Narrowing In On the Niches

Part of that sophistication has been implementing computer software programs to help manage recycling facilities more effectively and to offer customers more detailed information about the materials they are purchasing. Software packages offered on the market today can be an alternative to mainframe systems that are more costly. 

The consensus seems to be that a software system is crucial and necessary for business at most scrap yards and recycling facilities. Customers want more detailed information about materials, and to stay competitive providing that information fast is a key.

“A steel mill is a complex place,” says J. Edward Norris, president of Ferrous Solutions Inc., Canton, Ohio, “and steel mills have pressure from their customers to do things that have moved the economy ahead. With consolidation in the industry they are often working on different systems. Consolidation is going to force that [use of software] so they can manage their systems.”

MAKING THE SWITCH 

Bruce Fox, president of Markovits and Fox, San Jose, Calif., says the company has been able to better manage its business using RECY scrap management software, a program by European developer Klarmann & Partner. Scrap Advantage resells the product in North America.  

Markovits and Fox handles ferrous and nonferrous materials and has a 20-acre facility in San Jose, Calif., as well as a five-acre satellite facility in Sparks, Nevada. The company uses software that operates on a client-server network and handles all scrap transaction prices as well accounting functions for both locations.

“It has helped us manage our margins and inventory more effectively and it has dramatically reduced the amount of paperwork and administrative effort that had been required to run our business,” Fox says. “It has allowed us to get better information to decision makers more quickly. It has had a real positive effect.”

Using a software program to manage the business allows for sales information to be calculated more quickly and accurately and can provide the company with must more information than other methods of management, such as keeping books. Software can also manage daily transactions and contracts.

“One of the very important abilities we have is to look at purchase and sales information, tonnages and sale price summaries,” Fox says. “Another important use for us is looking at margin analysis and gross margin analysis for different components of the business.”

NEW TECHNOLOGY

Designs in software for recyclers have followed some of the same trends as the PC industry has followed. Some programs run on a Windows OS and feature some of the same screen concepts, which can make the programs easier to use.  

The Windows-like format can also allow users the flexibility to make the program more customized to their liking, says Larry Smith, vice president of Shared Logic, Holland, Ohio. “Now that the program is in Windows, we can allow customers the ability to design their own forms, check formats, scale tickets, purchase contracts and pricing letters,” he says. “This allows our technical staff more time to focus on the support of our standard system.”

Writing programs in a Windows-based language allows the program to take data from other programs and import and export applications much easier, Smith says. “We can run it on any manufac-turer’s hardware—any hardware that supports the database system— as long as they have the ability to provide industry standard network interfaces.”

JWS Corp., Shawnee Mission, Kan., is also following the trend of products with a Windows formatted program. The Windows Transfer program replaces the previous DOS modem transfer product for exchanging files between sites. “Windows is definitely a trend,” says David Goldstein, marketing manager of JWS Corp., “and if that’s what they want, we have to offer it.” 

Making systems as automated as possible seems to be where software for recyclers is heading, says Jerry Martz, senior consultant for Systems Alternatives International, LLC, Maumee, Ohio. “Integrating the computer systems of recyclers, brokers and consumers is one direction that software for the recycling industry is heading,” Martz says. “We feel that those recyclers and brokers who form close partnerships with consumers through information technology will have  strategic advantage over their competitors.”

HEADING TO THE MARKET

When Ben Morris acquired a recycling facility in 1997, he was in a bind. He needed a software system to manage the business, and he needed it quickly. The New Albany, Miss.,-recycler had materials coming into the Morris Recycling site, but no computer software. For the business to operate, a system was needed to manage the business. So, after listening to some sales pitches from software companies, he purchased a system the manufacturer said would work for his business. But, purchasing a system without researching first was a lesson  learned the hard way for Morris.

After spending 18 months trying to get a system to run correctly and for the applications the maker had touted to work, Morris tried a different approach. 

“The most important thing to me is what comes out of the product,” Morris says. “If you can’t get good management reporting then its worthless.”

Smith agrees that information a program can provide is an important aspect of a program. “You can immediately view a transaction as soon as it has been shipped or received,” he says. “This ability to track information about materials quickly and accurately is why many recyclers are turning to computer software programs to manage their businesses.”

How complex a company is can help determine which software system is right. “How sophisticated the business is and where they are in terms of technology” can be two determinants of which system could be a right fit for a company, Martz says. The larger the company, often the more sophisticated their software needs are.

One important aspect Morris recommends looking at when researching software companies is the service record of the company. “They can’t hold your hand in everything.”

While it is important that a software company have the service department to back the product up, the company must also have at least basic computer knowledge to operate the system. “A software company can’t be expected to be your information systems department,” Martz says. “Expectations are a big part. While it is important that a software company have a well-staffed, experienced service team to back up their product, it’s equally important that the client have both realistic expectations and top level commitment to a successful computer system implementation.”

Whenever a company changes software systems, it is going to change the business, contrary to what some people may think, Morris says. To make the fit between software and the company as seamless as possible, Morris recommends finding another company as similar to your business as possible that is using the software you are thinking of purchasing.

“Go visit a user and see what they are producing,” he says. “Ask complicated questions. Unless you physically go see it, then you won’t see anything.”

Morris estimates his business lost a significant amount of money in the time he spent trying to get one program to work. He says had he spent more time researching his purchase that may have been avoided.

The size of the company selling the software and the actual number of employees is also important to investigate. Also, the history of the company, including the business’s sales and revenues, should be looked at. “Call references, call references, call references,” Morris says.

Making sure the software company has the power to stand behind its product is crucial when purchasing a system, Martz says. “A lot of what people miss is the company and the resources behind it, the support and training available.”

Having a specific list of functions and applications that are needed is also critical to finding the right software. “Know what you are looking for,” Morris advises. “Have a list of things you specifically want to resolve. The shopping list of specifics is the most important because if you don’t know what you’re shopping for, then that’s what your going to get.”

Martz agrees. “The big issues are ‘what are my requirements?’ ‘What are my priorities?’ ‘Where will I get the greatest return on my information technology investment?’ Martz says. Looking at a strategic plan for the company can be one way of determining what the company really needs to run the business effectively.

Lastly, Morris recommends calling somebody who has recently gone through the process of purchasing a software package. While a company that has had a system in place for a long time may be able to offer advice, most likely they will not be aware of what systems are available on the market.

TAKING A DIFFERENT ROUTE

Although a variety of software is available for recyclers, sometimes there isn’t one system that can offer everything a recycler needs. When a paper recycler had this dilemma, the company decided to approach Custom Business Information Solutions. The Atlanta-based company created a custom program designed specifically for its business. The program, Waste Trak, is a database application that tracks waste receipts, maintains customer and pick-up information, prints reports and produces customer invoices.

“We designed it around their operations,” says Alissa Tilson, manager of product development for Custom Business Information Solutions. “There really was no software that met the needs of paper recyclers because of the complexity of the business.”

Typically when Custom Business Information Solutions creates software for companies it is not mass marketed, but since Waste Trak was for such a specialized audience the company decided to put it out on the market and see what kind of response they’d get.

Some of the applications needed by the paper company Waste Trak was designed for included the ability to handle complex accounts, Y2K compliance, and the ability for many people to be entering data at the same time.

The data also often needs to be transferred between different locations. To accommodate sharing information with other locations, Waste Trak is programmed to automatically send data to those locations each night.

Other concerns of recyclers include the ability to keep the accounting systems separate from the recycling data, although some companies do prefer to have the two integrated now, Tilson says.

The author is the Assistant Editor of Recycling Today.