The Floor Covering Business to Business Association (fcB2B) is the force behind bringing the floor covering industry into the 21st century, and it is doing so by raising the efficiency of all players in the system—buyers and sellers.
Think about the time and money that can be saved if a retailer could instantaneously have an order entered when the salesperson was on the sales floor closing the deal with the customer. What a novel idea.
Sure, talking with the people in the order department, placing orders, asking questions, getting to know each other and chit chatting about the previous night’s TV shows is fun and interesting, it’s just that it wastes untold number of hours and costs an untold number of dollars each year in mistakes—and it’s just plain inefficient.
That’s one of the reasons why fcB2B was formed 15 years ago and, since, has seen some of the best minds in the industry erecting a system that makes the industry as competitive and as efficient as just about any other industry in existence.
The problem is all these fancy electronic tools just haven’t attained the necessary buy-in from manufacturers, distributors and, most importantly, retailers to form the necessary critical mass. Critical mass is defined as, “A very important or crucial stage in an enterprise’s development, where the business activity acquires self-sustaining viability. When an entity reaches critical mass, it is thought that it can remain viable without having to add any more investment.”
We talk and write all the time about the competition retailers face daily from other types of independents and big box players, which is real enough. But the real competition for flooring dealers really comes from outfits selling vacation cruises; widescreen TVs and other electronic marvels; new cars, riding lawnmowers, and so on.
Retailers need to realize a salesperson who pulls out a yellow pad to write up an order instead of a tablet or some other handheld device with each passing day looks more to a growing segment of the population like he should be wearing an eye shade and sleeve protectors. More and more of today’s savvy consumers just are not going to do business with a graybeard.
And be aware, that a graybeard, in the eyes of a millennial, is a lot younger than you may think. If you’re seen pulling out a pencil to write an order, in their eyes you are a graybeard.
When we saw Textile Management Systems struck a partnership with Engineered Floors to join the fcB2B ranks via its RollMaster software we wanted to learn more and also get an update on the organization and the progress it’s garnered of late, so we called Dev O’Reilly, Textile Management’s founder, president and CEO. Here are some excerpts from that conversation, but you can listen to it in its entirety by going to the archives of the TalkFloor website, located via the Floor Trends website at floortrendsmag.com/talkfloor.
TF: [You] recently announced a new B2B Initiative; it’s with Engineered Floors. Tell us about it.
O’Reilly: Engineered Floors is a dominant player in the market. It is very active in the property management segment and several of our property management clients were calling us and asking why Engineered Floors was not participating in the fcB2B protocol. So we reached out to Engineered and they told us they have been getting the same type of calls.
We [then] visited the company in Dalton and discussed the system. We had also set up what we call a Sand Box, it’s in the Roll Master cloud and it allows anyone to go in and test the process. The Sand Box helped the people at Engineered create their own documents, look at their results and see how their customers would view the documents and as a result they developed a product catalog.
In general, the fcB2B protocol has really become such a basic tool that everyone should be using it. The purchase order generation and invoicing processing reduce overhead and improves accuracy and allows for all players in the supply chain to make money. It lowers the cost for the supplier and it lowers the processing cost for the retailer and, on top of that, it improves the accuracy of information.
TF: Will the fact that Engineered has now embraced fcB2B mean that more retailers will join the system?
O’Reilly: There is nothing we are doing that is different from what anybody else is doing. That’s the beauty of the standard. The dealers are the force that really drives the system. And the prime resistance is basically the dealer, because it automates maintaining showroom pricing. When you add transactions like invoices and purchase orders it improves the efficiency of the entire process so much that both the supplier and the dealer benefit.
The resistance I [see] is that nobody feels they have the time to learn a new process, and that has created a delay. There is also the thinking from dealers they can make a better deal when they call their rep or their friend Sally. But that kind of thinking is really just with the older crowd. The millennials and the next generation coming up really don’t want to talk with anybody. They want everything to be electronic—they want to do it on their phone or their tablet while they are at the ball game. And that’s what B2B does.
TF: What is your feeling as to how the floor covering industry stacks up against other industries in terms of technology? Would you say [it is] more or less advanced than other industries?
O’Reilly: To be fair, the floor covering industry still has a high percentage of mom-and-pop operations. In many industries, the smaller operations like these have disappeared and, as a result, [they] are totally electronic.
The flooring industry is very different from most other industries. The service that the dealers provide is one-on-one and it’s custom for every job. So the floor covering dealer is different from most retailers, like the local hardware store, for example. But I think this one-on-one, custom element will be the factor that will help the independent floor covering retailer win over Home Depot and Lowe’s.
TF: It would seem that it would be a great advantage for a retailer to not only have its people spending less time on the phone, but the information they record would be much more accurate.
O’Reilly: There are many things that can be done better and more accurately electronically. The details involved in matching a confirmation with the original order or with an invoice make the most sense if done electronically, where field-by-field are compared automatically rather than have someone manually gazing through a stack of papers.
In most cases, that person’s time can be spent more efficiently. With electronic transfer there is no missing anything, either it matches or it doesn’t. So the quality is much better.
TF: The idea of moving to a system of transferring information electronically in the floor covering industry was really initiated by manufacturers some 15 years ago, and all the kinks have been worked out, [plus] there are lots of new bells and whistles in the system like web services. Why has B2B not moved along more rapidly?
O’Reilly: The fcB2B group has been top notch, with Pam Boe as the executive director, and Aaron Pirner and Mitch Dancik as co-presidents, and now the [World Floor Covering Association] is involved with Steve Abernathy and Scott Humphrey.
The people are there; the manufacturers are there creating the documents; the software vendors have all come to the table, and they are all creating and responding, and everyone is adding web services and associated products and processing all the specials. There are things going on all the time.
The only delay is with the retailer. The dealer needs to relate to it, understand it and see its benefits. He needs to try it. And, that’s the big holdup.
TF: What do you expect the outcome would be if one manufacturer decided to offer some kind of discount to retailers that conduct business via B2B? What would it mean to that manufacturer and what would it mean to its customers?
O’Reilly: When you’re walking the halls in Dalton and you mention that, there is a chill in the air. That has not been on the table for discussion. I frankly think that is the case because so few are using the purchase order and other electronic documents. When you buy an airline ticket online it enables consolidators to look for the best price and the cost savings they pass on are a result.
The greater the adoption [of B2B by retailers] the more you will see the manufacturers move in that direction. And as soon as one goes, they all will go.
TF: Wouldn’t the fact there was a discount available move greater adoption to B2B?
O’Reilly: The traditional discounts that have been offered: 5%, 30 days or whatever they are now. In the 1970s, one manufacturer used to offer an anticipation discount. If an invoice was paid quicker than the number of days offered for the 5%, you would get an additional percent discount. So I think if a manufacturer began offering an additional discount for an electronic purchase order it would start a fire in the industry.
There would be an advantage and a cost to the manufacturer and the success would be in the volume. If [it] just gets a handful of retailers taking an extra 1% it would be an aggravation. But if [it] had mass adoption, which is what I think the manufacturers want, I think it would definitely improve their profitability.
This needs to be a two-way street. Currently, the dealers are sucking the advantage out by using the catalog and the pricing features and not using all the other documents as they might. More need to get on the bandwagon.
Editor’s note: As mentioned, there is a great deal more to this interesting conversation than space permits. Check out the entire three-part interview, “Dev O’Reilly, CEO, Roll Master, on Outlining Retail Management Tools,” by visiting floortrendsmag.com/talkfloor and clicking on the “More Floor Radio” link.
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