Trimming Fat, Increasing Sales at Hughes-Peters

Distributor uses Prophet 21 solution to grow revenues by 275 percent with 10 percent increase in headcount

Distributor uses Prophet 21 solution to grow revenues by 275 percent with 10 percent increase in headcount

Yardley, PA — August 27, 2004 — Even though he is president of Hughes-Peters, a $20 million electronic equipment and supplies wholesaler, Mike Okel makes his own copies, calls on customers and occasionally runs to the warehouse to pick orders.

"It's just what distributors have had to do," Okel said. "We've had to take the fat out of our operations to survive."

Okel is using CommerceCenter, Prophet 21's Windows-based SQL Server solution for distributors, to help cut the fat by enabling him to maximize resources and increase productivity. According to Okel, CommerceCenter has helped him manage a 275 percent jump in revenue with only a 10 percent increase in headcount.

"CommerceCenter has given us the tools we need to generate more sales and gross profit dollars without correlating employee growth," Okel said.

"Because profit margins are so slim, distributors just aren't working with the same operating budgets they may have been 10 or even five years ago," said Chuck Boyle, Prophet 21 president and CEO. "As a result, they've had to make every employee as efficient as possible. CommerceCenter helps maximize employee productivity by streamlining and automating tasks."

Cable and Connectors, Relays and Switches

Recently Hughes-Peters began promoting its value-added services, and customers have responded favorably. "About 40 percent of our business now comes from kits and assemblies, yet they only made up about 10 percent of our revenue when we took over," Okel said.

CommerceCenter provides the functionality Hughes-Peters needs to stock, track and sell its assemblies, kits and related purchase and production orders. This functionality offers employees the ability to bundle items commonly sold together, eliminating the need to re-enter the same set of stock-keeping units (SKUs) over and over again.

"With CommerceCenter, we don't have to re-enter three — or 300 — part numbers each time a customer calls to request a printed circuit board kit, and the guys putting the kit together in the back don't have to go to a file cabinet to see what they need to get together," Okel said.

Plus, since Hughes-Peters can store an unlimited number of bills of materials for kits and assemblies in the solution, the company can keep records of each customer's unique requests. "CommerceCenter keeps us organized and helps us improve customer service since we don't have to ask for this information over and over again," Okel said.

Before implementing the solution, eight people in Hughes-Peter's value-add department handled $1 million worth of business. Efficiencies gained through CommerceCenter have enabled 11 people to handle $9 million in the same type of revenue. "Before CommerceCenter, we were tracking things through spreadsheets and keeping bills of materials in manila folders," Okel said. "Now we can do everything online."


CommerceCenter has helped improve other areas of Hughes-Peters. For example, thanks to customizable inventory management tools, annual turns increased more than 30 percent. "We can generate reports that help us track movement — and in a lot of cases, non-movement — so we can make sure we buy the right items, and return stock to manufacturers before it gets too old," Okel said.

Customer service has improved, too. "We've grown sales, and we're expanding our customer base, so we obviously have the tools that help us serve customers in a timely, efficient manner," he said. "We can get them answers quickly, and go out there and win business."

Okel attributes his company's success to two things: his employees and Prophet 21 CommerceCenter. "You can have the best people in the world, but if you don't give them the right tools, they won't be able to do their jobs," he said. "I'm a big results guy, and it's easy to see that CommerceCenter gives my people the tools they need to do their jobs to the best of their abilities."