The last couple of years have seen the digital transformation of the timber industry move up not one but several gears as businesses increasingly looked to ecommerce to help them survive and thrive during the worst of the Covid pandemic.
Similarly, software system providers have been in overdrive, supplying the necessary solutions and continuing to innovate to keep ahead of the curve.
Digitalisation of the timber industry is not complete, however, with some businesses still on the brink of making the move.
“Digitalisation within the merchant sector is growing at the same pace as others sectors. All merchants are looking to have digital process and solutions,” said James Mitchell managing director UK and Ireland at Kerridge Commercial Systems (KCS).
“This is to be expected,” he continued. “Many customers will visit the branch when sourcing products and the relationships that have been built over the years are very solid. The combination of the two creates a ‘phytigal’ landscape and our solutions reflect this total demand.”
He added, however, that the adoption of mobile and internet technologies continues to grow and that KCS expects this demand to increase as its customers continue to evolve and innovate.
“Although, thankfully, the pandemic seems to be behind us, it has had a major impact on how people now buy goods. We are all seeing the significant growth in distribution centres across the country and changes in customer expectations regarding delivery.”
Mark Hughes, regional vice-president UK and Ireland at Epicor, agrees that buyers’ expectations have changed.
“Of all the industries we serve, merchants have been the slowest to adapt to the emerging technologies and for good reason – a lot of their business is transacted face-to-face and they have good relationships with customers,” he said. “But the buyers have completely changed and they want to be able to check stock before they go to the branch, they want click and collect and they want deliveries.
“There is a way to go and now that customers are able to get back in through the doors the pressure [to adopt ecommerce] has eased and some merchants are breathing a sigh of relief. But they are the ones who will be left behind and it is the ones who have embraced change that are now offering innovative solutions.”
As an example, Mr Hughes went on to cite one large merchant chain customer of Epicor that had now completely automated its credit application process to solve a genuine business problem.
“Its customers can get their trade accounts set up and their orders placed online without ever interacting with a person, enabling them to shop instantly. The merchant is seeing a big take up of this facility, which has accelerated the process not to mention the environmental benefits of going paperless – a game changer for the industry too.”
While merchant’s software demands remain broadly similar, the current adverse economic conditions are encouraging them to see new ways to reduce costs and drive growth, said James Mitchell, adding that KCS’s product roadmaps are all geared towards meeting those challenges.
It’s a similar message from Epicor, with Mark Hughes highlighting supply chain issues, soaring prices and staff shortages as major challenges for the merchant sector.
“We had a period last year when some were buying stock ‘just-in-case’ and when it was available,” he said. “Now they are questioning if they really need stock at the moment and whether they are going to be left with it.
“These are the balances they are weighing up and we can help by capturing data and turning that into information that can help decision making. Accuracy of inventory and of sales are absolutely key because if you don’t know what you’ve got, you can’t make decisions about what is moving and what you need to buy.”
He added that rising fuel costs had made optimised vehicle loading and routing even more crucial than before and that Epicor “is geared up to help, especially in this industry.”
Ian Oldrey, managing director at Ten-25, said that the fight to keep margins ahead of the constantly rising prices had led to an increase in demand for “more information at their fingertips”.
“Information needs to be quicker and easier to access,” he said. “Merchants need to be able to track costs as accurately as possible because they are shifting. Whereas, in the past, they may have confidently known some products were so much a cubic metre, that may not be the case now and many loads may have been brought in with very different costs.”
He said that one of the latest developments within Ten-25’s Merchanter software that had helped customers with their buying decisions was the facility to report stock and usage by length.
“It helps merchants determine what their customers are buying, what they are taking to the mill, what they are using to sell direct to customers and what they need to be buying,” said Mr Oldrey. “It’s not just about sales activity, but also about usage activity.”
Last year’s upgrade to Merchanter added considerably more timber functionality on both the merchanting and the processing side.
“We have quite significantly beefed up how timber certification can be recorded within the system,” said Mr Oldrey. “If businesses want to go to this level of detail they can see what certification schemes mills are working with, check whether the certificates are valid and record that in their own system so they can track certification on a supplier-by- supplier basis. They can allocate source country and even record things like product categorisation for each of the certification bodies, so they can do their reporting by the PEFC and FSC product categorisations as well as on a product-by-product and transaction-by- transaction basis.”
Another new feature is the ability to summarise the contents of a mixed pack.
“So, where you have a whole series of packs that have different lengths within them, it summarises them into, for example, half a pack of 4.2s or 3.6s and this means that sales quantities can quickly be identified,” said Mr Oldrey.
On the milling side, the software now has the ability to follow a pack from when it comes in as raw material, through the milling or treatment process, creating a “mirror pack”.
“It retains not only its pack identity as it converts from one product to another, but it also keeps its full history. Even though it’s been converted from one product to another, from a system point of view you don’t lose that traceability.”
Mr Oldrey added that Stock Confidence, a stock holding rating system that Ten-25 introduced last year, had garnered good feedback.
“The big thing that it is delivering is that it’s driving businesses from needing to do full stock takes into being able to do ad hoc stock checks and move more to a perpetual inventory,” he said.
KCS launched more new products in 2020 than in any previous year and says that “unsurprisingly” it slowed a little in 2021. However, said Mr Mitchell, there are plenty of digital solutions from KCS, which the market is rapidly consuming, and it is continuing to bring more digital processes and tools to its customers and prospects.
“When the pandemic struck our goal was to quickly introduce products that could really help our customers as they struggled to deal with the effects of lockdown and the strange trading conditions that we all found ourselves in,” said Mr Mitchell. “Our teams worked tirelessly to bring forward innovations that we already had in the pipeline and to introduce them as quickly as possible. Over the course of the year, our focus was on working with our customers to implement these solutions whilst still looking to design new innovations that could help them through the challenges.”
He added that KCS will shortly introduce a new range of apps to improve efficiencies in busy warehouses, so that its customers can manage the entire warehouse process to ensure fast delivery.
The new warehouse solution is currently being piloted by one of its early adopters, with KCS fine tuning it before wider launch.
“We will also deliver an integrated PIM (product information management) solution for customers who are part of industry buying groups, providing instant access to rich product content within both the back office as well as online,” said Mr Mitchell. “This is very similar to the manufacturer catalogue content that is already core to our automotive solutions.”
It doesn’t stop there, however. “We will shortly broaden our EFT (electronic funds transfer) offering, introducing further partners that will offer our customers choice when choosing the PCI (payment card industry) compliant payment solutions they wish to deploy at the counter, in the back office and on the internet.
“We will also introduce further approval workflow into our EasyAP solution, which is an engine that uses AI (artificial intelligence) to decipher the supplier invoice received via email, or scanned, and electronically load it onto K8 where it is automatically matched to a corresponding purchase order and stored.”
One of the major developments over the last few years in the software world has been the acceptance of and migration to a cloud-based solution and the gradual decline in use of the in-house server.
“I would say more than 90% of our new business is cloud now, up from 20-30% five years ago,” said Mark Hughes at Epicor. “We now have more than 25,000 customers using our cloud solutions and timber contributed to that.”
“Remote working, the need to improve cybersecurity, the proliferation of mobile devices in everyday working life and the ease with which software upgrades can be automatically rolled out to customers have all added to the momentum to adopt cloud-based technology,” said Mr Hughes. “And the cloud migration curve will continue to grow as compliance and sustainability initiatives become important business criteria.”
Epicor customers have plenty to look forward to in the coming months, including a new design philosophy across all its products – including Epicor BisTrack. Last year Epicor announced it would be sharing the full BisTrack functionality through a web browser (TTJ July/August 2021) and it is now going a step further from focusing on everything being deliverable via the web.
“We are now focusing on everything being deliverable via our new user experience,” said Mr Hughes. “The Epicor user experience is all about making it fresh, modern, and more intuitive,” he said, adding that features such as voice activation and voice assistance are now coming into play.
Another new development that Mr Hughes predicts is going to make a real difference over the next few months is Automation Studio.
“Epicor Automation Studio (powered by Workato) operates 100% in the cloud and is effectively an integration tool that allows you to connect with pretty much any other software platform out there with little to no IT coding needed. It has hundreds of thousands of options (called recipes) like a library. Giving you back the control through a self-serve platform. So, for example, sales people can benefit from producing an order in Epicor from an opportunity in Salesforce.com, HR can upload workforce data from Epicor to ADP, or it can be connected to an electronic components database, or to access timber pricing or exchange rate tables. These recipes are already written, removing valuable hours spent logging or processing data.
“It’s always been possible to integrate Epicor BisTrack with other products, but this is going to massively simplify it,” said Mr Hughes, adding that “the first pass” for BisTrack would be later this year, with full integration next year.
He also highlighted integration with Epicor CPQ, the company’s configure price quote tool, which he thinks will be “a game-changer” for those merchants that also have a timber building manufacturing element.
Epicor CPQ is a visualisation tool and is used by companies such as Tuff Shed. The software allows not only the configuration of the product, but the user can also “visualise” it as well as generate cutting lists, materials lists and invoices.
Other new offerings being added to the Epicor mix are the result of recent acquisitions: Grow Inc was acquired in March this year, while Data Interchange came into the fold in June.
Grow is described as “a no-code, full-stack BI (business intelligence) platform that enables any user – from the boardroom to the plant floor, warehouse, or store – to make data-driven decisions with easy-to-build, easy-to-use dashboards, and interactive visualisations” and, said Mr Hughes, will come to BisTrack within the next year.
Data Interchange, meanwhile, is a UK-based provider of EDI (electronic data interchange) cloud technologies and managed services. The acquisition “expands the reach of Epicor in European markets and adds to its portfolio of B2B integration technologies, empowering customers to connect businesses and trading partners, increase efficiency and drive value in the supply chain”.
The Epicor software portfolio reaches across many different industry sectors and while each has its own industry-specific software – BisTrack for timber and builders merchants, for example – it is also working to ensure those systems can work together seamlessly. This will be a bonus for multiple portfolio business, such as those under the umbrella of private equity or venture capitalist ownership.
“’Distrofacturing’ – the combination of manufacturing and distribution services, has become an important pivot as businesses are becoming more vertical in their supply chain strategies,” said Mr Hughes. “A big push for us over the next 12-24 months will be for companies to be able to run manufacturing, distribution, and building supply processes within a single Epicor environment with each of the different platforms running seamlessly between each other with the benefits of their own industry-specific functionality.”
Integration is certainly the name of the game and software manufacturers are all working to establish connections for their clients with third party providers.
“There is a lot of scope for further digital transformation,” said Ian Oldrey. “We’re noticing a lot of potential new sales channels opening up for merchants, such as the online market place SNAP-IT, which is on-demand deliveries for tradespeople – a sort of Deliveroo for building materials – and Plane & Simple.
“As well as having your own website there are a lot of potential routes to market for the trade and consumers. They don’t have to be in-house systems; they can be working with these other channels.”
A couple of years ago, Ten-25 established links with eCommonSense, a business with a merchant specific webshop. This is now being used by a number of Ten-25’s customers and is working well for them, said Mr Oldrey.
“We are also just completing a direct connection with WooCommerce and that will be a direct connection from Merchanter, not through an integration tool. It’s already working direct on eBay and our direct connections with Amazon and Shopify are coming on well.”
KCS has also continued to grow its third party relationships, such as those with data analytics partner, Phocas, and credit card provider, Dojo.
“Phocas and Dojo solutions have been adopted widely amongst our customer base and the rate of adoption is increasing,” said James Mitchell. “Having formal partnership agreements in place with these vendors gives our customers comfort that these are sustainable solutions that they can rely on and that we will develop our products with these partnerships as a key principle.
“We want to make sure that our customers can adopt these best-of-breed solutions to complement the great innovations that we provide and really leverage the power of our technologies.”
As for the future, software providers share the view that there are uncertain times ahead, with the rising cost of living and supply challenges hanging over and possibly threatening the underlying demand for housing, which underpins so much of the timber industry.
“However, uncertainty always brings opportunity,” said Mark Hughes. “The way to survive is to be agile and adapt quickly to smarter solutions, whether it’s to make it easier for customers to transact with you through ecommerce or to set up a trade account with you so you can pick up business more quickly, be one step ahead and truly give your customers what they want.”
