Philadelphia Reserve Supply Company (PRSCO) was founded in 1930 by local building material dealers who wanted to form their own wholesale distribution center. The purpose of this new entity was to collectively pool its member’s purchasing power to buy materials at the lowest available prices. Furthermore, all net profits of this entity would be rebated back to each owner in the form of patronage dividend. Today, PRSCO is recognized as one of the most successful regional cooperatives in the nation with over 100 stockholder dealers consisting of over 175 locations.
PRSCO is headquartered in Croydon, Pennsylvania where it serves independent lumber and building material dealers throughout the Mid-Atlantic region. PRSCO functions as a wholesale distributor, providing warehousing and delivery services to its customers. PRSCO’s stock inventory features drywall, insulation, roofing, treated lumber, plywood, lumber, sheathings and other commodity-type products that are widely used in the new construction or remodeling industries.
PRSCO maintains a 65,000 square foot central warehouse for pickup and delivery service to all its customers. PRSCO also facilitates direct order shipments from various manufacturers to its customers in railcar, truckload or skid lots, just like other buying groups. PRSCO also sells material to non-stockholding, independent lumber and building material dealers on request.
PRSCO provides purchasing power and marketing services to assist its members in competing and surviving against the mass merchandisers. The organization seeks to make an important contribution to its owners’ success through its purchasing, sales, marketing, service and financial activities and indirectly through its product knowledge, professionalism and relationships.
Since 2007, PRSCO has implemented a successful Stocking Dealer Program where its members can purchase stock inventory from PRSCO’s warehouse at the same direct price they would pay if the dealer had bought direct from the manufacturer. “Our members can buy one skid of material from PRSCO at the same direct price they would pay if they were buying from the manufacturer by the truck or railcar,” said John Grasso, assistant controller. “We can break down packages and ship smaller quantities to our customers from our local warehouse faster than if the customer ordered direct. The program works because when we buy more from our vendors, our invoice rebates grow; which in turn allows us to offer more attractive pricing to our members. And, our customers are able to streamline their payables and purchasing departments because there’s only one entity to pay: PRSCO,” he continued.
Non-members can order from the warehouse as well, but in this scenario PRSCO will markup the price to more accurately reflect its actual material handling and overhead costs. The money PRSCO earns is taken out of its operating costs. “Most of our margins are a result of earning back-end rebates, and when there’s money left over at the end of the year we pay dividends back to our members,” explained John.
PRSCO has been led for many years by its president, Frank Dalinsky. In October, 2011 long-time PRSCO board member Kim Coleman assumed the role of general manager and chief operating officer. Kim will lead the organization when Frank retires in 2012. "Throughout his career, Kim has had great rapport with the industry's manufacturers and vendors, dealers, and contractors," said Frank. "The strength of these relationships will enable him to lead PRSCO and continue its success in the future."
PRSCO Selects Infor10 Distribution Express (FACTS) and E&A
Prior to 1998, PRSCO had relied on a custom-written software application to manage the business. As the year 2000 approached, PRSCO recognized its systems would not be compliant. Chas Gormley, controller was asked to search for a new enterprise solution.
“When we looked at systems, we looked for the best fit for the distribution portion of our business,” recalled Chas. “Infor10 Distribution Express (FACTS) by Infor was the best solution we found.”
FACTS is a proven distribution based software package that enables customers to streamline processes and maximize resources. With a track record that is unparalleled in the industry, FACTS allows distributors to enhance customer service, optimize inventory levels, increase productivity and improve profitability.
PRSCO installed FACTS in 1998 with assistance from John Genter Associates (JGA) of Downingtown, Pennsylvania who served as the local Infor representative in the Philadelphia area. JGA configured FACTS to run on a UNIX server supporting 20 computer end users. The project included customizations to facilitate the direct order side of the business, where PRSCO handles paperwork for its customers but does not take actual ownership of inventory. JGA also relocated the computer system when PRSCO completed construction of its new office building in 2007.
Shortly after PRSCO had settled into its new space, Chas and John Grasso decided the time had come to significantly upgrade the information system. Specifically, PRSCO was interested in migrating FACTS from UNIX to Windows; upgrading FACTS to the current version; and implementing strategic third-party applications that might help the company gain efficiencies. With this ambitious agenda in mind, Chas and John approached JGA who in turn recommended that PRSCO contact Earnest & Associates (E&A) in Baltimore, Maryland. JGA felt that E&A could bring relevant expertise to the project.
PRSCO contacted E&A’s Mike Manning who subsequently met onsite with Chas and John to discuss how E&A might support PRSCO’s information systems. Believing that E&A had the specific technical expertise they were seeking, PRSCO immediately signed an agreement with E&A for professional services including access to the FACTS Help Desk, UNIX operating systems support, and computer programming services.
As an added benefit of being an E&A client, PRSCO gained access to E&A’s user group series which currently meets in eight cities across the country. In the spring of 2008, Chas attended the user group in Williamsburg, Virginia and John participated in the event held in Baltimore, Maryland. Chas and John intended to meet with technical experts from E&A and Infor in person, network with fellow FACTS end users, and learn more about FACTS and related technologies. PRSCO came away from the meetings satisfied that they had made the right decision to partner with E&A.
“We wanted to see what E&A was all about,” admitted Chas. “We recognized that E&A had the resources we needed to support our FACTS system and impressed that E&A was in direct contact with the developer. It seemed that E&A could help us grow our business with technology.”
The user groups energized PRSCO with new ideas on how to get more from their FACTS system investment. At both the Williamsburg and Baltimore events, E&A’s Bill Briggs had demonstrated UnForm Document Archiving & Management (DAM) a document management system that has been fully integrated within and without FACTS. Simply put, UnForm DAM allows end users to capture, store and retrieve their paper-based and electronic documents through a single interface. UnForm DAM resonated with PRSCO for the reason that its employees are challenged with sifting through and matching up the many thousands of paper-only direct orders that its members place with PRSCO-approved manufacturers each year.
“We really are interested in getting document management,” affirmed John. “Our vision is to decrease paper by getting digitized. We want to deliver information and documents to our customers electronically via email or fax.” John estimates the manual processes that will get eliminated using UnForm DAM could save PRSCO as much as two to three hours of labor per day. “We can put those hours to more useful purposes than simply alphabetizing documents," John emphasized.
E&A Helps PRSCO Upgrade its System
In 2009, John started planning for the upgrade to FACTS 7.7 which featured full Windows feature/functionality and integration with UnForm DAM. E&A’s Jim Thomas served as the primary consulting and technical support contact to PRSCO on the project.
E&A began by providing specs for the Windows server to PRSCO’s local network support company. Jim used the new machine to setup a test system for FACTS 7.7 in PRSCO’s training room. Jim stayed onsite for several days of testing and training. “Jim was really good about going around and showing everyone the basics,” recalled John. “He sat down with everyone!”
PRSCO employees, who were accustomed to using FACTS 7.5 in character mode, learned how the improved graphical display in 7.7 made FACTS easier to use. “Before, nearly everyone had defaulted to the character display in 7.5 because that’s how our people had been accustomed to using the software,” explained John. “But the problem with character is that if you get stuck somewhere, it’s not always clear how to get out. Whereas in a Windows environment, navigation within the system is more obvious. There might be a red ‘X’ to help you exit the program or an arrow to go back to the previous screen. It’s more intuitive,” said John.
FACTS 7.7 went live in October, 2010. Jim was onsite for two days to make sure everything went smoothly. The months spent preparing for the event paid off. With the small number of technical issues resolved the first day, the second day was dedicated to wrap-up and additional end user training. PRSCO has used FACTS successfully ever since.
With the upgrade complete, John was glad to see the UNIX server retired. Previously, John had been concerned about his ability to communicate with PRSCO’s technology services providers in the event of an emergency. “With UNIX, I couldn’t see what was going on at all,” said John. “There’s no GUI interface! I couldn’t tell what the UNIX prompts or code lines meant; it was all Greek to me.”
The Windows server now empowers John to provide more competent first-line technical support for PRSCO, helping save on support fees. “I can open up the server and see if something’s wrong. It’s more obvious!,” exclaimed John. “If FACTS isn’t running I’ll look at the server first. If there’s anything glaring or obvious that I can see, I can report it right away.” The quality of PRSCO’s interactions with third-party vendors has been vastly improved as a consequence of the Windows interface. “It’s been much easier for me to explain a situation while I’m on the phone with our technical support people,” said John. “I can make sure the system is connected to the Internet and possibly make a pre-diagnosis. The interaction goes a whole lot faster when I’m communicating with the network guy.”
Since the go-live, E&A’s support services have proven useful to PRSCO. “The FACTS Help Desk is very beneficial,” said John. “Having people available at E&A to answer the phone who are competent enough to figure out what’s going on is great. If our issue is not resolved immediately then E&A will escalate the call to someone who will make sure we’re taken care of.” John added that PRSCO values E&A as a resource to help them do more with FACTS. “When our people are unsure about how to do something, I often recommend that they call the Help Desk. E&A is like an education tool for our end users,” he asserted.
FACTS Benefits PRSCO
Chas believes PRSCO has made good decisions about its enterprise software. “FACTS has proven to be a nice fit,” commented Chas. “FACTS handles everything for us from sales orders to purchasing, inventory and accounting.” The integrated solution provides PRSCO with a 360-degree view of its operations, allowing the organization to provide outstanding service to its customers.
Chas told us what he likes about FACTS sales orders. “We can enter all of the pertinent customer information about what our customers are buying including description, pricing, our cost, shipping routes and so on,” said Chas. “Our salespeople have the pricing information available to them at the time they take the order. We have the convenience of seeing what’s on hand, what’s available, if items are on backorder or if there is more material on the way.”
The FACTS purchasing system has proven to be beneficial. PRSCO uses FACTS to take advantage of available manufacturer discounts, a critical feature when one considers the very large amount of materials PRSCO purchases. “Suggested Purchase Orders has been a nice feature,” said Chas. “We can view reordering reports that show us precisely when the time is right to place an order; for example, when we have reached a buying target with a specific supplier.” PRSCO has also setup movement classes to better support its buying decisions, making sure that the warehouse has stocked up just in time to meet peak demand. “FACTS recalculates turns on a monthly basis. We use the information to break our inventory out into different classes with one being the most turns, thirteen the fewest turns or dead stock, and everything else in between. We analyze the data to make decisions about what we want to stock going forward,” said Chas.
Importantly, the information provided by FACTS has empowered PRSCO to negotiate the best possible deals with manufacturers and save money. “We have over 500 suppliers but a core group of 80 to 100 suppliers comprise 80% of our business volume,” said Chas. “Using historical data from FACTS, we can talk to our vendors from a position of strength. We can say, ‘We’re moving a lot of your inventory. Let’s talk about how you can support us through a new incentive program or by offering us additional rebates’. With FACTS, we have a tool we can use to gain leverage with our suppliers,” continued Chas.
E&A Customizes FACTS to PRSCO’s Requirements
E&A has written several modifications to suit PRSCO’s unique business model. Jim modified FACTS so that PRSCO can process paper-only orders without touching parts of the system that might otherwise skew the FACTS purchasing system or cause extra work in data entry. “When a piece of paper comes in with the vendor’s invoice indicating ‘bill to PRSCO’, we’ll go to the FACTS direct invoice entry screen to enter the order,” said John. “When we’re ready to print, a screen opens where we can enter the vendor information – name, dollar amount, account, due date and so on. The modification bypasses our purchase order system and creates an accounts payable. It’s a huge savings for us because it’s automated and there’s no double entry of data!”
With rebates providing PRSCO with most of its operating margin, it is crucial that claims are submitted accurately and on time. To that end, Jim wrote a modification that links direct invoices to vendors and showed PRSCO how to access this data using the FACTS 7.7 custom reporting tool. “We can run a report where we can see all of the vendors that our customers might have purchased from,” said John. “We can drill all the way down to the vendor’s invoice number and the FACTS invoice number. And we can do it vice versa.” PRSCO sorts the data in Excel in order to determine the exact amount it can claim in rebates from each supplier. “It’s been really helpful!” enthused John.
Other modifications have helped PRSCO improve its management of inventory. Jim created a field in FACTS to enter the four-digit numbers PRSCO uses to tag its stock inventory to allow for better inventory auditing and reporting. Jim also formatted the shelf label to include the warehouse location; thereby improving worker efficiency. “We can export the relevant information from FACTS to Excel and make sure that every tag has been accounted for,” said John. “If we find a discrepancy, we know exactly what to do. We can go to zone AA, AB and so on; make our counts; and adjust our inventory numbers very quickly. It’s been a huge help for us,” John concluded.
PRSCO has developed a good working relationship with E&A. John especially values Jim’s knowledge of FACTS and the insight he has gained through supporting PRSCO’s system. “Jim Thomas has been great,” said John. “We can contact Jim whenever we have an idea for a modification and to discuss whether he thinks it’s plausible or not. If we have a really urgent day-to-day issue we’ll often go to Jim since he’s done a lot of the programming for us and copied a lot of the modifications we had from 7.5 to 7.7. Jim has also implemented some new programs for us, so he’s knowledgeable about our system right away.”
PRSCO Implements UnForm DAM
Since 2009, John Grasso had been mulling over how UnForm DAM might streamline PRSCO’s paper-intensive direct order process. John had developed a flowchart that proposed how the handling of paper documents might become more efficient by introducing UnForm DAM into the process. Later in 2011, John attended an E&A user group in Edison, NJ where he met with a fellow FACTS user who highly recommended E&A’s work on its own document imaging system. With this encouragement, PRSCO decided the time had come to activate the UnForm DAM project.
To get things started, PRSCO’s accounting staff met with E&A’s Craig Fromm remotely via Webex to view a demonstration of UnForm DAM within the context of John’s proposal. An agreement was signed with E&A in September, 2011 to move forward with the project.
PRSCO’s challenge is to sort through the thousands of invoices that arrive via email, fax or mail. PRSCO needs to sort these documents alphabetically in order to match up the vendor invoices with the customer invoices generated in FACTS, a labor-intensive process that consumes hours every day. PRSCO intends to improve the process by scanning the vendor invoices using UnForm DAM. Using dual monitors, users will be able to digitally cross reference and match the documents. John explained the process. “Our vision is to have UnForm DAM on one screen and FACTS on the other,” said John. “We can have the digitized vendor invoice here and the FACTS direct billing over there. We can bill the customer right from the screen and have the two documents associate with each other. FACTS can provide the linkage. This will enable us to eliminate the sorting process. At the end of the day, all that we will have to do is pull up the invoices in UnForm DAM, check the ones that we want to send, and then send them to each customer per their preferred method of delivery.”
E&A began work on the project. Several other pieces of software were necessary to support the UnForm DAM system. E&A installed the FACTS Email and VSI-Fax modules so that PRSCO can choose to either print, email or fax documents to customers directly from the system. Meanwhile, Craig began customizing the UnForm DAM software to meet PRSCO’s requirements.
At the time of writing, the majority of the UnForm DAM system has been installed. Vendor invoices have been successfully scanned and archived. The next step will be to associate the invoices with the FACTS billing system so that the process can be completely automated, end-to-end.
“UnForm DAM is already saving us a lot of time with our direct billing,” said John. “E&A is configuring a solution that is unique to us and how we do things.”
PRSCO Looks Ahead
Although the construction industry has taken a big hit in the Great Recession, PRSCO has managed to weather the storm. PRSCO’s smart use of technology has enabled the company to do more with less. PRSCO continues to improve upon its core strengths in purchasing and customer service, making the company more relevant than ever to its members’ survival and promising a great future ahead.
E&A is actively engaged with PRSCO on several projects. In addition to working towards the completion of the UnForm DAM installation, E&A is currently installing and configuring the FACTS Document Delivery module which will be used to send acknowledgements automatically to PRSCO customers when pick tickets have been issued in the warehouse.
In the future, Chas thinks PRSCO might take a look at bar coding to improve the accuracy of its physical inventory and implement cycle counting. Recognizing the limitations of backing up PRSCO’s important FACTS data on external drives, John believes that E&A Managed Services might provide a solution. Data could be stored securely in the Internet ‘cloud’ and made available for recovery anytime or whenever an unexpected event occurs. “We have a rotation going where we take one backup offsite every night,” said John. “We’re not quite in the cloud yet but it’s going to be our next step.”
In July, 2011 it was announced that JGA would combine its resources with E&A. The deal formalized what had previously been a professional relationship based on mutual respect and cooperation for over thirty years. Dozens of companies like PRSCO would enjoy greater continuity and level of support for their FACTS systems as a result of the merger.
John commented on the benefits of working with E&A. “We can’t hire someone with the kind of technical skills we can get by partnering with E&A,” said John. “To have a resource like E&A accessible to us has been great. We now have a partner to help us game plan how we might improve our processes and save labor. We couldn’t do that before.”
To learn more about PRSCO, go to www.prsco.org.