strategic posture as a center for thought leadership in distribution, and the board crafting closer relationships with Infor and dozens of channel partners, Hutt-Semple’s focus for the next year is on building the member participation that is the foundation of the organization’s success.
“Our Infor software is what brings us all together, and information technology will always be an essential focus for TUG. But the shining insight from David White’s term as Chairman is that we’re also all distributors,” Hutt-Semple says. Which is why “TUG now delivers more content that is distribution-driven, with dedicated tracks on operations, purchasing and inventory management, pricing, and finance and a popular executive summit at TUG Connects . That’s an innovation that we’ll carry on and expand over the next two years.”
From Don Green’s recently-ended term of office, Hutt-Semple points to TUG’s excellent working relationship with Infor and the many channel partners that help members capture the best return on our investment in Infor software.
“When our software vendors and we work more closely together, we all win,” he notes. “As users, we drive the efficiencies and strategic insights that build our businesses, and when that happens, we can keep investing in the software that drives our success.”
But that activity both enables and depends on building up members’ participation in their own user group. “I can think of no higher calling, no more urgent priority for the TUG Chairman than to act as a conduit and support for that passion,” Hutt-Semple stresses.
His goals for the next year: Helping every member get a better idea of how TUG’s networks work, and making sure everyone who attends a TUG event for the first time knows they’re welcome, and have something to contribute.
“TUG is already an effective, successful organization,” he says. “But the more voices and fresh ideas we can bring to the table, the better we’ll be. That’s an idea I never plan to let up on.”
For Della Coffelt, Chief Information Officer at Distributors Corp of America and a newly-appointed member of the TUG Board, the return on her participation in the organization is obvious: The more she takes part, the more she gets back.
Coffelt has been involved with TUG since 2011. And when she talks about how her role and sense of connection have grown, it sounds like climbing a ladder of engagement, one rung at a time.
“I started out as an attendee at the TUG conference,” she recalls. “But as I got more involved, I realized I was learning a lot, largely by asking questions and getting answers back from other members. That kind of involvement really changed the way I looked at the conference.”
Coffelt’s next step was to begin delivering conference sessions in some of her main areas of interest, like purchasing and pricing. “As I prepared for those classes, I learned more and more,” she says. “Then I got involved in the leadership side of the organization, helping out with SX.e General, and as a group leader you have access to leadership development and presentation skills training.” Coffe lt got to develop new professional skills, network with other TUG volunteers, and learn the tricks and trade of an effective leader.
“Part of my job is teaching end users, so my volunteer work with TUG made me a better teacher for my company.”
The more Coffelt learned, the more she had to share, and the more she shared and networked, the faster her learning accelerated. “Getting involved with TUG as an organization is something I highly recommend, just because of the personal growth you get to go through. It’s really been incredible.”
What’s astonishing about Coffelt’s story is that it sounds like it unfolded over the course of a decade or more—when she’s only been in a TUG leadership position for the last four years. “From the moment I dipped my toe in and participated, I learned so much that I wanted to get more involved because I knew I would learn more. It was really an incredible sense of momentum.”
Coffelt’s advances through TUG have also helped her deliver better value to her employer. “I’ve been able to apply what I’ve learned and lead my group to become a team,” she says. “We’re grouping together and networking among ourselves so much better. That open communication has really changed the dynamic for the people who work for me.”
Imagine a world where a dozen different disruptive technologies are evolving and improving at breakneck speed, doubling their price-performance in a matter of months and laying waste to existing business models.
Wrap your mind and your own business plan around the reality that that’s the world we live in today.
Now you have some idea of why Salim Ismail, founder of Singularity University, was the all-time top-rated keynote speaker in the history of TUG conferences, after his appearance, last month at TUG Connects 2017 in Orlando, Florida.
“All of our education and training and intuition about the world teaches us linear extrapolation,” Ismail told participants. “We take our past performance and draw a line to where things will be.”
But now, driven by information and computing, the pace of change is exponential. And it isn’t going to stop.
“Once you take any domain, discipline, or industry and power it with information technology and it acquires informational flow properties, its price-performance starts doubling within 18 to 30 months,” he told participants. And once that doubling starts, “it doesn’t stop. It just keeps going.”
Much of TUG’s mission is to help distribution executives deliver strategies that will help their companies survive and thrive in a tough business environment. That’s why we produced a short white paper that captures the main takeaways from Ismail’s talk.
The rave reviews keep pouring in for TUG Connects 2016, with participants talking about the knowledge they took away from conference sessions and the tips and advice they picked up from their colleagues and peers.
From first-time participants to TUG veterans, we keep hearing how much value participants received from the conference—and how certain they are that they’ll be back next year.
Jumping In With Both Feet
Logan Smith of Alaska Industrial Hardware first heard of TheUserGroup.org a couple of months before the conference. “That first day, I probably read hours’ worth of TUG posts,” he says. “I saw issues we didn’t even know were issues until then, so we were sold.”
The company initially decided to register two staff members for TUG Connects. “Then we started putting checkmarks to every class we wanted to go to, and realized there were more classes than there were enough of us to attend. By the end, we had four full-time employees there for the entire conference,” and “none of us were prepared for how much we learned in those four days.”
Solutions That Work
Before the conference, Smith was looking for a solution to a problem with substitute items coming in from vendors. A simple process in Alaska Industrial’s legacy ERP system seemed to require manual entry in SX.e—until Smith and his team began talking to their colleagues at TUG.
“The first day there, we met someone from another IT department who had the same issue,” Smith recalls. “Not only did he offer to help. He showed us the solution he’d come up with. That was our first impression—two hours into TUG, we had met a group of users who all had the same issue, and one person who was able to share his solution with everyone.”
Another discussion brought an unexpected solution for stock orders in a distribution center running under TWL. Smith says a simple process change will save his company five to 10 minutes per order on a volume of 300 orders per day.
“We were wasting hours of staff time just trying to get orders shipped,” instead of using the counter sales system that already worked well for AIH’s eight retail outlets. “We didn’t know our process was broken,” he says. “We would have just continued on the way it was.”
21 Years of Content and Networking
For Jeff Focke of Shealy Electrical Wholesalers, it’s no news that TUG Connects! is the place to be to get the most out of his distribution software. He’s been attending the conference for 21 years and has no plans to stop.
“What keeps me coming back is the excellent content, and the networking with my fellow users and peers that I’ve worked with over the years,” he says.
Someone recently asked Focke what he gets out of the conference when he’s a regular presenter each year. “I answered by quoting Confucius,” he recalls. “’Only the wisest men and the stupidest men have nothing to learn.’ I always have something to learn and people to share ideas with, to hear about things we may not have considered. It’s just a first-rate forum.”
‘The Business is Always Changing’
TUG Connects! 2016 focused on the transition to the Web UI, but Focke says every year’s conference features state-of-the-art content on the latest industry issues.
“The distribution business model is nothing new, but the business is always changing and evolving,” he says. “So there’s always something new to do, a new way to do it, a new feature set. It’s always something we haven’t thought about before, something new on the horizon that’s going to challenge us and push the limits of what we know, or of what we think we know.”
Distributors have always known that their success would rise or fall on their ability to add value for customers.
But as the definition of added-value extends beyond familiar standbys like local or consignment stocks, next- or same-day delivery, off-hours service, or specialized expertise, TUG Board member Mark Law is urging companies to adopt a three-step approach to making added-value more than a “sound bite”.
“We need to have a process in place to identify the added-value and document it,” says Law, Group IT Manager with the Hayley Group in Doncaster, UK. That makes it essential for distributors to:
Understand what customers see as added-value and get their sign-off on the definition
Identify opportunities to add value that benefit the distributor’s business, as well as the customer’s
Document the savings in time and dollars, so that customers can readily see the value you’ve added.
“It’s not necessarily about picking out specific issues,” Law stresses. “There’s no rule that applies to every business. So we have to have a process in place” to identify the issues that matter most to each customer.
Avoiding the Commoditization Trap
In an era of fast production and mass automation, individualizing a distributor’s service offering sounds like something new. But Law says distributors do it all the time—or if they don’t, they should.
“It’s always been there,” he explains. “Otherwise, we end up just being the cheapest vendor, which is a game none of us should want to get into.”
But as the business environment gets tougher and customers become more discerning, it takes more to make the offer stick.
“In the past, we could just say we had the best service in our area. Now, customers want us to prove it.” That begins with understanding what changes or improvements will matter to them most—even if it means getting a different story from each major account, and responding accordingly.
“You have to have that conversation with the customer before you start doing anything,” Law stresses. “If the customer needs help reducing stocks, you have to ask what it’s worth to them.” With the details clarified and the customer signed on, “you can start keeping a record and reporting back on what you’ve achieved for them.”
Learning to Be the Best
So how does a systematic strategy for adding value help build your business? Law says a customer-centered approach positions the distributor as a trusted advisor, not just a supplier of a particular product line. And those in-depth conversations about what constitutes value will bring you ideas and insights that you can generalize to other customers.
When adding value works, it can cover many different aspects of a customer’s business, from revenue to asset management, from administrative savings to training and technical support. The focus can range so widely, in fact, that Law stresses the need to set priorities.
Register todayfor an open forum on Value-Add functionality in SXe, August 8, 2016 at 11:00 AM EDT. Whether you modify product internally or send material out for fabrication, coating, assembly, etc, this discussion will prove fruitful!
With Don Green starting his two-year term as Chairman of TheUserGroup.org, watch for continuing emphasis on helping members get the most out of their information technology systems—and the business systems behind them.
For Green, Director of Operations at Choctaw-Kaul Distribution, it’s all about adopting change.
“We’re going to continue to help members realize a return on their technology investment, whether it’s on the current version of their software or on any upgrade they’re considering,” Green says. “It’s our job to help them continually drive the value of their overall investment.”
The other big takeaway is that adoption is not about IT alone. For Green, the ah-ha moment came from a breakout session at TUG Connects! 2016.
Technology and More
“What was amazing was how the group came to the conclusion that the greatest potential related to non-technical dimensions,” he recalls. “In the end, it was simple. How do we get our employees to adopt change? How do we address factors that really don’t have anything specific to do with software and technology? It was more on the human side to drive change all the way through an organization.”
He cites the executive track at TUG Connects! as another example of a non-technical discussion that brings a broader, more mature focus for the organization. “It used to be a group of users, a bunch of techno-geeks who got together to talk about software solutions,” he says. “TUG still does that, and it’s an important part of who we are. But in today’s TUG, there’s a much broader vision of the strategic planning we can offer impacting the whole organization, beyond just the technology group.”
Members Helping Members
The term “user-to-user”, or U2U, is almost as old as TUG itself. Green cites the transition to cloud computing as an area where the concept is as important as ever.
“So many people are embracing the concept that cloud is a bona fide business solution, and at TUG, you’ll find many members who are already making the transition,” he notes. “The ‘pay it forward’ sentiment is so essential to the TUG community, so you know people are going to share their experience and best practices.” Whether a user has a question about their Infor software, or about other cloud products, “TUG members are there to help each other out.”
Building the Community
Green says his priority as TUG Chairman will be to encourage more members find their own reasons to get involved with the organization. And he says the Board as a whole is in a strong position to carry on the growth and development TUG has seen over the last two years.
“I’m honored to be in a position where I can serve the membership in this way,” he says. “We have a strong board, we have a really strong membership, and I very much look forward to continuing to serve such a dynamic member group.”
The last couple of years have left TheUserGroup.org with a stronger relationship with Infor, a higher profile as a distribution thought leader, and several Special Interest Groups that are shifting their day-to-day to work to a broader, more strategic focus.
My term as TUG Chairman has gone by in a blur, but as I look back over the last 24 months, I’m incredibly proud of what we’ve all achieved together.
Infor Partnership Delivers New Enhancement Request System
All relationships take work, and the partnership between TUG and Infor is no exception. We’ve been paying a lot of attention, Infor has, too, and I really think the relationship is stronger now than at any other time since I became involved with TUG about a decade ago.
We communicate clearly, honestly, and frequently. Infor executives are very responsive to our needs. And TUG is fulfilling its role as a vehicle for the user community to speak to Infor as one, rather than 450 disparate voices belonging to different companies.
The new Enhancement Request System that Infor released at TUG Connects 2016 gives our Special Interest Groups a direct conduit to Product Management, enabling us to make the case for the features we need to move our businesses forward. It’s taken a lot of time and effort to get this done, and it’s a huge milestone! Until now, it’s been very difficult to track enhancement requests once they were submitted. Now, anyone can log in and get a clear picture of a request’s status, who thinks it’s a good or bad idea, and whether it’s getting any traction at all.
That’s just one example of what happens when a user group like TUG and a company like Infor can build open, transparent lines of communication.
Thought Leadership: Focusing on What’s Next
It’s been very important to me to build TUG’s standing as a distribution thought leader. TUG members all operate in different industries, but at the core, we have a lot in common as distributors, particularly as distributors of a certain size. Our executive track at TUG Connects has helped our members focus on what’s next. As a result, I think many of us are running better companies than we may have been two or three years ago.
The executive track covers a mix of different topics, but succession planning is a great example of a big, looming issue that many of our members haven’t had time—or made the time—to properly address. All of our employees want to know their jobs will still be there when the owner decides to retire, so we should all be trying to train our replacements. The reality is that none of us is indispensable, and it’s up to us to make sure our companies continue to thrive when we pass the torch to the next generation.
In addition to the executive track, we’ve held some useful webinars on how to set up training plans and mentor tomorrow’s leaders. And we’ve been practicing what we preach, working with our SIG leaders to improve their presentation skills. Leadership development has been a major theme for us across the board, and I would expect to see that continue.
Special Interest Groups: Changing the Conversation
The last couple of years have seen a few of our Special Interest Groups shift their work and develop beyond a narrow niche, focused on a particular product. The Storefront SIG is a great example.
Storefront is still one of our most important groups, but we’ve also seen members form an e-Commerce SIG to look at the wider universe of platforms that interact with our back-end ERP systems. And it’s amazing to see how that has changed the conversation: Instead of talking about where a particular widget should be on a Storefront page, it’s all about how we move our businesses forward in an e-commerce world.
In much the same way, the EDI SIG has morphed into the Business Process Automation SIG, moving beyond its earlier, more narrow focus to talk about how we automate our business processes and minimize the number of touches on every transaction. Because fewer touches means driving costs out of our businesses and making them more profitable.
It all adds up to a pretty good return on your investment in a TUG membership.
Lots to Look Forward To
I’ll be staying on the TUG Board as Past Chairman, and I’m looking forward to contributing over the next two years. We’re very fortunate that Don Green is taking over as Chairman—he’s a high-energy guy, he’s just full of great ideas, and he’ll be backed up by a good, solid board filled with very bright people.
My company will still be heavily involved with TUG because it’s a great resource that brings value to the business and value to our people. Really, I struggle to picture where we would be today without the user community to support us.
David White is about to finish his two-year term as Chairman of TheUserGroup.org. He is President of Kyana Packaging Solutions in Louisville, Kentucky.
Contributed by Eric Allais, CEO, PathGuide Technologies
If you’re thinking about switching to a new WMS, you’re probably more than a little intimidated. That’s normal—it’s a vital business decision, and you want to be sure you’re making the right one. Replacing your WMS might pay off in the long run if the new system offers enough improvements over the old one to make the implementation process worthwhile.
When contemplating a better WMS, the most important question is how your current WMS is holding back productivity. Matching requirements to functionality will help you identify the areas where you need to improve warehouse operations, making it easier to know what features to look for in a new system.
The following points will help you navigate the selection process.
Does your WMS integrate with your ERP system? This is the most obvious question. Many smaller WMS providers now support major ERP systems, so you’re no longer locked into the WMS provided by your ERP vendor.
How experienced is your implementation team? Switching to a new WMS may involve changing warehouse processes, retraining employees, and adapting to the new system, but a well-planned and executed implementation makes this much easier. Ask how much experience the vendor’s implementation team has and how their past implementations have gone. This will give you perspective to help make the WMS migration as minimally disruptive as possible.
Is your WMS customizable, and how easy is that process? This question is vital. Every company has its own unique business processes and the WMS will usually have to be tweaked to fit them. How responsive is the vendor? Make sure to take the cost of enhancements into account when calculating the overall price of the upgrade. If it’s difficult to modify the WMS, how will that affect your workflow? On the other side, an easily customizable WMS can improve your warehouse in ways you might not realize. As examples, we have customers that have created unique will-call systems or customized modules for managing cut items, such as wire.
What kind of support do you offer? Will I get a live person on the phone when I call? Can I call 24 hours a day? What’s the average response time? Problems will come up with any new system, so be sure you can solve yours quickly. Find out as many details as you can about the training process ahead of time, because this will let you know how easy (or difficult) you can expect it to be. Being able to talk to a local product expert any day of the week is much different than getting a phone number for a help-desk call center in a foreign country.
Can your WMS integrate with carousels, vertical lists, and/or conveyors? Many small and medium-sized distributors find that these material handling systems are good ways to expand their operations without adding more floor space. If you’re a growing company, looking for a WMS that integrates with these can make it easier to expand a few years down the line.
Can your WMS extend to provide small parcel carrier shipments, including less-than-truckload? With the rise of ecommerce, single-item shipping is only going to increase, so make sure your new WMS can handle it.
Does your WMS automate the handling of inbound dock scheduling? We’ve seen a trend in the WMS industry toward modules that let you schedule incoming freight. Some WMS vendors also offer transportation management systems. This could be a good way to make your unloading and shipping processes more efficient, particularly if your company isn’t big enough for a full Yard Management System.
Upgrading your WMS doesn’t need to be complicated, as long as you plan for it. Armed with answers to these questions, you’ll be well prepared to make the right decision to create significant opportunities for your company. Best of luck in your search!
At TUG Connects! 2016 last month, anyone who attended one of the three sessions delivered by Grant Howard, CEO of Grant W. Howard Co., came away with a new sense of their business mission.
For years, Howard has been urging distributors to focus on three key objectives: Customer experience, profitability, and growth. At his much-anticipated best practices inventory management spring workshop, he’ll be hammering away at the message he delivered at TUG Connects!: We know what to do, and it’s time to deliver.
Vision to Results
The connection from vision to results is where the best strategies often go off the rails. “What matters here is helping distributorships develop their mission, their strategy, and their strategic objectives, but then ensuring that what we do at the tactical, action level lines back up with that,” Howard says. “It’s basic, but it’s an area where companies struggle so much.”
From the executive level on down, that means a standard formula for success: set objectives, establish ownership, then measure performance.
Metrics and Measurement
Measurement “is the huge missing piece in most companies,” Howard notes. “We geared a lot of the discussion at TUG Connects! around how to set objectives you can measure, then how to measure to drive results. Because measurement is what connects the strategy with the tactics and results.”
The key takeaway: While software enables solid measurement, it can’t do the whole job on its own. “They call it business intelligence and business analytics, but unless you know what to do with the tools, it isn’t very intelligent or analytical,” he says. “The real question is whether your data search is well enough aligned to take you on a guided fishing trip, rather than an unguided voyage where you hope to find something.”
All 10 of Howard’s inventory management best practices are embedded in all of Infor’s current distribution ERPs, but the right tools can’t deliver against poor strategy or weak implementation. The first step in getting strategy right is to understand distribution’s unique, indispensible role in modern supply chains.
“Inventory is the reason for being for distributors,” he says, because “distributors are the buffer. Manufacturers can’t produce to demand, and they don’t want to produce to warehouse it. End users don’t want to buy in large quantities.”
So “distribution was formed in the middle,” with the result that “inventory is the core of our being. That’s what our business is. And yet, so many distributors just do such a poor job with it.”
An Inventory Strategy that Pays for Itself
The great thing about a strategic approach to inventory management is that the effort pays for itself.
“If your company is not making best use of the new technology available from Infor to manage your inventory, it’s missing the tools and processes to drive stellar customer experience, profitability, and growth,” Howard warns. He’s more modest about describing his own workshop as an essential tool for success, but the testimonials from last year’s event tell the story.
“Easy to follow step-by-step of how it all works and see the big picture,” wrote one purchasing manager. “Presentation was great—energetic. Experience was educational—Not the least bit boring. Time flew by—Open to all questions—Great information!”
“I have been with my company for almost eight years, and I’ve learned more in three days than I’ve learned in those eight years,” agreed an inventory analyst in the class of 2015. “You’ve hit on every point that I’ve been missing to make my job so much easier. I greatly appreciate you for making this so simple.”
Click here for more information on Best Practices Inventory Management with Grant W. Howard, June 7-9, 2016 in Novi, Michigan.
Scott Benfield, principal of Benfield Consulting, sees the rapid growth of e-commerce as an unstoppable trend, but also as an opportunity for distributors to boost the efficiency of their operations, protect market share, and acquire new customers. He recommends careful planning to avoid “digital washout”—that moment when you’ve invested heavily in building a modern-day customer experience, only to find that no one is using the new system and it isn’t generating sales.
In this interview, Benfield traces three trends behind the e-commerce explosion.
1. Better Software
Software has improved dramatically since the early days of web ordering, but Benfield says distributors still need four separate packages to deliver a good customer experience: a transaction module that monitors orders, status, and finances, a product information management (PIM) system to populate a distributor’s content management platform, faceted search software, and a procurement management or punch-out system that allows a customer to search the distributor’s catalogue and place an order on their site.
Most systems are sold à la carte, and that’s a problem for mid-sized companies, Benfield says. The software itself is pricey enough. But the cost of combining the components and integrating them with in-house systems makes for an even more expensive proposition.
“That bundle is a real concern for mid-sized companies right now,” Benfield says, “and it’s also a concern for the enterprise systems.”
But “as you would expect, software is getting better for the mid-market. Products are getting developed that answer the need for companies like TUG members.”
2. Integrated Platforms
Some of the newer enterprise systems are beginning to bundle two or more e-commerce components into integrated platforms that aren’t quite perfect for distributors—but Benfield says they’re getting there. Some vendors are also introducing unique features—like one transaction module, developed in California and embedded in a cloud-based enterprise system, that has top ratings.
Another breakthrough in the making: Most e-commerce platforms require duplicate databases, rather than relying on the existing one in an ERP. But a vendor recently entered the United States with a product that dovetails nicely and cost-effectively with databases in SAP, Microsoft, and a couple of other large ERP platforms.
“You buy the ERP, and the e-commerce platform is fully integrated, so there is no duplication of data,” he says. “Most people I know will buy that.” With new and better options hitting the market every day, Benfield is convinced that costs will continue to come down.
3. Avoiding Digital Washout: Integration with Workplace Practices
It’s a story TUG members know well: Any new software package is only as good as the implementation and support plan behind it. Digital washout is what happens when software is acquired without a plan and fails to deliver results. “It’s a problem when wholesalers don’t transform their organization to use the software,” Benfield warns.
The disconnect could be as basic as not having a plan to migrate existing customer accounts to the new system. “Yeah, I’m serious,” he says. “I’ve seen it happen.”
With a sophisticated new e-commerce system in hand, a company shouldn’t miss the moment of opportunity to rearrange its sales and redeploy its sales force to make best use of the technology. By measuring and categorizing accounts by net profitability, distributors can separate out the more marginal customers and hand them over to the e-commerce system. The sales rep cuts the frequency of his or her follow-ups, leaving more time for the highest-value relationships and customer segments.
E-commerce also opens the door to operational efficiencies, from shipping policies and costs to the location of warehouse hubs.
Across the board, “you have to sit down and plan it out before you go online in a big way,” Benfield says. “People are going to compare you against the leaders out there, the Graingers, the Amazons, and your functionality has to be as good as theirs in what you do.”
For more bright ideas on e-commerce, register today for TUG Connects! 2016, February 14-17 in San Antonio, Texas.