Data Trail

At The Speed of Commerce

The following article appeared in Recycling Today.  www.recyclingtoday.com.

Data Trail

Data. Scrap metal recyclers have plenty of it to track during a typical business day, from inventories to freight charges and even rolling stock. The data trail starts at the scale house with incoming scrap material and grows in complexity as the material travels through the yard for processing and then into outgoing trucks and gondola cars for delivery to various end users. If all goes well, the information is distilled into various tidy reports that managers find useful.

Computer software can help recyclers manage this diversity of information accurately and easily, allowing a single entry at the scale house to filter through the software’s various components and into the reports recyclers count on to manage their businesses successfully.

WISH LIST. It’s this type of point-of-scale-entry system that recyclers find beneficial. George Kane of 21st Century Programming, Long Beach, Calif., says recyclers are interested in transporting all of the information associated with a scale weight in one entry step, eliminating data entry redundancies and reducing the possibility for error.

"It cuts down on your overhead, and it provides data that is not available in a rapid view when you have to do things manually," Kane adds.

Recyclers also are concerned with transaction speed. "One of the primary things that they are looking for is a rapid means to handle retail and/or industrial purchases," Joe Floam of ScrapWare Corp., Rockville, Md., says. "They want to be able to get that scale transaction done very quickly."

But speed means little without accuracy; therefore, recyclers also seek information on un-invoiced shipments and weight discrepancies from their software, Floam says.

All of this data can be delivered neatly using various reporting functions. John Underwood, president of Systems Alternatives International LLC (SAI), Maumee, Ohio, notes that recyclers demand a high degree of sophistication from these reports and their business systems.

"They want to see integrated freight through their shipment processes. If they are an exporter, they want to see multiple freight costs that can be prorated against multiple items on a shipload," Underwood says. Recyclers are also after sophisticated inventories that detail multiple-production layers and shrinkage, he adds.

For some recyclers, the Internet is growing increasingly popular as a means of interfacing with data and generating reports, because it allows management to access reports without having extensive knowledge of the business systems themselves, Underwood says.

The Internet also enables recyclers to communicate information to their trading partners. Using software from Holland, Ohio-based Shared Logic, a recycler’s trading partners can look at the status of their accounts, shipments and related data.

This same software also enables recyclers to capture documents produced by the system, storing them for future reference. "For example," Shared Logic’s Larry Smith says, "if you ship material to a customer, you are going to produce a bill of lading, a shipper and an invoice. You may want those three documents associated with the sales contract that you’re shipping against. Your customer might fax you a notification that they have received the shipment and weighed it. You may want to be able to scan that document into the system and have all of them associated together so you can look them up at some time in the future."

In addition to tracking crucial business transactions, recyclers also appreciate flexibility in their software.

Greg Williams of Williams Software, Los Angeles, is also president of Williams Recycling, a scrap yard in south central Los Angeles. Williams says he designed his software with the "anytime, anywhere, anything" philosophy, giving him and the other Williams Software users the ability to manage their businesses while away from their yards.

"The software is built for me. I don’t want to be tied to a seat," Williams says. "If I am away from the yard and I want to listen to or see our facility, I can come up on one of 20 different cameras and see any part of our facility," he says. "I can come up on any transaction and see exactly what they purchased, when they purchased it and how they purchased it." Williams Software also incorporates picture-recognition software, capturing the image of every driver who rolls across the scale.

Software, with its practicality and versatility, appeals to large and small scrap yards alike. Although they track the same essential business data, the systems grow more complex in direct relation to the company’s size.

SYSTEM SCALE. "It’s important to know if you are making money on the items that you’re buying or selling," Smith says.

Although small companies buy software with the intention of managing their scale purchasing and shipping functions, Smith says, "they still take advantage of the fact that our software has all of that inventory tracking capability, and they use it."

"I think it makes sense for everybody to track their inventory," Underwood says. "With the fluctuation in this industry, you have to know what you have, what the value is and what you’re paying for it."

Kane says small companies might derive more benefits from knowing their inventories than large companies, "because the smaller company doesn’t have as much money to utilize."

Floam also says software that addresses inventory, accounting and loss prevention may actually be more important for the small yard. "A loss—inventory loss, internal theft, external theft—can have a disproportionate affect at a smaller company than it would a larger company that is moving more volume," he says.

Williams stresses the advantage of knowing a business’s cash position. "The bottom line is where the money is," he says. "Any point of the day, you should know your cash position; part of that is what you have in inventory."

Mike Recalis of Mayer Information Technologies, Markham, Ontario, Canada, says inventory-tracking software is a worthwhile investment for smaller yards, though they might be put off by the cost initially. "Managing your inventory, scale receiving and shipment, peddler trade, invoicing and accounting are requirements of a daily operation in today’s competitive market."

Regardless of size, scrap recyclers perform the same fundamental functions and rely on the same critical information in order to successfully manage their businesses.

The trend among multiple-location companies is to centralize incoming data at one location, the software manufacturers note.

DATA MERGE. "More and more multiple-location companies are requiring their data to be transferred back to the central location in real or near real time," Jackie Barlow of Paradigm Software, Timonium, Md., says. "In addition, they are looking for the system to be able to operate seamlessly in case of an interruption in the connection between the remote sites and the central location."

Paradigm’s software allows the remote sites to run independently of the central location, automatically updating the central location when a connection is available. "If the connection is not available, the remote location continues to process transactions," Barlow says.

Companies also have different reporting requirements based on their coporate structures, Floam says. "A product like ScrapWare has the ability to look at the performance of each individual yard or unit, as well as put it together in aggregate."

Multiple-location companies’ technical needs vary from those of single-location companies. "Whether it is a single-location or a multi-location company, there is a common need to maintain accurate and up-to-date inventories, supplier performance, common coding standards for grading, account setup, invoicing, etc.," Recalis says. "This is achieved by centralizing or consolidating this information from a corporate level to and from each multi-location. The key here is that there is a technical architecture that can support this business requirement."

Mayer provides this architecture through Mayer Polling Manager, which takes information from the localized databases, replicates it and removes it to the corporate database.

INTERNET ENABLED. While the Internet is a popular tool that recyclers and their customers use to interface with data, recyclers are still warming to the idea of Web-based software.

Web-based software typically functions as a subscription service. Data is housed with the software provider, not on the scrap recyclers’ in-house servers.

"What we have seen out in the industry is that the Web-based applications are great for the very large players in the industry," Floam says. "The smaller to medium-sized companies don’t have the IT infrastructure to manage something like that."

Barlow says traditional software remains popular "because it utilizes a richer user interface and data redundancy without having to rely on a consistent Internet connection for daily operation."

"I believe that traditional software will serve the scrap business for some time," Mayer’s Recalis says. "It is not because it is the best, but rather the adoption rate of Web-based software is much slower in the scrap industry compared to other industry sectors."

Recalis says the Web will become more predominant, however, for reporting, contact and account management and e-commerce, such as contract delivery statuses, billing information, shipment documents and advance shipping notices.

Underwood says the Web complements traditional business systems, but traditional software prevails.

Smith finds that recyclers are reluctant to house their data at remote locations. "Customers have decided they already have their own computers and networks, they may as well control their own systems at their own locations."

However, Williams is confident when it comes to the Internet. "Essentially, if you’re not thinking Internet, you’re thinking incorrectly," he says.

While the role of the Internet-based software is debatable, the mutable nature of software is constant. It promises to continue adapting to recyclers’ needs, further refining reporting functionality and streamlining data entry.

The author is assistant editor of Recycling Today and can be contacted via e-mail at dtoto@RecyclingToday.com.