In part 1 of this series, we presented a viewpoint we’ve had for many years of living in the dealer channel that ordering from design software would never help the cabinet industry communicate electronically and it certainly wouldn’t drive costs out of the process.
The major take away from this series is that the whole concept is bassackwards and wouldn’t really solve anything for a cabinet dealer or cabinet manufacturer. In fact, it has been such a failure for so many years that many cabinet manufacturers are now building their own software in the hopes of getting dealers to type in their orders for them. Of course this presents many of the same problems (and more) for dealers, but we’ll cover that in another article.
So starting with the end result: utter and complete failure to make ordering kitchens electronically through design software a workable solution in any form for dealers and manufacturers, let’s take a look at the top 17 reasons why dealers think this is ridiculous.
Of course there are more, but these will get you thinking:
- Negatively impacts cash flow. Inventory can eat you alive in this business. And being short just one piece of molding can be the difference between an extra trip to the jobsite or not. Ordering electronically from design would encourage early ordering, tying up significant cash flow which would leave you crunched for available capital.
- No audit trails. Who submitted the order? Who changed it last? Ordering electronically from design software would ensure your environment has a complete lack of accountability. You’d have to be prepared for countless hours of research, finger pointing and no real way to determine what exactly went wrong on the job.
- Lack of purchasing fundamentals. Purchasing systems exist for a reason. And the purchase order is an important document not only as a contract with your vendor, but for internal record keeping too. Ordering electronically from design would force you to give up purchasing discipline that would scare the life out of any back office employee.
- Can’t be smart about ordering. Lead times, bulk purchases, warehouse damage and making sure all the components of a kitchen are tracked properly can be a daunting challenge. Ordering electronically from design would actually eliminate hundreds of ways you can save money by purchasing smartly.
- Increases the bone pile. The bone pile contains all the extra products from mistakes and sits in the warehouse until the garage sale at the end of the year. It is every cabinet dealer’s worst nightmare and needs to be managed closely. But if you order electronically from design, you would never have visibility of products in the warehouse that could potentially be re-used instead of trashed at the end of the year. This would mean thousands of dollars in waste.
- Doesn’t work with centralized purchasing departments. Ordering electronically from design with a centralized purchasing department would be an infrastructure and process nightmare. Tons of design files, all named differently, all being sent back and forth between salespeople and purchasing people. It’s enough to give you the cold sweats when you think about the mistakes that could be made.
- Erroneous catalogs. With so many errors in manufacturer catalogs, electronically ordering from design would surely bite you. Whether it’s missing pieces, discontinued products or just catalogs that haven’t been updated yet, mistakes would be guaranteed.
- Lack of control. Purchasing is a game of tight controls and solid management. It’s usually best to concentrate this function with a select few individuals. Ordering electronically from design software would rob you of control and would let anyone with design software make a commitment on your behalf. That could cost you much more than just pennies.
- Doesn’t flex with the real world. Sometimes you have to call up the vendor and correct an order on the fly. Every time an order needs “tweaked”, someone has to store a record of it. Electronically ordering from design would ensure a full time resource just to keep all the design files updated properly.
- Lack of version control. Designers create many different versions of designs before prospects fall in love. This means for every kitchen there are potentially dozens of designs. If you order electronically from design, you would have to trust your employees to submit the right version of the kitchen design file every time. How organized are your salespeople?
- Too much rekeying. If re-keying means mistakes, then ordering electronically from design would create even more mistakes. It may sound nice because of the word “electronic”, but your back office staff would be converted into an army of typers just to keep your records accurate.
- No reporting. Electronically ordering from design would mean your purchase order data would be stored outside of your core business system. That means reporting on simple things about your business would be incredibly difficult and incredibly time consuming. Unless of course you’re going to rekey all that information into your accounting system…
- Difficult to handle customer changes that don’t need design. Customers love to make changes. And many changes are subtle in nature and can be quoted on the fly with the prospect. That means they don’t need to be made in the design software at all. Ordering electronically from design would force employees to make every little change in their design software, wasting even more valuable selling time.
- Difficult to detail order line items. When it comes to ordering, the devil is in the details, and detailing all the specifics to order within design software would take tons of time and require significant training. That means your employees would spend hours of nitpicking through details on every object in the design. Mistakes would be made and countless selling hours would be lost.
- Lack of rules & availability. Many catalogs in our industry do not contain all the rules and availability checks needed for an accurate purchase order. Ordering electronically from design would prevent you from implementing a standard process to review these orders for configuration problems so you don’t lose money – or accidentally sell something to a customer which cannot be produced.
- Not a universal solution. Not all cabinet manufacturers would support electronic ordering from design software because the orders would require a huge number of call backs to get right. That means even if you have a brand one day that puts up with the headaches of receiving electronic orders from design software, the odds are your other brands won’t. Electronic ordering for a small percentage of what you sell isn’t going to be very rewarding.
- No backup & recovery. Purchasing systems keep records of every purchase for your business. But if you order electronically from design, you would have to implement some serious software to store and version all those design files so they don’t stay on your employee’s laptops.
I won’t bore you with the hundreds of other gotchas, but suffice it to say that these items alone would waste hours of your employees time — in every department. The end result would be more mistakes than even you dreamed possible and your scheduling/warehouse manager would be pulling their hair out until they’re bald. You’d never know which way is up, you’d spend your life tracing down who did what and fighting with your sales team — and you’d eventually stab yourself with a sharp piece of hardware or impale yourself on a piece of molding just to stop the pain of it all.
So Many Issues We Could Write a Book
If you skip over the fundamentals of selling and purchasing hoping it all just works out in a design or accounting tool, you have enormous gaps that need to be closed. If you don’t fill in the gaps with solid business fundamentals, mistakes will rush in to fill them for you.
That’s why so many dealers lose valuable profit in this industry. Not because they’re poor business people, but because they don’t have a comprehensive set of tools and processes to deal with all the complexity. So, they take what they have (which is usually some design software and some accounting software) and they try to make it work. And try they will, until paperwork and mistakes come out of their noses.
Before you gobble down even more mistakes, question our industry myths. Ordering electronically from design software is just as ridiculous as trying to design a kitchen in QuickBooks.