BUSINESS COMPUTER SOLUTIONS
Arvin Meyer has more than 25 years experience in fabricating wood, metal and plastic. Arvin serves as a consultant and a technical writer to several companies. He is available for consulting on fabrication at the rate of $75 per hour. You may contact him at P.O. Box 125, Free Union, VA 22940. Having now been in the computer consulting business full-time, for slightly over five years, it still amazes me how many businesses are still in the "dark ages" when it comes to their office computer systems. Many of them are still using computers as glorified typewriters, and when they do advance beyond that, they are using a spreadsheet to bid on jobs, thinking that each job, because it is "custom," cannot be bid the same way that any other job is bid. Further, each customer has a "special" relationship to the business, and these special customers have a price structure known only to the owner, the sales manager, or the super wonder woman who has been with the business, since the dawn of mankind. The biggest problem with this type of thinking is that it doesn't allow for successful growth. Growth is limited, because the owner must delegate responsibility in order to move forward, but the body of knowledge which determines the success rests with only highly skilled employees who also have many long years of experience with the company. To grow, one must hire new employees. The problem is, there is no possible way for a new employee, no matter how intelligent or well educated he/she is, to garner the experience of those with many years of service with the company. The problem is further exacerbated by competition. Keeping a tight profit margin is a necessity for continued sales. Older thinking companies will, under these conditions, never be able to compete successfully. There is an old joke about some immigrants (I'll leave it to you to add or ignore ethnicity here) who because they didn't know the language well enough couldn't find a job. Gathering their limited resources, they rented a truck, and purchased a load of watermelons at a price of 10 cents each. They figured that they could make a profit if they sold them for 12 cents a piece. Sales went OK, but it was difficult keeping the change correct and communicating with the customers. To solve their change and communication problem, they then sold the watermelons at a price of 3 for a quarter. At the end of them first day, they had of course, lost a small amount of money. One of them turned to the other and said, "Do you think we need a bigger truck?" Sadly, this is being done every day, although the method is far more sophisticated. As a business grows, it is tempting to keep using the methods that led to success in the first place. The fallacy in this is that methods that are highly effective for a small operation are totally ineffective for larger ones. As responsibilities must become delegated throughout the business, the need for control must change from upper-level management keeping track of individual events, to keeping track of those who keep track of individual events. That is, the chief executive should not be interested in the results of each contact that a salesman makes, rather, he should be interested in how the salesman is managing all of his contacts. To do this, the executive must have a system capable of tracking the sales personnel, not necessarily each customer. Is the salesman making enough contacts? What are the results of the contact list for that month? These are the questions that should be asked. As more and more sales people are added, this becomes an unmanageable goal without using a computer database to track the daily, weekly, etc. trends. To think that only a person can accurately track the individual accommodations that a business makes to gain sales is erroneous. As an example, I was called into a large metropolitan kitchen distributor to solve a problem. It seems that one of its customers, a builder who ordered hundreds of kitchens per year, wanted to break down the cost to individual cabinets, in order to cost control his design elements. The distributor had priced these kitchens using a formula based on the manufacturer's selling price. Then, however, he reduced the price by an amount varying from one to two hundred dollars to "close the deal." It was too complicated for him to reflect this cost differential into a formula because it would mean that the same cabinet would be priced differently in different kitchens. Using a database, in this case Microsoft Access, I was able to create a formula that allowed for price control, while still allowing his "accommodation pricing." It created a variable which considered his "deal discount," and applied it only to that customer, and allowed him use a different amount for differing customers. Since the invoicing could only reflect a per cabinet price, the variable considered the total number of cabinets, and apportioned the differential based on their size, style, and the square footage of the finished kitchen. Problem solved. Innovative database design, with a clear business goal in mind, will permit, a company to grow with a pattern that achieves the marrying of the small business control needs with the success quotient of a large multi-national corporation. The two do not have to be mutually exclusive. Neither The Plastics Distributor & Fabricator Magazine, nor PMD Publishing, Inc., is responsible for the information or opinions contained in this magazine. All such information and opinions are those of the authors.