From file "012_PSMs" entitled "PSpw4.qxd" page 01
From file "012_PSMs" entitled "PSpw4.qxd" page 01

The big buzz in the construction supply industry currently is managing the distribution channel and supply chain collaboration. But often, software implemented to boost efficiencies can do just the opposite if inappropriate technology is utilized or if it is not integrated and operated within a system of open communication between the technology provider, IT staff, employees, customers, and vendors.

There's no doubt that the Internet has reduced telecommunications costs. But while these steps forward have helped many companies, a barrier has evolved that is crippling profits at others: the miscommunication between an IT department and the rest of an organization. I am seeing little or no collaboration in the information channel on this level in my work with dealers across the country.

For example, during a recent consulting assignment at a truss facility, I witnessed a contracted technology specialist unplug a computer router during the middle of the day and then drive across a major metro area just to test it at another location. The truss plant was cut off from customers and its internal network for most of the day without warning. Imagine the ire of the plant manager as his productivity came to a screeching halt without any notice.

Too often, technology decisions such as this one cause a supplier to lose customers or profits. Since employees are not collaborating about these issues, the people in charge of managing profits don't realize the enormous impact a miscommunication like this can have on the bottom line.

Here is how I would have handled the event: First and foremost, the IT people—in-house or consultants—need to collaborate with executive management. The IT department/consultant and the executive should have notified the plant manager about taking the operations down, at which point the manager probably would have suggested that the testing take place after hours. In addition, standardizing computer equipment and keeping a spare router on hand should have been a component of the company's backup systems.

As an industry, we have to break down these barriers if we want to remain competitive. Communication should start from the beginning—with proper and extensive research and analysis of what systems your company and channel partners truly need—and continue through everyday implementation of those systems. Regardless if you are hiring IT people as employees, as outside contractors, or on an as-needed basis, make sure there is collaboration in your information channel. It doesn't matter where your IT support comes from, but it is imperative to manage it as a business process integrated within your entire company.

This isn't the first time communication has been key to business evolution. In the '80s, we began managing companies using financials in closed-board offices. We then realized that we had to practice management by wandering around, as defined by Peter Drucker; we had to get out and see what was going on. In the '90s, we began re-engineering, which meant the same thing, except we began looking at each process and its contribution to the bottom line. In the last few years, we have evolved into companies that are driving close to 100 percent dependency on technology to drive the business. Now is the time to see what effect the technology is having on the customers, to not just invest in the technology, but to invest in making sure that the implementation of the technology is having a positive impact on the bottom line.

Supply chain collaboration in the information channel is a key to increasing your profits. But when implementing systems, don't neglect the importance of following through with business process analysis to ensure that the IT investments you make will pay off. —Chris Rader is president of Rader Solutions, a Lafayette, La.–based management information solutions provider for the construction supply industry. 504.273.0030.