Keeping the Pace

Software comapnies have upgraded and fine-tuned products to meet recycling industry needs.

Those in the computer industry regard change as a constant. Not all recyclers may feel that way, but where the two industries cross paths, the forces of change are clear to see.

Both users and vendors of computer software designed for recyclers stress that the modification and upgrading of software is an ongoing process. Even though some recyclers have been using inventory control and accounting software for more than a decade, they still find themselves in plenty of situations that require a new feature or application.

"There are very few standards in this industry," notes Ben Morris of Morris Recycling, New Albany, Miss. "There are differences in the way things are done at yards owned by the same company, like mine. It’s a pretty big challenge for the software guys."

Scrap recyclers for years have declared the profit-and-loss importance of what takes place at the scale house. Even though scrap companies receive payment from mills, smelters or brokers, they know that money is earned or lost by how incoming material is assessed at the scale house.

Much of the software designed for the scrap industry focuses on scale house activity, although much of it also is designed to track activity beyond the initial scale transaction.

Software vendors and designers note that recyclers can benefit in several ways from software that allows them to closely monitor scale house activities and trends. Larry Smith of Shared Logic, Inc., Holland, Ohio, points to a Last Activity Report that can be created to help recyclers track generator activity. "If you suspect you haven’t seen XYZ Company as much lately, you can generate a report finding out names of companies with whom you have not done business since a certain date," he comments.

For recyclers who wish to keep a closer eye on the scale while they are away from the job site, video monitoring systems have been set up to let owners or managers view yard activity while they are off site.

Williams Software, Los Angeles, has designed a digital system that integrates transactions with camera monitoring for visual review. "For an owner-operator, it’s a great way to get away from the facility," says Greg Williams. "Scrap yards tend to consume your life," he adds. Williams, is president of Williams Software and also of Williams Recycling Co., a south central Los Angeles scrap facility.

Snapdragon, available from TransAct Payment Systems, St. Petersburg, Fla., was designed in part as a security measure, but also is useful to help resolve scale-related disputes, says TransAct president Ken Gruber.

The Snapdragon feature is available as on option with software packages designed by Systems Alternatives International (SAI), Maumee, Ohio. "The image capture invoke command is incorporated right in SAI’s electronic truck scale and platform scale systems. The scale operator is not required to do anything additional," SAI president John Underwood remarks.

Potential revenue can be lost at the scale house through honest mistakes—such as mis-graded material—and through fraud perpetrated by either employees or customers. Software and video systems at scrap facilities can help catch many such incidents, vendors say. Software that carefully tracks each transaction also can help deter fraud.

Ben Morris acknowledges that his company was victimized by an employee in the days before it began using a software package from Recy Systems AG. Morris was so impressed by the software that he subsequently agreed to become the U.S. distributor for Recy Systems.

Scale operators can face a line-up of anxious customers, so keeping transaction software simple is seen as an important consideration by many recyclers. "Ease of use is the biggest factor," says George Kane, president of 21st Century Programming, Long Beach, Calif. "Recyclers should make sure the system they buy is something their employees can actually use."

Kane, who also has a recycling background from his youth working for his father’s recycling company and later with other scrap metal work experience, says his company’s systems are designed with that consideration in mind. He compares the touch screen interface of 21st Century’s software with a McDonald’s cash register, and notes that it is ideal for use by novice computer users, those for whom English is a second language and even "the older, millionaire company owner who just isn’t comfortable with computers."

Greg Williams also touts software that is intuitive and can prevent mistakes. "The speed of an executed transaction is an important side benefit. Productivity should be the result of automation."

TransAct vice president Phil Cuba reports similar reactions to the company’s ScrapDragon software. "Scale operators love it because it is easy to use. We’re hearing from managers that business has increased because of it. I think customers come back because the scale house moves quicker. Price and location are still factors, but the next best thing you can do is get people in and out in a hurry."

Most recyclers ultimately decide that the software used at the scale must gather, collect and dispense information that affects other areas of the business.

"I visualize software as having two major components: a financial component and an operational one," says Ben Morris. "If you can’t make the beans, you can’t count them."

Software that has several functions or integrates with other software packages can help provide recyclers with this "big picture" view.

Although the approaches by software vendors may be different, most of them agree with the end goal of providing recycling company owners with a way to get a handle on the ongoing profitability of their businesses.

"Initially, recyclers just wanted to track inventory," says Shared Logic’s Smith. "Then purchase and sales relationships. Then they wanted to know what happened when they processed from one grade to another. How do you compute the margin? So they want to know what results came out of the processes so they can more effectively decide if they are making any money with the processes."

According to Joe Floam of ScrapWare, Rockville, Md., "Recyclers are looking for better management tools. I see a focus on profitability analysis," he remarks. "They want to know if it’s profitable to be buying scrap from this particular generator."

SAI is among the companies offering a wide range of options that can be used by companies with multiple locations. The company has successfully converted many of its widely used programs to operate on a Windows platform, and also is using the World Wide Web as a way for large national scrap companies to securely communicate with larger generators and customers.

The company has set up successful sites for Simsmetal America and Hugo Neu Inc., according to Underwood. The system allows internal users and authorized external business partners to view some of the same data, at the same time, to improve communications between key accounts.

Mike Recalis of Mayer Information Technologies, Markham, Ontario, Canada, believes that forging a generator-processor-mill communication chain on a secure Web site is where the Internet and the scrap industry will ultimately meet. "There wasn’t a strong enough push from the customer base for e-commerce transactions," Recalis says of the rise and fall of the failed dot-coms geared toward the scrap industry.

"Putting an emphasis on back-end processes—on what happens after the sale or purchase; things like payment information, invoice details, documentation or contracts—that is where the interest is," says Recalis. "It’s laborious to fax out certain contracts and pricing lists. If you can automate that, that’s what they’re looking for initially—not so much to change the procurement aspect," he remarks.

"Instead of stuffing envelopes and paying postage, these types of systems save labor and time in the billing cycle," points out Morris. "It can provide increased billing accuracy, it means less effort for your staff and can prevent them from fielding calls from customers looking for information. I think you’re going to see successful integration of this kind of system with the mills as well."

Software that saves staffing time and costs—whether at the scale or in the office—is the only software worth considering, according to Morris. "A [potential software] customer of ours recently visited and wondered where the rest of the staff was," he notes. "Our tonnage was twice his, but our staff was a lot smaller. He had 13 people doing the work I had three or four doing. The difference was they didn’t have a good software solution. When volume grew, they would just hire someone. You’ve got to look at your clerical workload and office staff the same way you do operations. When you scale the size of a company, you have to scale the size both of the shredder and the size of the software," he states.

Morris notes that scrap recyclers study cranes before they buy one, and should do the same for software. "Just like with a crane, there are lots of cost considerations besides the amount of the check. Many people don’t see the cost of software isn’t what you write the check for, it’s the savings you get from employee and clerical savings."

In addition to measuring cost savings, recyclers might also want to make certain that the software they are purchasing will generate the reports they most want to see.

Williams said he began designing his own software when the vendor he was considering was unable to promise it could produce a one-page financial statement that he is accustomed to using.

Kane says there is wisdom in integrating scrap-specific software with Great Plains and other accounting software packages in common use. "Why compete with Microsoft?" he asks. This allows users to continue using financial reports to which they are accustomed.

Modifications are another consideration, with most vendors agreeing that they are inevitable. "In the early days, we would make a modification for one customer at a time, but over time you would have fewer people on staff who understood the custom modifications that had been made for a given client," says Smith of Shared Logic. "Modifications are now made for one customer and given to everyone else for free. But then everyone in our organization knows the software and there is only one version out there."

Making modifications has always been a tricky issue, says Floam. "You could devise a process or procedure in your software that may or may not be accepted by every scrap company," he remarks. "So you have to be able to modify or upgrade that without hampering future upgradeability."

Recycling companies ranging in size from millions of tons shipped per month to small yards with one piece of processing equipment are looking for the right software, so vendors should continue to be challenged to offer a variety of packages.

"Big companies can’t even know inventory without a computer system," says Morris. "But the small guy almost needs to know more."

A scrap recycler sticking his head out the back door to do a quick inventory check may find himself running behind better-informed competitors. "Even the small guys need to know how much aluminum they bought last month. Just looking at the pile won’t tell you that."

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