LEbANON, PA. — APR Supply Company of Lebanon, Pa., was founded in 1922 as Lebanon Plumbing Supply,and today has grown to become a major regional HVAC/plumbing distributor with 24 locations, nearly 200 employees, and $58.5 million in annual revenues. Ranking #XX on this year’s Wholesaling 100, APR was also honored as business of the Year for 2009, 2010 Executive of the Year, 2011 CFO of the Year Finalist, and one of the Top 50 Fastest Growing Companies for 2010 by the Central Penn Business Journal.
Since becoming APR Supply through a merger in 1982 under thenpresident Randy Tice, the company has had a strong emphasis on understanding and managing technology. Historically, this included becoming an industry leader by facilitating credit card orders with a third-party credit account, introducing a website, and offering an interactive e-commerce website well before other wholesalers.
“We consider ourselves to be on the leading edge of technology within the plumbing/HVAC wholesaling industry,” said APR president Scott Weaver. “In 1995, we were one of the
first to go from frame relay technology to using VPNs via the Internet to run our branch-to-branch communications – which resulted in significant cost savings. but our real vision for the Internet was to enhance relationships with our existing customers, which included becoming one of the first plumbing and HVAC wholesalers to offer Web commerce.”
Today, 12% of APR’s sales take place through an electronic format. Selecting a future-focused distribution solution APR began working with warehouse management software provider Activant Solutions (now Epicor Software Corp.) in 1994, and was an early adopter of its Eclipse™ Enterprise Resource Planning (ERP) solution. Weaver recalled, “As an undergraduate major in Management Information Systems who was entering the family business, I quickly realized that SHIMS, our previous distribution
software, could not meet our business objectives. In order to move into the future and provide our customers with a superior level of service, we needed a real-time ERP
system, and SHIMS could not provide that.”
Eclipse represented modern-era, multi-tiered, object-oriented architecture – what Weaver believed was needed to carry APR through the next 20 years and beyond. He added, “Moreover, the Eclipse developers understood wholesale distribution, and set out to create software to solve problems in the industry, working collaboratively with us. For example, we jointly designed the credit card module, and then Eclipse enhanced it
for all users.” Recent innovations In just the past two years, APR has introduced numerous technology innovations into its business. Currently, the company is in the process of upgrading to Solar Eclipse, which provides the user with a Windows® interface rather than a terminal or character-based screen. Weaver commented, “Although we are currently undergoing additional training for our employees in the transition
to Solar Eclipse, we view this as a necessary step in order to keep our competitive edge. The modern enhancements required to remain competitive just cannot be supported by the older, terminal-based technology.
“Additionally, the point-and-click environment of Solar Eclipse lends itself readily to the up-and-coming technology of smart cell phones and tablet devices. Currently, we have several people accessing Eclipse — both Solar and Eterm versions — on mobile phones, and some are even using Apple® iPads®. With this technology, we can access Eclipse wherever we can get a cellular signal, and it works with both the Apple iOS™
and Google® Android™ operating systems.” APR also uses MITS® (Management Information Tools) for data mining and analysis. Weaver believes the business intelligence extracted from MITS creates a foundation for more transparent, partnering relationships
with customers.
“MITS allows us to ‘slice-and-dice’ our sales data, see trends and patterns of customers’ purchasing habits, and make changes accordingly,” Weaver explained. “We
can sort data year-over-year or quarter by quarter, and ask questions like,
‘Why did the customer stop buying Product X?’ This allows us to help customers with their business needs and problems, giving us a more consultative sales role.”
In addition, Tour de Force™ by MRH Technology, a companion Customer Relationship Management tool, is now being rolled out to support the APR sales force in providing superior customer service. According to Weaver, “Tour de Force assists the sales staff in scheduling, follow-up, communication and documenting customer activities. Tour de Force also includes business intelligence by pulling data directly from our Eclipse system to provide sales and A/R information. This allows the salesperson to get the total picture of a customer from one package without having to access information from disparate systems.”
In spring 2010, APR upgraded to a Linux server for running Eclipse. This upgrade dramatically improved Eclipse system performance at a fraction of the cost of a more traditional mid-range system. Ongoing server support and maintenance costs were
reduced, as well.
APR also offers remote access via a Microsoftv Remote Desktop Connection; APR’s IT team can publish applications there for all company users to access from any Web-enabled computer. Weaver explained, “Using this technology, APR employees can access a fully functioning APR Windows desktop virtually anytime and anywhere. Our ability to satisfy
our customers is greatly enhanced and becomes more immediate
by not being tied to a computer at one of our locations.”
Additional technology implemented recently included switching from traditional flip-type cell phones to Web-enabled smartphones for APR branch managers, inside and outside sales reps, and technical support staff. Microsoft Windows 7 is being rolled out to all branches. In the back office, most server functions are now virtualized,
and include upgrades to Microsoft Windows Server 2008 R2, SQL Serverv 2008 and Exchange
2010. To streamline its operations, APR has implemented RouteView™ for truck routing and tracking, RF in all 24 branches (for transfers and putaway), and EDI with several manufacturers.
Lessons learned
Not every foray into new technology has gone as planned. In 1999- 2000, an attempt at Palm Pilot™-based order entry failed because synchronization and connectivity with the company’s PCs proved too difficult, and the Palm devices couldn’t handle the complexity of APR’s data (i.e., SKUs for 10,000 products). Now, APR just uses the Palm devices for signature capture by its delivery drivers. Signature capture, a best practice for item tracking, has had several unexpected benefits. For customers, the date and time stamp provided with the signature allows them to monitor their receiving employees’ whereabouts.
For APR, the proof of delivery available from remote locations enables them to look up the signature in the system and fax it to the customer.
As with most changes, APR has learned that not everyone embraces technology changes equally. Weaver noted, “New technology is followed up by training and an in-house support network to help ensure the technology moves from physical installation, to adoption, to ultimately becoming an integral part of daily operations.” Information drives collective success APR attributes much of its rapid growth over past 10+ yearsto its use of distribution technology. According to Weaver, “We couldn’t have a central
distribution center without Eclipse. before, our stock used to be dispersed among branches; now it can be centralized, which offers tremendous savings in inventory and
delivery costs. We have enjoyed significant savings in the distribution center due to the picking and putaway efficiencies built into Eclipse. We also use Eclipse to track our warehouse error rates.”
On the latter, the company currently boasts a 99.6% delivery accuracy rate, including internal transfers.
“Real-time access to information is one of biggest benefits of Eclipse; if
you change a piece of data in one place in the system, it changes it everywhere. The system provides intelligence between inventory and demand, and gives our users everything they need to do their jobs,” observed Weaver. “Everyone knows they’re
working off of accurate data that reflects the up-to-the-second realities of the business.”
APR has also appreciated the scalability of Eclipse in helping it expand from four branches to 24 without having to switch systems. While APR has adopted new technology at a rate faster than many, one of their keys to success is purchasing technology that makes good business sense.
“We only pursue new technology where there is a clear payback, reducing expenses, increasing sales, or providing a very clear benefit directly
to our customers,” Weaver explained.
“We will not purchase technology just for the sake of new technology.” Weaver notes that all employees need to understand why the technology is important, to help overcome any initial resistance and achieve long-term success. Under APR’s “open book management” best practice begun in 1999, every employee is considered a partner, and shares in a percentage of the profitability that the company achieves above the industry average. APR was at or below the industry average from 1990- 2000; changing the company culture, combined with the introduction of technology, has allowed them to remain above the industry average ever since then.
Weaver concluded, “We can’t run the company without our distribution software. We say, ‘If it doesn’t exist in Eclipse, it didn’t happen.’ We are entrenched in the technology; we absolutely rely on it to run the business.”