Software for Recyclers

Do you know where all your containers are right now? Do you know what happened 10 minutes ago at your scales? Do you know whether you made or lost money today?
   If you answered no to any of those questions, your computer system and software aren’t as good as they could or should be.
   According to many software suppliers, the scrap recycling industry continues to be extensively under-computerized. Some estimate that as much as 60 to 70 percent of the 3,000-plus scrap processing companies in North America may not have the up-to-date systems and dedicated software in place to run their operations from the computer keyboard.
   “The recycling industry is one of the most under-automated businesses out there in terms of computerization,” says Larry Smith, executive vice president and part owner of Shared Logic Group Inc. (Holland, Ohio), a recycling software provider. “Traditionally, most of the money that gets spent goes for heavy equipment such as cranes or shredders—the equipment a business needs to actually process and move scrap.”
   Increasingly, though, scrap companies are realizing that a well-designed computer system and software package are the minimum prerequisite for operating a competitive business. “It’s impossible to run a business of any size today without a proper computer system,” asserts Larry Galbraith, vice president of Klarmann & Partner Inc. (Audubon, Pa.), another recycling software vendor.
   It’s not enough, though, to simply have a PC and off-the-shelf accounting program. Scrimping on a system could end up costing you a bundle due to inefficiency and lost time.
   But what constitutes an adequate computer system? And which one is right for your company? It depends, of course, on the size and complexity of your business, among other factors.

A Range of Choices and Prices
In the beginning, recyclers’ software choices were limited.
   Sure, there were business management systems on the market, but very few were designed specifically for the scrap processing industry. Companies able to afford it often developed their own homegrown systems or hired software consultants to design products to suit their needs. This could be an expensive approach, particularly as some of the resulting programs were only as adaptable as the hardware and technology they were designed around.
   As with so many aspects of the computer industry, obsolescence was a constant problem. Some companies hastened this trend by simply outgrowing their systems. Expanding a homegrown or outmoded system wasn’t always possible or even desirable. In addition, in the consolidation wave that has swept the scrap industry, many quickly expanding companies found themselves saddled with two or three separate and incompatible systems. In this case, a decision often had to be made about which system would prevail as the company standard.
“Individual programs specific to a single company were written all the time,” says Smith. “Then the program writer would move on and the system could never be modified—it was unsupported. It’s very common for me to encounter customized systems that a client wants to modify but can’t.” Such hybrid systems normally must be completely replaced, he says.
   Fortunately, times have changed for the better. Today, there are many recycling-specific software programs available, and they’re more flexible and affordable than ever before. As a general rule, early system suppliers often targeted a limited number of large end-users requiring a host of special features, and their systems were priced accordingly. 
   Now, prices vary considerably based on customer requirements. Prices for the most comprehensive systems begin in the $30,000 to $50,000 range, but software cost normally increases in direct proportion to the number of users on the system. It isn’t unusual for a large company with many users and locations to require a system costing upward of $100,000.
   A system is generally expanded not by altering the software but by increasing the number of users on the system. The cost of expanding a system is therefore usually predicated on the number of users. Some providers prefer to expand usage of a system in modules of several users at a time. Once a basic software system has been purchased, it will generally cost less than $3,000 per additional user to expand an existing system.

Getting a Good System
While most major scrap processors already have state-of-the-art systems, some of the largest have recently purchased new systems or revamped their old ones.
   Most software providers, however, note that their newest customers are increasingly small-to-medium-sized firms. Since the mid-1990s, an identifiable trend has emerged favoring simplified, more cost-effective systems for such operations. A number of recycling software packages are now available or will soon be released in a price range of $10,000 to $20,000. These systems are usually geared for businesses with one or two locations and no more than five users.
   “A lot of companies are finally getting around to making this decision,” says Smith. “The response I’m getting from some people is that they’re not ready for this kind of purchase just yet, but they realize they’ve got to do it sooner or later.” 
   As for the features of recycling software programs, there seems to be no end to the number of bells and whistles that can be included. In general, however, most suppliers agree that a good system should include such functions as:
•  scale receiving and dispatching;
•  purchase contract, pricing, and brokerage capability;
•  vehicle and container tracking and management;
•  inventory management;
•  production and processing batch control;
•  payment and accounting ability;
•  sales management; and
•  billing capability.
   A good system might also include such special features as equipment maintenance schedules and spare parts data, a freight rate database, multi-language and currency capabilities, and labor management functions such as payroll.
   Some system suppliers insist that a general ledger accounting package should be built into a system, while others say customers should have the freedom to choose their own accounting regimen. “When we talk with prospective customers, we ask them whether they have a network in place now and whether they have a general ledger system accounting package or not,” says Galbraith. “Some of our customers have up-to-date accounting systems they’re happy with now.”
   Initially, some recycling software companies also supplied and supported the hardware required to run their products. This is rarely the case today. Almost all system suppliers provide trouble-shooting support for their own products, however, and some offer to assist a customer in procuring the right hardware to meet their needs.
   One other important point to note is that the majority of scrap software products on the market are oriented toward metal recycling. As many scrap recyclers diversify into other related businesses, however, software providers are increasingly moving to modify their systems to address this trend. Some vendors already provide products for a variety of businesses. One software firm has already modified its metals-oriented system to allow for the handling of other materials.

Meet the Players 
When you’re in the market for recycling-specific software, who can you call? The following profiles introduce you to the leading vendors in this specialized niche. (For contact information on these vendors, see “Get Your Software Here” above.)
   Business Automation Inc. (BAI): This Orange, Calif., firm developed its core business management software system in 1975 and produced its Recycle-Pro product specifically for the metal recycling industry in 1990. The product, which is available in Windows NT and UNIX versions, can be adapted to a wide range of mid-sized to larger scrap processing operations.
   Two factors distinguish BAI’s product from that of most rivals. The first is that the system is particularly well-suited to a specific niche, namely companies involved in both metal recycling and smelting. The company has four U.S. customers, each having 24 to 48 users on their systems. All are involved in both recycling and smelting. A number of major metal companies are currently in the demo stage with the system. The second distinguishing factor is that BAI provides and supports hardware and training.
  Recycle-Pro is designed in modules that can be added at will to achieve the functions desired by the customer. The most likely customer for the product will have at least eight users, and the system is easily expandable to accommodate a business of virtually any size. A general ledger is included. BAI also offers to modify or customize its system to the specific needs of each customer.
   COM-TRAC: Traders have software needs that differ from those of the scrap processor. COM-TRAC, a software product tailored specifically for scrap trading, was developed in-house by International Alloys Inc., a metal trading firm in Florham Park, N.J., and Synergy Data Inc., a software development company.
   The system contains modules that allow easy-to-use electronic management of all trading functions. The user is able to do everything from the keyboard—from keeping track of customer quotations to tracking shipments and freight costs. The product provides user-friendly modules that allow buyer and seller information to be quickly cross-referenced, according to Larry Schipper, president.
   “Let’s say I want to buy some mixed low-copper clips and I have a price from a potential buyer that I think is good,” Schipper explains. “I click on the appropriate topic and the screen shows me everyone I’ve spoken with about this product. Clicking on their name, I see a profile for each customer, including quote history and latest contract information.”
   Every quote made is archived by the system. This has allowed International Alloys to assemble quote histories as well as freight rate information stretching back 15 years. A tracking module maintains long and short trading positions, providing the ability to match up and create back-to-back positions. Reports can be generated by the system at any stage to track the entire transaction. Another module automatically posts activity to an accounting module.
   “We designed the system so you don’t need computer experience to use it,” Schipper states. “We’ve tried to make it generic enough to be used for any kind of physical commodity buying and selling.” A complete COM-TRAC system costs $14,000 for a four-trader installation. For special applications, COM-TRAC can be ordered in individual modules. Discounts are available for larger systems and for multiple locations.
   Four Lakes Business Systems Inc.: The Recycling System (RMSWIN) software package by Madison, Wis.-based Four Lakes has been on the market for more than a decade. A modular product compatible with DOS, Windows, and UNIX databases, it was designed by people already in the scrap recycling sector.
   RMSWIN automates daily accounting and management information needs for the scrap operator and is designed so that it can be implemented in stages. The advantage of the system is that the user has the added flexibility of purchasing the modules together or separately as needed. The primary module of the system lets the customer automate buying and selling functions and provides historical data on transactions by customer and commodity. The module interfaces with other modules as they’re added. 
   Klarmann & Partner Inc.: This Audubon, Pa., software provider—the North American arm of Klarmann & Partner GmbH in Germany—markets its RECY system through Scrap Advantage L.L.C. (San Jose, Calif.), a value-added reseller. RECY was developed in Europe specifically for the scrap industry. The product has evolved through five major rewrites over 15 years to keep the software up-to-date with the latest computer technology. The current version was written in Progress to incorporate graphical user interfaces and a relational database.
   RECY is an enterprise-level system that covers the full cycle of scrap operations. It provides a suite of management reports to instantly monitor local activities as well as remote locations. The system includes functions for supplier and consumer management, contracting, multitier price setting, scale operations, cash payments, settlements and invoicing, claims and adjustments, and inventories. RECY is used by a broad range of customers from small, single-site operations to large clients with many facilities in different regions. The company also has software products for dismantling as well as truck scheduling.
   The Klarmann system has captured a sizable client base in Europe. Scrap Advantage, staffed with individuals who have many years of experience in the scrap industry, provides installation consulting, training, and ongoing hotline support.
   Mayer Information Technology Ltd. (MIT): A major new entrant to the market, MIT’s software product was originally developed in-house over a period of four years by Mayer Parry Recycling Ltd., a U.K. scrap processor. The company eventually opted to offer the system on the open market. 
   MIT was set up at the beginning of 1999 to market the system in North America. Earlier this year, MIT—now based in Markham, Ontario—became an independent company when Mayer Parry was acquired by European Metal Recycling Ltd. 
   Widely in use at Mayer Parry, the MIT system has now been sold to at least seven other customers. These include some of the largest companies in the North American scrap business, including Metal Management Inc., Commercial Metals Co., American Iron & Metal Co. Inc., Gallatin Steel Co., and Co-Steel Inc. MIT is also in the process of developing a system for smaller users, however. Customers will reportedly be able to download the smaller system directly from the Web.
   MIT’s system is a completely open database product that can work with any platform the customer owns, which is one of the most important strengths of the product, says Rob Horan, president.
   The system does not provide a general ledger function, however. “We’re not financial systems specialists and don’t want to be a jack-of-all-trades-but-master-of-none,’” Horan explains. “There are many good systems out there to choose from. Our concentration is scrap management. Many of our big customers already have a system or know what they want.”
MIT’s new smaller system, being designed for no more than 10 users, may include a financial package, however, Horan adds. The company is shooting to have the product ready in August.
   ScrapWare Corp.: A relatively new player in the market, ScrapWare (Gaithersburg, Md.) introduced a competitively priced software product three years ago that was designed from inception to be used for scrap operation management. The system, dubbed ScrapWare2000, is written in Oracle, the fourth-generation global standard SQL database. The company doesn’t incorporate a general ledger into its product, preferring to let customers select their own. Smaller companies can choose an even more cost-effective, single-user version known as ScrapWare2000 LT. 
   The ScrapWare product stresses simplicity yet allows the user to easily administer operations across multiple-yard or multiple-company formats. Data can be reported in a variety of formats, such as yard by yard or company by company. ScrapWare2000 also allows users to create their own reports by using third-party report writers.
   ScrapWare has an international customer base. The company offers customized features for its software to suit individual users. In addition, the firm says it stresses superior customer support.
   Shared Logic Group Inc.: Shared Logic has been supplying software to the recycling industry for 19 years and, as a result, has a large share of the North American market, claiming more than 350 site installations of its software.
   “We exclusively address the recycling industry. It’s the only thing we do,” says Larry Smith, who stresses the need for a dedicated software system. “It’s not the same thing just to have a PC and an accounting package. Most people have that.”
Smith says a software system should be able to provide a certain number of basics to be of use to a scrap processor. These include purchasing and sales management capability; a totally integrated accounting system; vehicle and container dispatch and tracking; inventory management and maintenance functions; and the ability to manage the activity at the scale and during processing.
   “All of these functions are really where the bulk of our customers’ requirements are,” he says. “And all of that has to be seamlessly integrated with an accounting system, covering general ledger, accounts payable, and accounts receivable.”
   Shared Logic recently spent four years rewriting its system to make it a true Windows-based product, introducing its improved system about two years ago. Smith said the company’s software was designed to function with many of the popular databases now in use.
   “The majority of users are using the NT database,” he says, noting, “We didn’t want to limit our customers to that platform, though.” He adds that customers can get extensive support from Shared Logic over the Internet, including the ability to download system modifications online.
   Systems Alternatives International L.L.C. (SAI): Since its founding in 1982, SAI has made the recycling industry its core business. Based in Maumee, Ohio, the company currently supports scrap business management software at more than 90 firms, representing 495 locations worldwide. Many of its customers are mid-sized or larger companies with multiple sites. 
   SAI offers a full complement of software, hardware, training, installation, support, analysis, and programming, as well as consulting services for processors, brokers, and mills. SAI has also branched out from traditional business software to add process control equipment and engineering solutions. 
   Today, SAI is developing advanced software for both UNIX and NT, running on PCs or large business servers; Web-based processor-broker-mill systems; and optional integration with ERP financial systems. The company also offers its customers advanced help-desk solutions such as automated service-call tracking and project management, including planned Web-based customer collaboration.

Connecting the Industry
In the past few years, recycling software vendors have faced both good and bad trends. On the one hand, fears about Y2K translated into brisk business for some in early 1999 but led to a standstill as the year ended.
Consolidation has reduced the available pool of customers to a certain extent, but the consensus seems to be that the increasing need to automate and remain competitive will eventually pressure most recyclers to take the plunge and buy a software system.
   Then there were the low scrap prices of 1998 and early 1999, which prompted recyclers to trim back their purchases of many items, including software. One vendor reports little demand lately for mid-size or larger systems. Most vendors, however, note that interest in software systems has picked up this year, particularly among smaller recycling companies.
   “It’s hard to figure out sometimes exactly what motivates a company to buy a software package,” says Shared Logic’s Larry Smith. “We’ve seen some companies buy a computer system precisely because it was a slow market. We saw a significant increase in business in the first quarter.”
   Smith expects this uptrend to continue, adding that the larger companies are always actively looking to update, expand, integrate, or improve their systems. Meanwhile, most business for software in the near term is likely to come from the small-to-mid-sized companies, he says.
   “I agree there’s a huge market out there,” adds MIT’s Rob Horan. “Certainly, this is true among the smaller operators. And we have products ready for them.” •

Get Your Software Here
The following nine firms provide software programs designed specifically for the scrap recycling industry.

Business Automation Inc.  714/998-6600 (fax, 714/998-6170) or 704/857-8744 (fax, 704/857-8738) www.baipro.com
COM-TRAC 973/966-6600, ext. 15 (fax, 973/966-1837) www.com-trac.com
Four Lakes Business Systems Inc. 608/221-2633 (fax, 608/221-2650) www.flbs.com
Klarmann & Partner Inc. 610/630-3680 (fax, 610/630-3685) www.k-p.com
Mayer Information Technology Ltd. 905/943-7733 (fax, 905/943-7668) www.mayerglobal.com 
Scrap Advantage L.L.C. (value-added reseller for Klarmann & Partner) 408/501-2075 (fax, 408/436-6008) www.scrapadvantage.com
ScrapWare Corp. 301/208-7100 (fax, 301/208-7060) www.scrapware.com
Shared Logic Group Inc. 419/865-0083 (fax, 419/865-0964) www.sharedlogic.com
Systems Alternatives International L.L.C.  419/891-1100 (fax, 419/891-1045) www.sysalt.com