Systematic Approach

On the way to a business meeting, David DelBianco, vice president of business development for Metalico Inc., based in Cranford, N.J., needed to check the details on a particular supplier’s activity.

Having this type of detailed information could take some doing for a company of Metalico’s size. The publicly owned recycler of ferrous and nonferrous metals operates yards in New York, New Jersey, Ohio, Pennsylvania, West Virginia, Texas and Mississippi, some of which were opened by the company and others acquired in more recent years. And, not all of the company’s locations are straight-up scrap yards: Its Mayco Industries division is a fabricator of lead-based products with operations in Alabama, Illinois and California, and one Metalico facility manufactures catalyst.

Even with these diverse constituents, DelBianco can keep tabs on the company’s financials, whether corporationwide or down to the customer level. Metalico uses integrated business software that gathers updated information from all of its locations.

“I pulled over and logged in using my iPhone,” he says, explaining that the company’s central database is refreshed every 30 seconds. While the screen was small, DelBianco says, “if you take your time, you can get information out of it.”

The inventory and accounting software extracts transactional data from Metalico’s 29 operations, once every 30 seconds, providing an almost-real-time look at the company’s financials and conferring additional benefits that DelBianco has capitalized on.

Integrated Functions
Not every scrap yard needs the level of integration or functionality in place at Metalico. “We average about $550 million in sales and have about 800 employees, so our needs were maybe a bit different than, say, a mom-and-pop would have,” DelBianco concedes.

The company uses RIMAS NT/P software from Shared Logic, based in Holland, Ohio. (The system’s name stands for “Recycling Industry Management and Accounting Software where New Technology and Preservation come together.”)

Over the years, Metalico has grown and made numerous acquisitions, and in 2004 the company’s management decided that all acquired companies would migrate to the RIMAS software, if they weren’t using it already.

“We limited our search to systems that already had the ability to integrate to the scales,” DelBianco says of the company’s shopping process. That didn’t narrow the field much, however, as most systems offer strong receiving and purchasing functions, he adds.

“The buying is the heart of everything you do at a scrap company,” he remarks, “and it’s the heart of what you want out of your system.”

Another feature that’s part and parcel to most inventory software is production tracking. “It has to be easy to record the production steps, and I think they all do a good job with that,” DelBianco says of the software applications that are available.

However, having an integrated accounting function written into the software is not commonplace, he says. DelBianco adds that RIMAS NT/P is one of the few recycling inventory and sales software systems containing its own general ledger and integrated accounting module, rather than relegating those functions to an off-the-shelf accounting package, such as QuickBooks or Peachtree.

An additional benefit of having a single software application that integrates sales, purchases and accounting is that Metlico only has to contact one vendor when questions arise.

DelBianco says the RIMAS accounting package provides the secure level of internal control appropriate for a publicly traded company like Metalico. “All of my purchases are directly related to the accounting package,” he says.

A certified public accountant with programming experience, DelBianco describes the software’s accounting function as “robust,” particularly because it provides a detailed history. “It provided the controls that we needed to pass muster as a publicly traded company in that our data was safe, it was accurate and it couldn’t be meddled with or accidentally deleted.”

Furthermore, says DelBianco, it eliminates the need to import sales and purchasing data to a separate software program.

“My financial statements reflect what is actually sitting on the scale at the moment,” he says. “There is no waiting for daily imports, and there’s only one system I have to look at.”

Multiple Servers
The fact that the software is based on the Microsoft Windows SQL (structured English query language) server database also was important to DelBianco. Several software modules can be open at the same time. It also supports multiple users, such as several open scales, on one computer. This functionality enables a single location to enter multiple loads at once.

The SQL platform allows Metalico’s 29 locations to operate independently but replicates and uploads their individual databases to a central database that is refreshed every 30 seconds. This read-only file is located on a corporate server housed at the company’s headquarters.

While the software is centralized on the back-end, this front-end independence has been important for Metalico. “I never have to worry about the network going down because it will never affect the yards,” says DelBianco. As long as an office has electricity, that office also has purchasing and sales functionality. “They’re not worrying about a central computer in some other town. All of our division servers are standalone.”

DelBianco says the SQL replication feature has in effect eliminated the need to centralize operations in a single database as well as the need for guaranteed Internet connectivity between the company’s headquarters and the various yards at all times, saving on costs. In addition, the functionality also has meant that Metalico’s Information Technology (IT) Manager Anthony DeMeo can handle just about all of the company’s IT needs on his own.

Another benefit of Metalico’s integrated software is that it can provide timely financial reporting that keeps banks and other creditors in the know. For example, the program can keep tabs on inventory even before loads have been priced. Similarly, the software can tally accounts receivable and accounts payable figures prior to those transactions actually being posted in the corresponding module. That can be helpful, particularly when reporting financials to creditors.

With fully integrated software, all of the transaction information can be preloaded for a variety of reporting functions, helping with cash flow analysis and financial reporting.

Regular Updates
Companies that supply software to the recycling industry often rely heavily on customer input to further refine their applications. DelBianco says some of the functions that have been added to the RIMAS program throughout the years were suggested by users at Metalico. One recent update records the precious metals contents in each catalytic converter Metalico purchases.

“If I buy two different converters and put them into a package, the Shared Logic system knows exactly how many troy ounces of each of those metals are in those converters,” says DelBianco, allowing for proper hedging of metals purchased. While he could figure out those details on his own, the extra functionality is a welcome time saver. “It keeps us out of Excel,” he says, which is one of the perks DelBianco looks for.

Helpful Gadgets
The numerous peripheral devices that go along with the software are the bells and whistles that users appreciate. At Metallico, iPads are employed for receiving and grading catalytic converters. Driver’s license scanners eliminate the need to enter customer account specifics. Touch-screen computers and ATM machines can streamline tasks. And small thermal printers are replacing large ones. “We’re saving an awful lot of paper now,” DelBianco says.

These hardware components all part of a software system that is bringing convenience and control to this diverse organization as well as assisting with the company’s regulatory requirements. DelBianco refers to Metalico’s obligations under Sarbanes-Oxley, in particular the reporting requirements for publicly owned companies called for by the 2002 law. “We had some high standards for preserving our data,” he says of the law.

The author is a managing editor with the Recycling Today Media Group. She can be contacted at lmckenna@gie.net.