Success Stories

Activant Prophet 21 Helps Fluid Power Distributor Grow Revenue Without Increasing Headcount

Some days, working with customers involves compromise, says John Thornton, president of G.S. Hydraulic. "We must constantly demonstrate how our products and services will help them save money," he says. Other days, it's a downright battle: "Some customers will try to beat us up for the best price possible, no matter what."

Either way, Thornton must stay lean to stay competitive. "You have to maintain efficiency to keep your costs in order and avoid the expenses of rework," he says. Activant Prophet 21, a Windows-based, SQL Server solution designed for distributors, helps Thornton effectively manage costs and streamline operations - ensuring he maintains competitive prices and healthy profit margins.

"With Prophet 21, we've grown our business by at least 25 percent in two years without any increases in staff," Thornton says. "We process transactions more efficiently, and can pull just about any information we need very easily. Prophet 21 cuts the mental processing involved in a lot of tasks tenfold - we get meaningful reports in minutes, instead of hours."

A Huge Step Forward

Established in 1972 and based in New Berlin, WI, G.S. Hydraulic is a distributor of fluid power and electro-hydraulic equipment and electronic components. Primarily serving mobile equipment manufacturers - including large firms in the forestry and mining industries - the company employs about 50, and sells more than $20 million in services and supplies annually.

About 50 percent of G.S. Hydraulic's revenue comes from custom assemblies. Before moving to Prophet 21, tracking bills of materials (BOMs) for these assemblies was a daunting task, involving three separate databases. Employees kept engineering and computer-aided design BOMs in one database, pricing information in Microsoft Excel spreadsheets, and other, separate BOMs in the company's business system. "Things got really confusing with the triple data entry," Thornton admits. "And we lost money on many occasions because price updates didn't automatically transfer from one location to another."

Prophet 21 enabled G.S. Hydraulic to consolidate databases: "Because Prophet 21 has an open infrastructure, we can link to BOM information. We've effectively cut three databases down to one."

Thornton estimates that this consolidation saves his employees more than 2,000 hours per year. "It's a huge step forward for us," he says. "It's amazing, how everything links seamlessly."

Inventory Metrics

Before moving to Prophet 21, Thornton could always tell when service levels suffered. "When business was up, it seemed inevitable: people would call with more complaints," he says. "We were pinched, and had to do things faster."

Prophet 21 helped slow the complaints considerably, despite the 25 percent increase in business. "It helps us get the right products out the door at the right time," he says. "That keeps customers happy - and keeps employees focused on driving revenue instead of correcting mistakes."

The solution has also helped G.S. Hydraulic employees improve inventory management. "Prophet 21 has given us the ability to identify slow- and fast-moving items. We've redeployed our assets into areas that were neglected before, and avoid replenishing slow movers," he says. As a result, turns have increased by about 15 percent. "When it comes right down to it, it's pretty simple: Prophet 21 lets us determine what we need and what we don't need.

Concludes Thornton: "Our last system stunted our growth. We chose Prophet 21 because we wanted to grow - and we wanted a solution that grew with us. So far, it's evident: we made the right choice."

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