Hugh M Cunningham Inc

For over six decades, Hugh M. Cunningham, Inc. (HMC) of Dallas, Texas has been the leading manufacturer’s representative of first-quality commercial, industrial and residential plumbing and mechanical supplies in the Southwestern United States. Led by its president, David A. Cunningham, HMC is committed to providing exceptional customer service while championing the preeminent manufacturers in the industry. 

HMC employs over one hundred people who are focused on the marketing, sales and support of its manufacturer partners' products to their wholesale/distribution customers and the construction trades they serve.  Currently, HMC services the states of Texas, Oklahoma, New Mexico, Arkansas and Louisiana where HMC has established itself as a preeminent partner in the supply chain.

“We fill the gap between the manufacturer and the distributor,” said Dan Townsend, COO and vice president at HMC.  “Manufacturers hire us to be their specialty sales arm.  With most of our manufacturers, we have 30-day contracts in place so we’re only as good as our last sale,” he emphasized.  To fulfill its sales mission, HMC employs over thirty outside sales people who have diversified construction market expertise including plumbing and mechanical, fire and water, flow control, HVAC and more.

At its core, HMC is a knowledge-based enterprise.  Continuous investment in employee training and career development is vital to enabling HMC to competently sell and support its manufacturer partner’s products.  To that end, HMC has organized eight inside sales and customer service teams who have built considerable competencies around the specific product lines HMC supports.  As innovation in the industry has accelerated, the demand for HMC’s services has shown no signs of slowing.

Dan explained how HMC has organized its resources to take advantage of the opportunity.  “We have divided our customer support reps into teams. The teams support groups of products that complement each other because no single person could properly service the needs of all of our manufacturers and diverse customer base,” said Dan.  “One team’s product may require a significant amount of order facilitations and pricing demands, while another team’s products rely on heavy technical knowledge and specifications. This structure allows HMC associates the opportunity to maximize their individual strengths as well as provide a channel for future personal growth.”

Lori Zimmer is the customer service manager.  “We believe the relationship is all important,” said Lori. “Anyone can sell a product, but how do you know that you are buying the right thing?  Our customers get solutions to their everyday challenges because each of our customer support teams is led by people with years of industry experience.  It is our job to know the products inside and out,” she said.

HMC has a 75,000 square foot distribution center that handles HMC’s lines and serves as a regional shipping facility for other rep agencies who sell for Charlotte Pipe & Foundry, Elkhart, Little Giant and other manufacturers in territories not covered by HMC.  Dan Banaszek, vice president of distribution is tasked with managing the operation.  “We are a service center,” said Dan.  “Customers like local, fast delivery.  They want to pick it up today or have it delivered tomorrow.  We do whatever it takes to get product to our customers and to make them happy.  That’s what we’re here for.”

HMC’s beloved, late founder Hugh M. Cunningham once asked his employees to “be passionate about your work and life, love what you do, those you work for and with, the products you represent and the profession in which you labor.”  With HMC’s solid leadership, highly skilled sales and support teams backed by an efficient distribution center serving thousands of satisfied customers every day, it should not be doubted that Hugh’s spirit remains alive and well today. 

HMC’s Growth Prompts a Technology Upgrade

In the 1990s and early 2000s, several independent rep agencies decided to join forces as the HMC story was becoming better known.  In a relatively short time, HMC absorbed dozens of individuals who would go on to introduce HMC into the fire and protection, turf, agriculture and water well businesses. With the subsequent surge in demand for HMC’s services, the company began to formulate plans for a significant software upgrade to support the company’s growth.

Debra Dingess, who has been HMC’s information technology manager for the past twelve years, recalled the moment.  “In 1999, HMC had around twenty employees,” recalled Debra.  “Not long after the Y2K upgrade we began to expand our staff significantly.  We soon realized that our legacy system could not keep pace with our growth and the increasingly complex technical requirements that came along with it.”  Debra cited a desire to migrate from the current character-driven UNIX system to a Microsoft Windows-based platform with a software that included robust reporting tools as important technical requirements for the new system; while functionally, the software would need to provide timely access to information in order to allow HMC’s teams of sales and customer service representatives as well as warehouse staff to do their work more effectively.

After carefully evaluating their options, the HMC management team selected Infor ERP TakeStock, a robust distribution management solution designed to help distributors of all types run more efficient, end-to-end operations.  Running on the latest Windows-based connectivity standards and featuring an intuitive, graphical user interface, TakeStock satisfied HMC’s technology needs while delivering the ease-of-use that its computer end users wanted and the information its trading partners and customers expected.

Meanwhile, envisioning that it would soon become the definitive manufacturer’s representative in the state of Texas, HMC sought to engage a single-source business consultant who could support and customize its TakeStock software system to meet the challenges ahead.  HMC invited Earnest & Associates (E&A), a leading Infor channel partner with over fifty active TakeStock installations supported nationwide, to the Dallas office to discuss its IT strategy.

Dan Townsend recalled the meeting.  “When Tom Cangelosi, Jennifer Jones and Terry Dixon arrived, we could plainly see that they had the technical background.  But what was really impressive was the feeling that the E&A team had integrity,” Dan recounted.  “We recognized that in a technical business, things are not always going to be perfect but it’s all about what happens at the end of the day.  Will we get our problems resolved?  Will you stand by us until we get there?  That’s what business relationships are all about.  After speaking with E&A that very first day, we walked out of the meeting saying, ‘We believe they will be our partner.’ And they have been ever since.”

Debra affirmed that the decision to work with E&A has been a good one.  “E&A had the support infrastructure we were looking for,” said Debra.  “We like to have access to an active user group community and online training.  We expect superior service because that’s what we provide to our own customers, and we feel that E&A has provided just that kind of service to us.”

E&A Customizes and Supports TakeStock

TakeStock promised to be an ideal software solution for HMC. TakeStock includes a suite of business management, financial management, supplier relationship management and supply chain management modules.  However, HMC’s unique, hybrid business model meant that E&A would need to configure TakeStock to support HMC’s manufacturer’s representative (buy/sell) and its distribution (consigned inventory) groups simultaneously. The challenge would be to engineer two sets of business processes inside TakeStock and to properly track, account and report on these processes accordingly.

Within TakeStock, the Manufacturer’s Representative module proved to be key.  E&A wrote a significant number of modifications around this module to allow HMC to separately track its buy/sell orders and consigned inventories.  E&A’s solution allows HMC to manage both its manufacturer’s representative and distribution businesses from within a single system.  Dan Townsend said, “On the one hand, Man Rep allows us to track the large volume of consigned products that flow through our warehouse facility without impacting our G/L.  On the other hand, we can also use TakeStock to facilitate buy/sell orders for our manufacturing partners and assess our performance at any given point in time using the integrated business tools,” he continued.

Dan talked about the modifications.  “The biggest challenge for us was handling product we didn’t own,” he said.  “An open order on consigned product can impact the credit check process in TakeStock. E&A has written modifications to make sure that consignments don’t impact any existing open buy/sell orders or A/R credit checks.”

All told, E&A’s modifications have succeeded in presenting a complete view of the business.  Gary Chinn is HMC’s finance and human resources manager.  Gary testified to the effectiveness of E&A’s solution in allowing him to separately measure both the individual and overall performances of HMC’s operations.  “TakeStock is a fully integrated solution,” said Gary.  “Whereas before it was very difficult to manage, today we use TakeStock’s G/L for everything we do from payables to receivables to financial report writer to tracking consigned inventory sales, and more.  We use E&A’s Pro Business Intelligence module to drill into TakeStock data to produce useful management reports.  For example, we can see how much consigned inventory has been sold by using the sales order history data captured by TakeStock.  We can even track sales commissions despite the fact that almost every manufacturer has a different payout structure and some might take many months to pay us based on open projects,” he said.

Support Services Prove Valuable

E&A’s support services including help desk, online training and local user groups have helped HMC get the most from TakeStock.  

Debra told us that E&A’s help desk support compares favorably with other vendors.  “Before, it might have taken days to get a response from our previous software reseller; meanwhile, important work that needed to get done was postponed.  It’s not like that with E&A,” said Debra.  “If I contact E&A’s TakeStock support line, I don’t dare leave my desk to get a cup of coffee because Keith Baynard or someone else at the help desk will be immediately trying to get in touch with me.  That’s how quickly I get a response!  And the solution to my problem is provided that much faster.  I think that E&A’s support is more than 150 percent better than the competition!” she exclaimed.

Online training services for TakeStock are delivered through E&A University where attendees can participate in interactive live classes or playback recorded sessions whenever it is most convenient for them.  HMC has used E&A University to learn about new features when upgrading TakeStock and to help employees improve their skills.  “We love E&A University!” declared Debra.  “We upgrade TakeStock every two years and it’s an absolutely seamless experience because we can learn what’s new through E&A University. We’ll use the projector in our classroom to setup a lunch-and-learn session whenever a live class that we want to take is scheduled.  It’s the perfect training tool for our inside sales people.  And when a new hire needs to get up to speed quickly, we can use the recorded sessions: the employee can watch the video, go through the basic steps and get the mechanics down; then we’ll progress to a live setting.”

Debra is a regular participant in the E&A user group series, a free service that E&A provides to customers who care to stay current on the latest developments pertaining to their Infor ERP solutions and related technologies.  Debra had most recently attended the Cleveland, Ohio meeting where Jennifer shared how to more effectively use the TakeStock sales order entry system.  Debra found the information useful.  “At the E&A user group, I wrote down a few of the tips that Jennifer had shared with the audience and brought them back to the office,” recalled Debra.  “Sure enough, most of our people didn’t know about these features in TakeStock. It goes to show you that if you don’t use it, you lose it!”

TakeStock Benefits HMC’s Buy/Sell Operation

As explained previously, HMC’s core mission is to facilitate good purchasing decisions by distributors on behalf of its manufacturer partners.  “We must add value,” stated Dan Townsend. “If our customers contact us and don’t get the information they need, they will go someplace else.”  To fulfill its mission, HMC connects with customers using video conferencing for remote training and a classroom facility for face-to-face training. HMC has a sophisticated call center monitoring system which tracks inbound call volume, hold time and more.  HMC’s sales representatives use laptops with CRM software to communicate with the Dallas office.  With a multitude of touch points, HMC has found that the TakeStock database has proven to be a solid platform for information sharing throughout the company. 

With TakeStock, sales and customer service representatives have access to powerful sales tools that include account statuses, past purchase histories, inventories and other pertinent information.  TakeStock helps HMC to work more effectively as a top-notch sales and services organization.  “Our upper-level teams possess very specialized knowledge and rely on the TakeStock database to provide them with information about the various manufacturers’ products that we represent,” said Dan.  “For example, Team Four supports pumping systems.  The people in that team might need to know how to engineer a flow control system to move grey water as part of a public utility system.  Using TakeStock, our team can help the customer identify the specific kinds of pumping stations, controls, meters, valves etc. that needs to be purchased to build out a complete system. TakeStock enables us to facilitate this process which typically requires a lot of discussion with the customer as well as multiple interactions with the manufacturer to complete the sale.”

Lori highlighted the necessity of the TakeStock database when sharing with us the challenge of staying current with an ever-changing regulatory and business environment.  “Urgency needs to be escalated at times,” said Lori.  “Last week, there was a code change in the city of Austin which forced us to immediately change our recommendations to customers.  Although it was a very simple change, it was important that our customers adjust.  We used TakeStock to provide the information our customers needed to adjust to the new specifications and continue to make good buying decisions.”

E&A’s Warehouse Management Solution Benefits HMC’s Distribution Group

In 2005, with HMC’s successful implementation of TakeStock behind them, the company began to investigate a solution for its warehouse operations.  HMC visited several other businesses that were successfully running TakeStock integrated with Accellos (Radio Beacon), an advanced warehouse management solution.  Satisfied that Accellos offered the functionality HMC needed to better manage its operation, HMC decided to work with E&A and Accellos on the project.   

“We had to get more efficient,” said Dan Townsend.  “We were losing a tremendous amount of labor hours dealing with a paper-based system. We knew the best way to attain profitability would be to improve our efficiencies by using bar coding and radio frequency technologies in the warehouse,” he concluded.

In 2006, Dan Banaszek led the implementation at HMC with onsite assistance from E&A’s Sam Neogi and representatives from Accellos.  Over the course of several weeks, HMC’s warehouse workers learned how to use hand-held units to scan bar codes to record the movement of inventory from receiving to counting, moving, picking, packing and shipping.  Employees gained insight into how Accellos software’s seamless interface with TakeStock would allow HMC to send order acknowledgements, automatic shipping notifications, carrier ship tracking and other vital information to its trading partners, thereby improving communications and boosting the level of service the company provides. 

With Accellos, HMC’s distribution group has in fact achieved world class status.  HMC handles an inventory valued at over $10 million yet processes hundreds of inbound and outbound orders every day with near-flawless accuracy.  With dozens of workers picking stock from over 43 manufacturers in 4,000 stocking locations in the warehouse, HMC has achieved on-time delivery rates of 98%+ (including 94% delivered the next day) and with order fulfillment accuracy approaching 100%. 

Dan Banaszek attributes the improved performance to the rich trove of information supplied by the TakeStock/Accellos system.  Dan shared how HMC uses the software to better manage overstock, reassign workers to more specialized tasks, run weekly replenishment reports, measure the average time customers spend at will-call, and all but eliminate discrepancies (to cite just a few).  “In our line of work, discrepancies are a big issue,” said Dan.  “The customer might say, ‘We asked for ten but you only shipped us five’. In the old days, you had to take the customer’s word for it because you had no way to verify the information.  Now, we no longer have to search through spreadsheets to get the answer because it’s all in the system.  In less than five minutes we can locate the problem and correct what would have previously taken a day for us to resolve,” he said.

A few of E&A’s enhancements to TakeStock have helped improve HMC’s warehouse system.  For example, E&A’s Pro ShipLink module feeds freight costs automatically into sales orders during the confirmation process, avoiding costly errors associated with over- or undercharges.  E&A also wrote a modification to round up items that are sold by the box, thereby ensuring that the right amount of product is shipped to the customer every time.

The system has exceeded HMC’s expectations.  “We believed that we would get a 100% return on our investment within twelve months so we planned for eighteen; but we actually achieved full payback in only nine months,” marveled Dan Townsend.  “We have conservatively calculated that our workers are at least 20% more efficient using the system than before.”

Yet, HMC is currently planning to do even more.  At the time of writing, Dan Banaszek was in process of reconfiguring the warehouse based on an analysis of Accellos’ most recent picker productivity reports.  “The aisles are laid out by manufacturer,” explained Dan. “We put the ‘A’ or fast-moving items towards the front of the building or on the lowest shelf rack, ‘B’ items on the next shelf, and so on with the slowest movers on the top shelf.  Using the reports from Accellos to guide us, we’ll be super efficient after the new layout is fully implemented!” he asserted.

HMC is the Rep of the Year

When employees in an organization like HMC are empowered by their company leadership to achieve their goals and are provided with access to advanced information systems technologies, many positive things are bound to happen.  HMC was selected by Supply House Times as its Rep of the Year in 2008. The honor validated many years of achievement for which the company can be justifiably proud. 

E&A hopes to continue to support HMC for many years to come.  Dan Townsend commented on the partnership that has developed between HMC and E&A.  “Business has to be a partnership or else it’s a waste of time,” said Dan.  “There was nothing that E&A said to us that they couldn’t do.  E&A has delivered on every single thing we have needed, and more so.” 

To learn more about HMC, go to www.hughcunningham.com.