Success Stories

Prophet 21 Enables Distributor to Reduce Costs While Establishing Business Strategies

According to Dennie Bomar, president, HVAC Sales & Supply Co., distributors once bought as much stock as their warehouses could hold to ensure they always had what customers needed.

But, like many distributors who invested in Prophet 21, Bomar's attitude toward stock replenishment has changed dramatically since going live on the Windows-based, SQL Server solution: "When we sell our last air conditioning unit, I want to be unloading a fresh supply off the truck precisely at that moment," he says.

Bomar contends that Prophet 21's power to transmit real-time information throughout his company has enabled employees to adopt to a just-in-time buying philosophy -- instead of just-in-case. "Using the solution aggressively for a year and a half enabled us to reduce stock levels by more than 17 percent," he testifies. "That's $400,000 we're now putting toward debt reduction and capital improvements."

Inventory turns during the same time period increased by 20 percent. "With Prophet 21, we really keep our material flowing," Bomar says.

A Move that Paid off

Bomar moved to Prophet 21 from Activant Acclaim, a UNIX-based solution, just as the U.S. economy started to soften shortly after the year 2000. It was a move that paid off.

Prophet 21's graphical interface enabled almost any employee to easily assume administrative tasks when mid-level managers left the Memphis, TN-based HVAC Sales. Additionally, since many tasks -- like purchasing and financial reporting -- are now almost completely automated, jobs that were once handled on a full-time basis can now be completed in a few hours a week.

"Stock-replenishment is now almost a purely clerical function," Bomar says. "Prophet 21 runs reports and automatically generates purchase orders. Anyone with a few hours of training on the system can handle it."

Pulling end-of-month financial reports -- a job that took two employees almost a full week to complete with Acclaim -- now takes one person less than an hour. "Closing a month is a snap," Bomar says. "At the beginning of every month, I have profit and loss statements on my desk in a matter of minutes."

Labor efficiencies gained as a result of Prophet 21 have helped to reduce payroll by almost 20 percent -- or by about $500,000 over the course of 18 months. "Because Prophet 21 really makes a lot of jobs easier, we haven't had to replace employees as they've left," Bomar says. "My people have been able to pick up the slack -- and do it very efficiently."

Every Season: Turn, Turn, Turn

Just like many other industries, the HVAC business is very seasonal. Contractors buy air conditioners in the spring and summer and heating units in the fall and winter. "It's imperative that our software address this issue," Bomar says.

Prophet 21 handles seasonality excellently, and enables HVAC Sales to turn inventory before it goes out of season. For example, when producing POs for September, the solution uses the previous year's historical data to create vendor orders for seasonal items. So, even though HVAC Sales employees may have sold 2,000 air conditioning units during the months of June, July, and August, the solution doesn't recommend that the company order a similar quantity for September, October, and November. "This ensures that we don't have 800 plus air conditioners sitting on the shelves in the middle of February," Bomar says.

Easy Access to Strategic Business Information

"Because Prophet 21 runs on a SQL database, and since everything is stored in tables, you can extract any data you want," Bomar says. "If you can write basic queries, you can get some pretty eye-opening information."

Prophet 21 has enabled Bomar to monitor business information he could never before access. "We watch so many operational metrics and ratios now. For the first few months, we were on information overload," he laughs.

Bomar tracks almost everything -- from simple figures like sales per employee to more complex ratios like dollar value of delivery orders to miles driven. It's information like this that has enabled him to make sound, strategic business decisions.

For example, after months of pulling reports, Bomar realized his drivers were making an ever-increasing number of deliveries to new construction sites in the far eastern end of the county -- a trip that totaled three hours. He decided to open a remote distribution warehouse situated in the center of all the new construction to shorten delivery times. He realized that this could help improve customer service -- after all, many HVAC subcontractors worked on a job-by-job basis and didn't have three hours to wait for a delivery -- while reducing wear and tear on his trucks.

Three months after quietly opening the warehouse, contractors and subcontractors were talking. "We've gotten a lot of compliments and a lot of calls," Bomar says. "Our customers know that they can call us, order something, and get it at their site 20, 30 minutes later. It's a huge competitive advantage."

With Prophet 21, inventory turns and productivity are up, and operating costs are down," Bomar concludes. "There's no question about it: it lets us move the boxes more efficiently, reduce overhead, and improve customer service."

For more information on Activant's enterprise software solutions, please fill out our Web Contact Form.

Back to Top