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USER STORY - MHD January 2000

Software puts Totalflow on Top

"People expect us to do the job that they have been trying to do properly for years, as well as save them money." Fred Frost of contract warehousing operator Totalflow is explaining the rationale which led to his company's decision to implement the contract warehousing system from Advanta Software. "They expect us to take a job that's been costing them $1,000 and for us to charge them $800 to do it and still make our margin on top. So we have to be efficient."

Ten years old, privately owned and operating from Sydney's Wetherill Park, Totalflow is one of many contract warehousing operators experiencing the need to increase efficiencies in its work practices and technologies amid a period of rapid industry growth.

Said Steve Nelson, Account Manager of the Totalflow implementation for Advanta Software, "Contract warehousing competition is getting more fierce and the technology is becoming a major part of that process. Totalflow recognised that the quicker they implement the latest technology, the more competitive they will be".

The pressures that led Totalflow, a significant player in the mid-sized segment of the market, to take on Advanta were varied. But in the first instance, said Fred Frost, Totalflow was alerted to Advanta Software through losing business to its competition. "Our main competitor, who was really doing a good job, and we respected a lot, was using it."

Of Totalflow's need to upgrade its own technology, said Fred, "We were seeking savings by getting into electronically handling things. At the time we were re-keying every order we received, spending an enormous amount of money administratively, and taking a lot more time to ship out products on behalf of our customers".

But, said Fred, "We wanted to be flexible and Advanta looked immensely flexible. We had to have a set of software that would match with the big players, we had to be big enough to carry the responsibility."

Advanta's software is focussed on contract warehousing, rather than just warehousing, as Steve Nelson points out. "Unlike ordinary warehousing where you only need to manage the physical inventory, with contract warehousing you also need to bill for the process, which can be very complex. You need to appear to your client's customers as though you were part of the client; you need to customise the way in which you prepare documentation such as picking slips, consignment notes, and so on. As well as that you have to have a first class reporting and inquiry system that is accessible by the client".

Although described by Fred Frost as a "medium sized player", Totalflow runs a total of eight sheds handling a mixture of different products, including agricultural products, foodstuffs and hazardous goods. "We're a really a multi-user facility. We don't have many dedicated sheds where a client says 'we'll rent that whole space off you'. We have a situation where we have five or six clients in any one space, so we need to be able to take a pallet out of a slot that belonged to one client and put a pallet that belonged to someone else back in that slot.

"It was very difficult in the old system to keep track of all the products. Most other software packages also found that difficult to manage for a multi client operation. But Advanta's ability to do it means we can now store more than one client's products in one place, in one shed, which makes us very much more efficient."

Also, said Fred, "A lot of people just don't understand how fast things are moving now. We get stock in, in the morning and it's out travelling all over the countryside in the afternoon".

The decision to implement Advanta proved itself prudent when shortly afterwards, Totalflow's new-found flexibility enabled it to pick up the contract warehousing work of chocolate supplier Darrell Lea.

A family owned firm, Darrell Lea's business is above all characterised by its seasonality: Easter alone represents around 20% of Darrell Lea's annual business, according to Ken Earnshaw, the firm's logistics manager. And, he added, "We would only have dealt with a warehouse contractor that had that sort of capability to handle the peaks. If they hadn't had it, they wouldn't have had a prayer".

Said Fred, "Because they have a very seasonal business at Easter and Christmas, when it hits peak they need the people who are supporting them to bust everything to make sure it happens."

"We're now fully integrated with Darrell Lea. We have access to their system and they have access to ours, and if they want to enquire about something they just dial straight in and have a look and get the information they want - live information".

Ken Earnshaw spells out the benefits of the two companies' integration. "We have the whole of Australia broken up into delivery runs. When we release a particular delivery run, our system creates an electronic file, which is then sent directly into Totalflow's computer so they can print the picking slip. The electronic data transfer creates the order on their system."

"We have direct access to their system which enables us to look into the Totalflow operation and see what's physically happening. That in turn enables us to give much better service to our customers."

Another major client is Rebel Sport. "One of the great things the software does for Rebel Sport", says Fred, "is what we call kitting. If they sell an item which has, say, four to five different components which can be used in other items, then we can just store the components which are then 'kitted' up into the required items."

"That was a real bonus for us when we were talking to Rebel Sport to say that we can manage your stock in that way. The sophistication of the service we provide to clients has measurably improved since we bought Advanta."

Now, said Fred, "You have a situation where you can track a product from its receipt to its delivery to the final customer. We can optimise its processing and provide value add services such as kitting."

Fred Frost believes the investment has greatly improved Totalflow's ability to manage its business, with the effect of growing its business by that most natural of mechanisms - customer satisfaction. "We've improved our efficiency, which has helped to improve our relationships with our existing clients. All business are trying to minimise their inventories all the time, trying to shorten lead times. We are growing our business because we are helping our clients to become more efficient."

Currently focusing on their use of Advanta's warehousing management module, Fred said, "Next we have to move to the next stage where we do direct client billing, invoicing our client's clients. My belief is that that is where it’s going to go, which is one of the reasons why we bought this software. It just makes sense that eventually what you'll do is place an order over the Internet and your contractor will handle it, invoice it, pack it and despatch it".

Having spent a lot on new information technologies and building up their people's skills, Fred Frost believes, "that we can show significant benefits to our clients through the use of our flexible software".

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