Most dealers are pretty good at tracking their inventory. But Candy Loweke knows one kind of inventory most executives never think to monitor even though it could cost them big money. Loweke has spent the past several years tracking the thousands of documents that flow through Raymond Building Supply. Five years ago, all those documents were paper–so much paper, in fact, that the space devoted to architectural plans, bids, invoices, and the like rivaled the square footage set aside for some types of lumber.
Today, a Loweke-led initiative has replaced much of that paper with electronic documents, or EDOCS, as Raymond calls its project. The change not only eliminated tens of thousands of dollars' worth of printing and storage costs, it also helped Raymond become more nimble and entrepreneurial at a time when south Florida's brutal business climate is making it mandatory to be lean and aggressive. What started as an attempt to solve a simple problem has become, the company says, "the hub of our entire quote process."
Loweke's official title is process analyst, but you probably can add "chief persuader" to her business card given the pre-EDOCS mindset at Raymond. The North Fort Myers, Fla.-based operation has always welcomed automation at its factory divisions, such as when it served as a beta site for Alpine Systems' truss software, but it wasn't as quick to embrace improvements to its information systems. Loweke recalls that when she first wrote an e-mail about her ideas to then-CEO Duane Swanson Sr., she discovered he never saw it–because he didn't have a computer at his desk.
As for the EDOCS proposal, while Swanson generally liked the idea, what really drove him was the desire to stop spending $1,200 a month on off-site storage of old documents. But beyond that, Loweke says, executives typically hadn't contemplated the cost of handling paper. So, to make her case, she sat with every person in the company who touched a job folder.
Loweke tracked what they did, counted the minutes they spent on paperwork tasks, and multiplied those minutes times a $10-an-hour wage.
She also found out how much paper Raymond bought (about 40 cases per week for 81/2x11 sheets, plus multiple cases for the blueprint machine), tracked copier maintenance costs, measured the amount of floor space devoted to document handling and storage (the headquarters had 95 file cabinets alone) figured the real estate costs involved, and added those numbers to the tally of staff-related expenses.
Her conclusion: Handling paper cost Raymond several hundred thousand dollars a year.
"It was an eye-opening dollar amount," she recalls. "[Management] could not believe that having a folder and paper had that kind of expense.
"It's easy to say why you should spend money for a saw," she says. "But try to sell that same lumber person on a system that'll save you $200,000 because you're not moving a file folder when that executive's desk has four or five big stacks of file folders on it. So yes, it was a work in progress."
Wasted Chances
Atop all the labor and physical costs that Loweke counted was a much more amorphous but significant number: The cost of confusion and missed opportunities. Under the old system, when a sales rep received a set of drawings on which to do take-offs and bids, he would decide how to route that document. Because Raymond offers so many services–framing materials, foundation steel, trusses, windows, cabinets, millwork, garage doors, and installation services, among others–and because each major department has its own estimators, a sales rep managing the job would have to decide which department would receive the drawings and in which order. Often, a single set of drawings would wind its way through a half dozen departments. Sometimes copies of the drawings would be made, but that took a lot of time; Loweke recalls days when 30 truss designers would be waiting around one copier.
Duane Swanson Jr., who became president and CEO following his father's death last spring, says that before 2007, when southwest Florida's housing market was among the nation's hottest, the company was so busy it didn't think about how each department's sales reps were focused on moving just their own products. "Salesmen stayed in their comfort zone, or they felt comfortable working with certain departments and/or product categories," he says.
Loweke suspects there even were cases in which a sales rep who was feuding with a department might deliberately decide against routing a potential quote to that section. As a result, the company missed out on opportunities.
In 2007, Raymond started reorganizing amid an economic meltdown that saw the number of builders plunge 86% in the three main counties it serves. With just 70 builders left in the area, Raymond couldn't afford to let any project–or any sales category within a project–slip through its fingers.
EDOCS attacks those problems by making the quoting process cheaper, quicker, and more transparent. It started in 2006, a time when designers increasingly were creating plans that could be transmitted electronically rather than delivered in paper form. EDOCS created a digital library to hold the plans and an electronic routing form to manage them. Information systems department manager Joe Fillmann helped install those systems; today he provides technical support to Loweke.
While getting plans electronically was a boon, reading them was a chore, because designers were using upwards of half a dozen different formats. Loweke decided that, for consistency's sake, all incoming documents–both electronic and paper–needed to be converted into one format. Eventually the group chose PDFs.
Now, all incoming electronic plans go into a shared mailbox in the e-mail system. From there they are retrieved, reviewed for completeness, converted from their initial formats into PDF files, and placed in a file server. Old-school paper drawings undergo the same review and conversion. This work is overseen by designated EDOCS administrators, particularly Marleena Lowman in the Fort Myers and Naples branches and Ken Pavel in the North Port facility.
