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NexAir (Memphis, TN) took a hard look at its technology capabilities in October 2003 after Chairman and CEO Robert McEniry attended GAWDA's 2003 Convention in Vancouver and learned about best practices in technology. “He saw what other companies were doing, realized we weren't that far behind, and said, 'We can do that too,'” explains Assistant Controller Chris Smith. “That's when we started exploring different technologies to determine if there was something that could improve our way of doing business.”

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One of the first things the company did was examine its Web site to see how it could be made more marketable and more valuable to customers. In the past year, nexAir redid its Web site and now is looking at ways to increase purchasing online. Approximately 600 customers—15 percent of nexAir's customer base—currently take advantage of the e-commerce capabilities, not only purchasing online, but also using the Web site to view their account information, including invoices and proof of deliveries. “It puts them back in control of how they manage their account,” says Smith, “rather than having to rely on calling our customer service department to get that information mailed or faxed to them. Saving someone from having to make a phone call is a benefit to us and to the customer.”

However, it was hard at first to promote nexAir's e-commerce initiatives internally because not all of the company's branches had the bandwidth to view the site's capabilities. As a result, nexAir's biggest technology project became the installation of DSL lines to provide high-speed Internet access to all 19 of its branches. “Getting the branches up allows us to start moving more toward a paperless environment,” says Smith. “We can create an employee intranet where employees can find information they usually have to get a paper copy of, fill out HR forms or access information at home.”

The DSL installation was completed this summer, and has been a boon for efficiency within the company. “Anything that allows us to do something more efficiently creates opportunity,” says Smith, acknowledging the large amount of time previously spent waiting for a slow connection.

For the 15% of nexAir's customer base who currently take advantage of the company's e-commerce capabilities, it all comes together here, at one of the company's server racks.

When it comes to technology projects, Smith notes that there are factors to consider before taking the plunge. nexAir's e-commerce initiative is ongoing and customers are increasingly taking advantage of it, but it appeals more to certain customers than others. For example, customers who tend to place repeat orders, such as hospitals and universities that place the same order every week, find the system extremely convenient, and nexAir's Web site provides them with a custom list they can order from. Many other customers, however, still prefer more traditional methods of ordering. The company also has found more success with new customers than older customers in convincing them to try e-commerce, because the option can be presented right up front.

Part of the solution to that disinclination on the part of customers to adopt new technologies comes through employee education. “With DSL, employees at the branches are able to pull up the Web site very quickly,” says Smith, “opening up another medium for communicating with the customer and showing them a different way of ordering.”

There can be a lot of expense involved in implementing a large technology project, and it's vital for a company to understand exactly what it is getting into. “nexAir won't just throw a lot of money at something because everybody else is doing it,” explains Smith. “We go through a lot of cost analysis to make sure that it's going to produce a return on investment that is suitable to what we want.” The major expense involved in the recent DSL project was upgrading equipment, which amounted to $500 per branch. The DSL connection itself is no more expensive than what the company had been paying, and the amount the company did spend will pay for itself within a year. “It's hard to measure the savings in productivity,” says Smith.

Following its successful implementation of DSL and expanded e-commerce capabilities, nexAir has looked into other initiatives as well. The company considered handheld devices, but ruled against such a move because it couldn't be cost justified at present. nexAir also is looking at moving from EDI into XML in the future, which would allow customers to place orders in real time, with orders going directly into nexAir's system, rather than diverted to a third party host, as with EDI.

While the myriad options available to distributors could seem overwhelming, nexAir is primed for advancement. “There's a lot of technology out there right now,” says Smith, “and whatever we choose has to make sense for the company. Now that our branches are up to speed, we're ready to follow through with other initiatives.”

Larry Aarsby, president of Gases Plus (Gillette, WY), wanted his company to get a better handle on tracking inventory and to reduce the number of errors in shipping and receiving. He knew that tackling these issues would ultimately help employees provide better customer service. As the company initiates the use of technology in its daily procedures, that focus on taking care of customers remains the primary goal.

Doing things manually leaves room for error and takes up valuable time. Inventory could be slightly off or a customer might be shipped the wrong product. Sometimes errors are made in transfers from one branch to another. If you create an error out of one warehouse going into another warehouse, it adds up to four errors. “You can imagine how just one item wrong throws your inventory off between two of your branches,” Aarsby says. Gases Plus began searching for a solution.

Four years ago, handheld devices were brought in to control shipping and receiving. An order is first sent directly to the handheld. The employee pulling the order will scan the barcode to verify it's the right order. It's quick and it's accurate. “They know we're going to pull the right item because we're reading the barcode off the package,” Aarsby says. “Our customers are more confident in us today when we pull an order for them.”

Loren Schlomer, who works as a pumper for Gases Plus, uploads cylinder information from transponders.

The handhelds also have considerably improved the time spent doing inventory, which employees can now do in 20 percent of the time that it used to take doing manually. “Our largest store did inventory this year and they finished in about five hours compared to a two-day period,” Aarsby says.

According to Aarsby, the benefits of using handhelds far outweigh the start-up costs, and Gases Plus is currently in the process of beta testing handheld devices to track cylinders. While the software works fine, the company is trying to overcome some struggles with the hardware: drivers are delivering to coal mines, where there is dirt, coal and dust; Wyoming winters can last nine months out of the year; and some stores are at 7,000 feet of elevation. Because of these reasons, the batteries in the handheld devices often don't run the full day or stay charged. “These things are learning curves,” Aarsby says. “No one has used devices in some of these types of applications.”

Aarsby describes the ideal business solution as having the ability to scan everything. As technology becomes cheaper and new programs are developing, this is a reasonable goal. “The accuracy that we have now is strictly a result of using equipment that can track products, scan them in, and scan them out,” he says. “We're gaining on technology all the time.”

For a company as expansive as Airgas (Radnor, PA), implementation of technology can be a special challenge. A central focus for the company over the last three years has been the development of e-commerce. “Airgas decided to make an investment into technology to help streamline the operations, enhance our customer interfaces, and make sure we were a leading player in the electronic commerce market,” says Kelly Justice, senior vice president of Airgas Puritan Medical Division, who formerly served as Airgas vice president of e-business, and is now vice president of strategic planning and marketing development. Justice was the original architect of the systems the company has in place now.

The Airgas B2B e-commerce site contains a catalog that lists almost 300,000 items with pictures and descriptions.

Airgas focused on three target areas for its e-business strategy: a state-of-the-art Web site for customers, direct connections with strategic accounts, and direct connections with major suppliers. As part of the first target area, Airgas invested in an electronic catalog system to provide detailed information online. Around that system, the company built its Web site, with the help of an outside consultant. As of one year ago, the site is maintained exclusively by the Airgas team of seven developers. “Our Web site provides customer-specific information in real time,” says Tarek Hussein, director of e-business development and operations. “A customer places an order, and it's real-time—it hits our back-end system the same time he or she enters it.” Customers can check the status of stock, current pricing, the last time they made a payment, and a host of other features.

Airgas has seen activity on the site double every year. According to Director of e-Business Steve Max, 2,000 customers currently utilize the site each month to access account-specific information, and about 25,000 customers access the online catalog every month to view product information. Three years ago, says Hussein, the company processed $20,000 worth of orders per month through the Web site. By March 2004, that figure had grown to several million dollars in sales per month. Airgas continually looks to improve the site's capabilities, and the third and newest version of the site rolled out in May 2004, with features that customized product categories for buyers from different segments of the industry. “We've done some studies that show that for customers using the e-commerce channel, their overall satisfaction has increased,” says Max. “We've also increased account penetration by making them aware of products they previously didn't know we had, and we've improved customer retention.”

The Web site, however, is dedicated primarily to small and medium-sized customers, says Max, although some larger customers do use it. “Some of the bigger customers,” he explains, “wanted us to hook up peer-to-peer with them through third parties.” This became the second phase of Airgas' e-business strategy. Large customers—Airgas' “strategic accounts”—can connect their systems with Airgas, so their computers can send orders and receive confirmations online, in real time. “That's a convenience to our customers, allowing them to streamline their costs,” says Max. “It also helps us, in that we get the orders in an accurate and timely fashion, and we can process them efficiently and accurately for the customer.”

The third e-business phase brought the implementation of a system initially designed to communicate purchase orders directly from Airgas to its suppliers. Today, Airgas has connections in place with several of its major suppliers, allowing the company's computers to look directly into the suppliers' inventory. Airgas employees can connect to a supplier's computer system to search for an order status, look up stock, place orders, check pricing, and other features. The system took about two years to construct and required the cooperation of suppliers who modified their systems to allow the connection with Airgas. “In the past,” says Max, “if we wanted to check an order status, first we would have to check our computer to see if we'd received it. If we hadn't received it, we'd have to put the customer on hold or tell them we'd call them back later. Then we'd call the supplier, and the supplier would look it up on their system and get back to us, and then we'd have to get back to the customer. Today, all that is done by hitting a couple of keys.” With the reduced need for phone calls and faxes, there are definite cost-savings on both sides of the connection.

One of the primary challenges in developing a strong e-business program, notes Max, is getting enough momentum. “It takes time to build the momentum behind users accepting the system and learning how to use it,” he says. “The bigger companies want to use technology to buy and sell and deliver product, but many of the smaller industrial gas and welding customers are used to just picking up the phone and calling Joe down at the store. That's why we still have more than 600 branch stores and lots of customer service people, because that's what the customer wants.”

Airgas has done advertising campaigns to promote usage of electronic options, and there are e-business coordinators within every Airgas regional company who are responsible for training, development, setup and serving e-business customers. Customer usage continues to grow, and the future looks bright. “There are a lot of benefits, both from the customer's side and for Airgas,” says Max. “E-business has been a successful initiative for us, and we look forward to more.”

Customer service and rapid response are keys to the technology used by NuCO2. Everything the Stuart, Florida-based company does is designed around servicing the customer efficiently. Because the company operates at three levels—locally, regionally and nationally—it is imperative that the systems work together. “We're very driven by what our customers need from us,” says CEO Mike DeDomenico. “When we think about how we run our business and how technology supports our service level, we're attuned to making sure that it fits at all three levels.”

Driver enters customer information into a Portable Account Link (PAL) unit.

NuCO2 makes over 80,000 deliveries each month to over 80,000 customers in 45 states. Trucks are dispatched from 107 depots across the country. The deliveries need to be managed in a way so that customers always have product when they need it. That means the company must be able to anticipate delivery requirements, and technology helps make it happen. “Since we're a logistics service business, our logistics system is so fundamental and so critical to what we do,” DeDomenico says.

NuCO2 implemented a system called AccuRoute four years ago that provides information on a daily basis; they know where product was delivered, how much was delivered, how long it took and how many miles were traveled. This measures the company's performance and helps determine the future delivery needs of customers. At the time of the implementation, BOC Gases was using a system to route large bulk deliveries and NuCO2 borrowed from them. The two companies worked together to design NuCO2's internal, centralized system.

With 3,000 deliveries made each day, timeliness on any information is critical. The company has the ability to make a delivery today and send the bill to a customer tomorrow morning for the actual delivery. Not only does this provide information quickly to the customer, it helps NuCO2 control cash flow. Handheld devices allow entries to be made at the time of delivery when customers sign electronically. A receipt is printed out at that point and handed to the customer. “In many cases, a convenience store business requires a paper receipt,” explains COO Scott Wade. “We have very sophisticated customers and a lot of moms and pops. We're able to efficiently solve both types of customers' needs from a local and national market basis.” The system also allows NuCO2 to track service work. Any information can be put into the device and receipts can be printed. That way, there is a history of work and issues that have occurred at the location so that they can be resolved in the future.

NuCO2's call center operates 24/7 and takes 450,000 customer calls per year. The calls are put into the internal system, which can generate information into the handheld device for drivers in the field. While NuCO2's customers have the ability to contact the company through the Internet, most of them use the call center because they may not have an Internet-based system on the premises.

DeDomenico says a core element of NuCO2's process is that deliveries are proactive, meaning that the company, to the greatest extent possible, doesn't want to make a delivery based on reaction to a fault; they don't want the customer to have to call them. “We want all of our deliveries to be scheduled,” he says. “This gives us maximum ability for reliability and efficiency.” Drivers sometimes do make unscheduled deliveries, which are monitored and tracked. This is one of the key performance measures that are reviewed each week. Areas that are off track of targeted goal levels are targeted and benchmarked against the industry. “We've created a system that collects information, distributes it out to the field and reports back into the metric so that everyone knows how everyone is doing,” Wade says. This creates a dashboard for management. Every Monday, management meets for two hours and reviews 70 separate metrics around everything from customer satisfaction to reliability to logistics, call center activity and finances. “We couldn't do it without technology,” DeDomenico says. “Our system is geared toward providing customer service with rapid response.”

NuCO2's strategic intent is to double its business in the next five years. Wade says that ability will be driven heavily by technology; it will serve as the enabler. It took two years for the internal system to work the way it does today, and it continues to be refined. Wade offers this advice: “Technology offers you a new opportunity to change your mode of operation,” he says. “There's a little bit of a blind leap out there, but you've got to make a commitment. Once the standard starts to apply itself, you start to see the efficiency curves pick up dramatically.”

NuCO2 continues to look at the next generation of capabilities, and they see technology as a way to provide better customer service and as a major thrust to drive down costs. “Our technology is really geared toward service,” DeDomenico says. “We design everything we do around servicing the customer efficiently.”

Salesperson uses POS scanner attached to a thin client to checkout a customer.

A number of technological initiatives are in the works for Norco (Boise, ID), but one of the biggest is the decision the company made two years ago to switch from its legacy software to all Microsoft Windows-based products and Intel servers. The project is expected to be complete by this time next year. “This is a huge philosophical change in the way we're doing computing at Norco,” says Chris Dominiak, manager of information systems and technologies. “All the dumb terminals are coming out and are getting replaced with either a PCU or a thin client.”

The legacy mainframe limits access to information, so by standardizing on the Microsoft platform, the company will be reliant on one operating system instead of several different ones that often can't be integrated. For example, the integration between Norco's current platform and its warehouse operating system is not very fluid. “By migrating to the same system, running on the same standards, we're able to integrate these two platforms,” says Dominiak. “If we have two systems working on the same level—same operating system, same database—they'll be able to exchange information more easily, more efficiently and more accurately. We're going to gain a lot of flexibility.”

Warehouse personnel utilize automated carousel system to pick product and fill orders at Norco's centralized distribution hub.

The new software brings advantages on the end-user side as well. Most people are familiar with Microsoft applications, which will cut down significantly on Norco's training needs. Notes Dominiak, “I think most people understand point and click a lot better than they do what you get out of a dumb terminal,” or a display monitor that has no processing capabilities. “A mouse offers a more modern-day experience for the user.”

The software change is only a part of a spate of technological advancements Norco recently has worked to implement. Several years ago, Norco President Ned Pontious declared a paperless initiative, and in response, the company implemented an intranet that has worked so well, Norco purchased a document management system to go along with it that just rolled out over the past summer. The system is Web based, allowing employees to log in to have access to documents and share information. “IT simply maintains the infrastructure, and the user base is the contributor,” explains Dominiak. “Now, we have a dynamic information base that always has the latest information available for employees, like employee handbooks, HR publications, forms having to do with the FDA or compliance, and those types of things.”

The company also is in the midst of testing point of sale bar code readers, a move that was requested by branch managers this year. With the installation of bar code readers, employees at branch stores will no longer need to learn thousands of inventory parts numbers, thus reducing training time and eliminating errors. “Without GAWDA's help in developing a bar coding standard, this wouldn't be possible,” says Dominiak. “We felt that now was the time to do it, because about 80 percent of the items we purchase are now bar coded.” The company beta tested the bar code readers this summer before deciding to proceed with a live deployment, a standard procedure for the adoption of new technology at Norco.

Fiber DS3 construction at Norco's central office in Boise

Norco's main warehouse is partially automated, and the company is moving in the direction of a fully automated warehouse. Inside the warehouse are six carousel systems, equipped with bins as large as two feet by one foot, in which industrial products are stored. “They've really improved the accuracy and the time of delivery of product to our branch stores, and have reduced staff in our warehouse, so they're able to operate a lot more efficiently,” explains Dominiak. Products come from the main system and go into the carousel system, and an operator pulls the orders up and batches them for a particular store. The carousel system spins around and pulls the product right to the operator, lights up and tells him or her how many to take from that bin. The operator removes the product and hits a button, and the carousel spins to retrieve the next order. In the meantime, that operator can pull items from the other five carousels. The company is also looking into wireless solutions that pickers and receivers will use throughout the warehouse, as well as warehouse management software.

Efficiency and accuracy are a top priority at all levels of operation, and Norco understands that a streamlined workforce benefits both the company and the customer. “Norco's motto is 'To serve you better,'” says Dominiak, “and I don't believe we can do that without the appropriate technology in place. The customer is becoming more and more tech savvy, and people expect things at an accelerated pace. It's important to establish the electronic needs of the customers.”

As such, Norco is constantly looking at ways to implement technology to improve both its bottom line and the customer's experience, and each year a committee gathers to determine which new technologies the company should apply. “Our goal is always a return on investment,” Dominiak observes. “We look at what business goals this is going to help us solve or achieve, whether that goal is to grow our business, continue growing, or grow at a more accelerated rate. These are things that are going to take Norco into the next decade of growth.”

National Welders Supply's Handhelds Deliver Accuracy and Efficiency

When it comes to utilizing technology at National Welders Supply (Charlotte, NC), Rick Smith, vice president of planning and technology, looks for it to do two things: to meet and hopefully exceed customer requirements and needs, and to take costs out of operating processes. “We're in an industry where relationships and technology are tied together,” Smith says. The speed and efficiency provid-ed by technology have helped pave the way to stronger relationships between this distributor and its customers.

National Welders Supply has 50 physical locations in the southeast, dominantly in North and South Carolina and part of Virginia. There are three air separation plants, two major production locations and 15 repackaging plants that go along with 43 retail operations in the area. National Welders Supply was founded in 1941 as a small business, and currently employs over 800 people. In 1996, a joint venture was established with Airgas, Inc. Technology is central to running operations at the company, which has a staff of four programmers.

The company just received its first request from the federal government on RFID. National Welders Supply has a large contract to maintain and repair the government's oxygen acetylene and nitrogen cylinders used on military ships. The cylinders are shipped from the company stacked on pallets, which the government wants equipped with RFID devices, and National Welders Supply is starting to explore making that happen.

The company also recently launched an XML project with a large North Carolina university. National Welders Supply wrote an integration package for the university's 300 users to go onto National Welders Supply's Web site and place orders with validated accounting and shipping data. Orders are forwarded to the university's administration for confirmation, and then sent to National Welders Supply's order fulfillment system for same day delivery. Shipping data are then fed back to the university so it can invoice its customers without re-keying any information. “We're seeing a lot of large organizations requiring their vendors to consolidate and offer more services under a single vendor code,” Smith says. “They're looking for more transparency in the relationship and they want to be more automated. That's what's driving us to do a lot of things utilizing the latest technology.”

Three years ago, National Welders Supply gave handheld devices to its CO2 division drivers, who make an average of 15 deliveries per day. The 22 drivers use the devices to barcode accounts and to input information. While the CO2 is being pumped, the handheld prompts the driver with any problems or customer comments. At the end of the day, the information is uploaded to the corporate office into a batch program. The billing clerk reviews the batch the very next day and automatically downloads it into the billing application for the customer. Prior to this technology, billing clerks had to input handwritten information from the drivers, which can often be hard to read and are prone to errors. This would take a lot of time and staff to do, and customers were kept waiting for their bills. “If we did it the old way, we'd have three billing clerks,” Smith says. “Now we have one billing clerk who handles almost 6,000 invoices a month.”

Handhelds were also given to the 45 cryogenic distribution drivers a year ago. In the past, the complete process of making the delivery, road time, forwarding the delivery tickets for billing and completing the billing process could take up to five days before the final customer billing was completed and mailed to the customer. Now drivers can upload any information the same day the delivery is made. It is reviewed by the billing clerk the next morning and the invoice goes out that afternoon. The sooner the customer information is received, the sooner National Welders Supply can address any concerns, and know where their trucks are and how much product is left on the truck. Data are sitting in front of a supervisor the next morning, and action can be taken immediately. “We're getting information four to five days quicker than we used to get, which makes the road in front of us a lot clearer,” Smith says. “This allows better communication between us and our customers.” Because these are large deliveries, there are a lot more dollars involved. By implementing handhelds, the cash flow has been positioned to improve by three to five working days for this division.

Although the implementation of the technology was a struggle at first, Smith is impressed with the return the company has seen from these investments. “We had some resistance when the handhelds were first introduced. People were used to doing it the old way,” Smith says. “You have to deal with those individuals and emphasize this is the way we're going to operate now.” The cryogenic handheld system cost $300,000, and Smith expects less than a two-year return on it. The company saw the CO2 return in under one year.

National Welders Supply's high-end customers are demanding automated solutions that will drive costs out of their own companies, so National Welders Supply is working hard to stay on the cutting edge. “We're a believer in investing in technology, provided it has a good business sense about what it will accomplish,” Smith says. “I am primarily interested in knowing what it will do to help us help our customers, and what they want is our technical expertise to provide solutions.”

Charlie Wright, CEO of Wright Brothers Inc. (Cincinnati, OH), envisions his company being paperless. This vision started to take off just over a year ago when the corporate offices were moved away from the fill plant. “The move gave us the opportunity to embrace the technology that would make our company more efficient and effective,” says Wright. “I thought we'd be able to expand our company and increase business simply by taking our customized computer systems to a new level.” Wright Brothers has evolved into a technologically savvy company, moving closer to that paperless dream, and hasn't looked back once.

Customer Service Manager Vicki Patterson tracks service calls using a GPS system.

To get employees in the mindset to use technology more, an electronic conference room was designed. During meetings, information from a laptop is displayed on personal monitors around the conference table. “By using individual monitors, our meetings are more conducive to productive conversations, as opposed to just looking at a projection on a wall,” Wright says. The laptops are also used to create spreadsheets, prepare word documents and develop proposals; employees send each other e-mails during meetings to keep as records. “All of a sudden, we weren't seeing paper come into the conference room,” Wright says. He references a customer project the company worked on with the original proposal in a notebook. Everything else was done electronically through e-mail because it was easy to move around and update. “I became very aware of how much clearer, more organized and better documented it is using electronic communications,” Wright says. “These capabilities have certainly enhanced our professionalism with our customers.”

Not every employee at Wright Brothers has a laptop, which is where the terminal server comes in. Wright compares it to the movie Back to the Future, where computers are actually more like terminals. Employees can go into the conference room and log into the server that is mounted under the conference table to use their computers as though they were sitting at their own desks. The server also allows for the company's branches and fill plant to be centrally maintained from the corporate offices, without having to physically go there. A third advantage of the server is that employees can pull up the screens of other employees if they have a question. “If someone at our Florence store needs assistance,” Wright says, “we can actually bring up their screen as if we were looking at our own, and answer any questions. The terminal server has had a huge impact.”

The Internet could provide the push for companies like Wright Brothers to become paperless. Employees and customers are constantly using it. Four years ago, the company's computers connected to the Internet with a modem. Today, with a DSL line, the ability to work with customers has significantly improved and allowed additional growth. Instead of just one computer dialing over a phone line, there are now three computers that process concurrently. Wright is also able to access the company system from his computer at home. He can pull up the data processing system, the general ledger system, the GPS system and communicate via e-mail. “The direct connection enables us to better communicate with our customers,” he says, “reducing transaction costs for them, as well as ourselves.”

What Wright never imagined was the need for a full-time IT person. “But we do,” he insists. IT Specialist Scott Brickey maintains the servers and sets up a process to scan delivery tickets, which has made document retrieval easier for employees and doesn't keep customers waiting. “It takes five seconds at the most to find a ticket. It used to take an hour to look through cabinets to find something,” Brickey says. An even more efficient solution the company is carefully looking at is using handheld devices that collect customer signatures electronically. “Anything that slows our trucks, slows our customer deliveries, which is not good,” he says. “If you're slowing down a $200,000 truck, there better be a very good reason for doing it.”

“Paperless” may be somewhat of a buzzword in the industry today, but Wright Brothers believes it to be a necessary strategy, and they are determined to meet it.