IDC Construction Interview - Charlie Crabbe, Construction Administrator

[Evodio Walle]

IDC Construction Interview
Charlie Crabbe, Construction Administrator

Harvey: Can you tell us about your company and what IDC does?
Charlie: Sure, IDC Construction is a hotel and resort construction company, primarily renovation but also perform new construction as well. A large majority of our work is in resort areas like Southern Florida and more recently starting to focus on large resorts.

Harvey: Now what specific challenges in that business did you find that promoted you to seek a system like SmartTurn?

Charlie: A General contractor, we have a lot of inventory coming through and a lot o fit we may be financially responsible for but we aren’t actually the responsible party for the installation of the material. So the problem we are having is the financial exposure by storing and releasing the materials but we don’t have as much control over the use and the tracking of it once it leaves. So the problem that we were having purchasing and storing a lot of materials but the actual releasing and the use of it on the jobs site wasn’t as orchestrated as we would have liked. That kind of left us with some exposure to some lawsuits and to damaged materials. With the scale of the projects some of the material was difficult to replace.

Harvey: In terms of dollar value, do you know how much you were losing per project due to shrinkage?

Charlie: it really varied. As an anecdotal story, that there were some fairly expensive doors on a project in Florida that were moved from the warehouse and moved to the jobsite but unfortunately for one reason or another were not ready to be installed yet and instead of being returned to the warehouse or being stored properly on the jobsite they were just left out and these are all custom made interior doors, basically kept out in the elements for about 3 days or so. Enough to damage them all and at that point we cannot do anything with them. The additional problem is that some things are actually purchased by the owner of the resort and just stored by us; in that situation it is even worse going to the owner and saying that we damaged a pallet of your Italian tile that we had imported…it is not really a situation you want to be in as a contractor.

Harvey: So would you say being able to see your inventory’s movements and having that traceability ha reduced those scenarios?

Charlie: It has, and specifically the way that we are using it, we have created a liability acceptance. So a part of the inventory fulfillment, we are having the subcontractors that are removing the inventory sign acceptance of the inventory and acknowledging that they are going to be liable for everything once it leaves our warehouse.

Harvey: So you are transferring ownership to the subcontractors as you fulfill from SmartTurn?

Harvey: So which key differentiators were you most picky about in selecting as system like SmartTurn?

Charlie: Well we have a lot of users who probably have a lower than average level of technical aptitude, so we didn’t want to have something that would be overwhelming out in the field and at the same time, because our projects are all around the country and our corporate office being in a state where we have very few projects, we wanted something that would be accessible online that we could have executive get on and look at the warehouse reports and see the inventory levels and see how the ordering was going, so we wanted something that was online and something that was customizable that would let us pull back a lot of the unnecessary elements and reduce the amount of clutter and confusion.

Harvey: How has SmartTurn solved your specific business challenges?
Charlie: we have been able to tailor the system to show exactly what we want to both the warehouse staff and to any potential users. We are going to have set up it so subcontractors can log on to create sales orders and have them filled as they arrive to the warehouse. The creation of users and the customizing all the different user levels of accessibility has definitely made the rollout process easier because we were able to spoon feed exactly what we wanted to for certain users on a very controlled basis. It has definitely made the implementation processes a lot easier.

Harvey: So where you’re your corporate headquarters, Charlie?
Charlie: Our headquarters is located in Woodstock, Georgia, which about 45 minutes north of Atlanta.

Harvey: If I remember correctly, you do all of your procurement directly form you corporate office and those purchase orders being delivered to various 3PLs that you contract to warehouse this inventory, is this correct?

Charlie: That’s correct.

Harvey: So at this point it sounds like you are pretty much driving the imitative for 3PLs who may or may not have the technology to manage your inventory?

Charlie: That’s correct.

Harvey: how is that working out?

Charlie: It has been working out pretty well. I think that once we have a little bit more of an established method, we will come up with the proper order for the creation of purchase orders.

Harvey: Since we are talking about configuring the system to fit your specific business needs, can you tell me about how easy it was to implement the system and later on to train users on the system?

Charlie: The really nice thing was having the demo site prior to the live site so we were able to set up the users and configured them for what they needed to do. We gave them all a few days to play around on the demo site prior to letting them cut loose on the live site. It allowed us to slowly feed out their new abilities and new roles to them. We have a warehouse management in Boca and he has assumed a lot of the onsite responsibility for the use of SmartTurn.

Harvey: How do you feel SmartTurn’s support has been?

Charlie: Everyone has been great. Our Customer Experience manager was extremely helpful in setting up our system the way we wanted.

Harvey: In terms of an ROI, do you have any numbers you can quantify? For example, if you were to put a number on those custom doors?
Charlie: I think in that particular instance we are looking at several tens of thousands. I know that on a personal level, the warehouse manager is indescribably grateful for the system because the previous project that he was a warehouse manager for was done on paper and spreadsheets, so actually having an actual dedicated system has been great. The combination of that and the micro tracking ability to see every single item and to quantify and categorize everything the way we want it, I think should hopefully get losses down to zero.

Harvey: Now down to zero from what? What is the old benchmark for that?
Charlie: Because everything was done on pen and paper, I don’t think anyone ever added up all of the losses. The biggest issue is having custom items made and these get damaged, these can impact the entire job schedule which that could go well beyond just a financial issue. That could start affecting the contracts and future business. So a lot of these resorts are operational during the construction process, and so a lot of that is contingent to us being able to get in and get out as quickly as possible and leaving a very small footprint in terms of the impression of the guests. And if we have to put the tile on hold for a month, that is definitely going to be a noticeable hiccup in the construction processes.

Harvey: So would you say with SmartTurn that your projects are now on time and on budget?

Charlie: Yes.

Harvey: How does this give your company a competitive edge?

Charlie: I think that from the owner’s perspective it is a nice benefit for the customer to get a window to where the inventory levels are at. On a larger scale, it kind of varies; we have a handful of Embassy Suites renovations right now. So in that case, there are a lot of items that will be applicable regardless of what the location is because there is a branch standard, so with that we can use SmartTurn to tell us that we have excess inventory here, we can transfer it to the next project and save the owner money, save ourselves money, and save ordering time. With the some of the one-off projects, it is beneficial for the owner to in terms of comfort and keeping an eye on the finishing and ordering process. I think on some of these repetitive projects, it really helps that all the inventory is getting used and appropriated to the right place.

Harvey: Do you foresee any future challenge where SmartTurn will be able to help you?
Charlie: The next challenge is for us to really have SmartTurn integrated with our ERP system which is Timberline. If we can do this, we can integrate SmartTurn into the purchasing module of our accounting system.

Harvey: So now we are talking about streamlining the front office as well, which means less hands in the pot.

Charlie: Yes, absolutely.

Harvey: I know that we helped you create some specific macros, can you tell us a bit about that?

Charlie: Yes, that was actually one of the things our CEM was helping us with. He created a macro that generated based on an order fulfillment, just exporting the report from that to a macro that is set up to resemble a receipt, which is being used as the subcontractor acceptance form. This will acknowledge their liability for the inventory. This will cut down on potential errors.

Harvey: Going back to the beginning a bit, what was it that caught your eye about SmartTurn?

Charlie: The thing that caught my eye with SmartTurn was that the interface was really clean and the ability to customize it cleaned it up even more so. None of the other products we looked at really offered anything comparable to the interface or the implementation process. SmartTurn’s scalability was important also. I made up my mind pretty quickly.

Harvey: It sounds like love at first sight.

Charlie: Yes, we expect to have about 20 users on the system within the next six months.