Keeping Track

While the primary driver behind software sales in the recycling industry may be compliance with anti-theft regulations, software can offer a number of additional benefits to recyclers. The most notable of these might be the ability to track inventory while integrating the entire operation from the scale house through to order fulfillment.

EYE ON INVENTORY

“I have said for years that at the end of the day, the only way to be sure of what you have in the yard is to lay eyes on it, in other words, to do a physical inventory,” says Everett L. Duty Sr., CEO of BuyBackPro, Woodland, Calif. “That being said, this is not a practical daily option, and management usually requires daily numbers. So that leaves us with a virtual inventory, or one based on actual transactions done that day compared to what shipped out that day.” He adds, “In this scenario, a good software application is invaluable and quite necessary.”

Software should track not only how much of a given material is on hand but the cost of that material as well, says Bryan P. Anderson of Herndon, Va.-based Anderson Essentials Inc., developer of Scrap Force software for the recycling industry. Anderson adds, “Having the detail of what quantities you have on hand and what cost you paid for them will help management determine the prices they can sell the product for and still make money. It can also help them determine what prices to pay for certain materials, depending on how much they have on hand and what their historical sales for the items have been.”

With this data at their fingertips, recyclers can more easily analyze the performance of their businesses and gain control over their inventories, says David Haber, president of CieTrade Systems Inc., Stamford, Conn. This visibility into their operations can enable “better decision making in the interest of maximizing profitability and growth,” he says. “It can also help manage the risk of carrying inventory by factoring in often unforeseen storage costs and other expenses that can ultimately affect valuation, gross profit and commissions.”

While software can keep track of transactions for a scrap yard, it can only reflect the information that has been entered into the system, says Phil Cuba of St. Petersburg, Fla.-based Transact, developer of ScrapDragon software. He notes that human judgment and intervention are essential.

Cuba explains that software offers a model of what has occurred in the yard. “To the extent that they are doing something they are not telling the model about, the model won’t be right,” he says. To reflect what is truly happening in the yard, data will have to be entered as material is processed and prepared for sale. If recyclers opt not to perform the data entry required to update their models, their software will only offer a “guesstimate,” Cuba says, rather than reflect actual inventory.

Recyclers can opt to employ bar codes and bar code readers along with their software to aid in inventory tracking.

BETWEEN THE LINES

“With regard to bar coding, its cost benefit really depends on what you are recycling,” Haber says. “For companies that trade in low-cost, high-volume commodities like recycled paper, the benefits of bar coding bales or pallets of sorted material adds little if any value, if not actually incurring a cost.”

However, for operations that wish to incorporate this technology, it is available from many software suppliers and generally is used to track specific lots of prepared materials.

According to Perry M. Jacobs, executive vice president of The Shared Logic Group, Holland, Ohio, bar codes can assist in maintaining a scrap yard’s physical inventory as well as in shipping.

“Bar coding is used for the finished goods inventory,” says Joseph R. Floam of Scrapware Corp., Rockville, Md. “They are scanned in real time or after the fact to create a packing list.” When these items are shipped, they are then taken out of inventory,” he adds.

21st Century Programming, Long Beach, Calif., was an early integrator of bar code technology. Today, the company offers three kinds of bar codes with its ROM (Recycling Operations Manager) software, according to co-founder George Kane. Finished goods tags are used on prepared material in inventory, while the para pesar (to be weighed) tag is used for material that has been received but has yet to be weighed, and the WIP (work in progress) tag is for tracking material throughout processing. “Every process the material goes through can be tracked by scanning the WIP tag,” Kane says.

Bar codes also can be used to track scale tickets and to issue funds via ATM. Anderson says, “Customers with an ATM capable of this do not need to code ATM cards. They simply print the ticket, [and] give it to the customer, who then goes to the ATM and scans it.” He adds, “Of course, once the ATM dispenses those funds, the bar code on the ticket is no longer active and cannot be used again.”

Software programs feature a variety of available reports and often enable users to perform queries to generate custom reports. These reports are the source of critical business information for owners and managers.

REQUESTING REPORTS

Often recyclers need to generate reports before they are able to see their inventory positions. However, Greencastle, Pa.-based Redemption Recycling, developer of ScrapRight software, offers a feature it calls “Dashboard,” which gives company owners and managers instant access to inventory, says Shon Duty of Redemption Recycling. Dashboard provides a real-time accounting of transactions, updating inventory as material enters and exits the facility. “Dashboard is the default log-in for managers and owners, but it can be set up by department and customized based on who is logging in,” he adds.

The reports ScrapRight offers include a physical inventory report, which allows users to look at the quantity of various materials in inventory as well as their values. Shon Duty says, “With pricing changing as much as it does and being different from customer to customer, recyclers want to know what they are averaging on pricing and what they currently own material for.”

Among the reports ScrapWare Corp. offers is the inventory audit, which looks at each pound of material purchased or sold against a given commodity, Floam says. This report can help a company trace inventory inaccuracies to improperly entered transactions, he adds.

Cuba says the reports Transact’s customers rely on most often are the inventory valuation report and a month-to-date activity report, which shows all the transactions that have affected a given inventory category.

Many software programs will produce a number of critical inventory management reports, such as purchases by commodities, sales by commodities, inventory valuation, inventory aging and inventory turns. However, some recyclers may want to incorporate additional data. “Built-in report queries as well as a built-in query builder allows yard management to literally report on any and all data existing in their databases,” Everett Duty of BuyBackPro says.

Software from The Shared Logic Group also offers report writing capabilities in addition to more than 300 standard reports, says Jacobs. “As traders and owners become more computer literate, they want more creative reports,” he adds. Shared Logic, therefore, is developing reports that incorporate graphs and pie charts for better visual presentation, Jacobs says.

The goal of incorporating software and using its reporting capabilities is to give recyclers a truer understanding of where their businesses stand and to streamline operations.

The returns recyclers can see on their software investments can vary widely based on a number of factors, including the size of the operation and the degree of redundancy present. However, software providers assure that the transparency and the efficiency software offers by way of streamlined, automated business processes will benefit recyclers.

The author is managing editor of Recycling Today and can be contacted at dtoto@gie.net.