If you talk to lubricant marketers often enough you will find that some are really sharp with regard to financial and operational metrics. They can quickly tell you the profit margins for any products they sell, or the money made on buy back business for any suppliers they deal with. Within seconds they can look back in time at aged receivables to determine if a customer is really worth the wait, or forward in time to see what their inventory will look like after next week's deliveries are made. In addition, they account for every penny that goes into and out of repackaging, and rarely lose sleep over charging the wrong state tax. So what makes them different?
Although in some cases they may have an MBA or be a CPA, or in one case, have a degree in Petroleum Distribution, education alone does not appear to be what makes the difference. Instead, what JW often finds is that behind these sharp lubricant distributors with a good grasp on their financials and operational metrics is typically an excellent back office system. And in many cases, JW finds that system to be VisualSupplier.
VisualSupplier is a product designed, built and sold by Rax, Inc. out of Marengo, IL. The company, which has been in business since 1997, does one thing and it reportedly does it well. They provide and support software designed for petroleum product marketers.
According to Tom Mangano, Rax's president and the chief architect behind VisualSupplier, the product is best described as a “fully integrated accounting and operational software package for wholesale distributors of lubricants and fuels.” Specifically it is designed to “address the operational and accounting needs of a distributor by providing an electronic platform to handle accounts receivable, accounts payable, and inventory management. In addition, it provides extensive reporting capabilities and a direct marketing module.”
Based on this description alone, one could easily conclude that VisualSupplier is no more than “me too” technology – simply generic accounting software reskinned by a good marketer in an attempt to make it speak to lubricant distributors. But it's not. Because if you let Mangano continue, you will bind that necessity was the mother of this invention. And it was built from the ground up specifically for lubricant and fuel distributors.
According to Mangano, there were, and continue to be, a number of vendors that offer “petroleum distribution” software packages. What he was hearing, however, before he started Rax, was that much of it was generic and had to be highly modified and pampered to make it work in lubricant distribution. And of the few products on the market that were “custom made for petroleum distribution,” much of it was designed specifically for handling fuels; and they too had to be modified and pampered to work for lubricants. In addition, Mangano notes, “many of the programs in use were written in DOS and were a challenge for lubricant distributors to use due to the often cryptic and coded language they had to learn.”
With that as a backdrop, Mangano set out to “build a back office solution for lubricant distributors that was a true Windows-based product, intuitive and user friendly, fast and flexible, and capable of changing with times and technology.”
Mangano made no assumptions about what lubricant distributors do, how they do it, or what they need. Instead, he says he “pulled up a chair and sat down side-by-side with you, the people that run the business, do the clerical work, read the reports, and sell and deliver the product at lubricant distribution companies.” He says he did this for three months and lived and breathed the challenges of double keying buy backs and the complexities of special pricing, warehouse transfers, and state taxes. He says he experienced first hand the frustration and embarrassment felt by sales reps that didn't have answers when their customers expected them to know if they received payment for the last order and if the products they now need are in stock. And he watched the teeth grinding and hand ringing of business owners that admittedly didn't “really” know how much they were making or what they were spending because their reports where months old, incomplete, or worse yet, non existent. And yes, he says he also experienced the increasing intensity of competition distributors face due to consolidation and the need this creates for “better managing costs, deploying of assets, and streamlining the business.”
In JW's view, it was the process of listening and learning about its customers' wants and needs that ultimately lead to development of a product worthy of four thumbs up. One look at the main screen of VisualSupplier is typically all it takes to drive home the point that this software is about lubricant distribution, and it's intuitive and easy to use. Rather than asking users to get used to a screen full of codes and cryptic commands and sifting through volumes of documentation, VisualSupplier has the familiar and comforting look and feel of any Windows-based program. Its icons, emoticons, and command prompts visually speak the language that lubricant distributors know. In fact, in most cases first-time users can usually take orders, pay bills, or create one of the 65 canned sales reports or 20 accounting reports on the fly, simply by pointing and clicking their way through prompts that most in this business are familiar with.
And apparently JW is not alone in its view that this product deserves four thumbs up. Within six years of developing VisualSupplier, Rax signed up 60 clients (including some of the big guns) and installed 80 systems. In addition, VisualSupplier can now electronically link up with the systems of both ExxonMobil and ConocoPhillips to provide lighting-fast payment on buy backs, without the redundancy of double keying. And according to Mangano, the capability to do the same with Valvoline and Citgo “are in the works.” Whereas other systems have come and gone, it appears that Rax's is taking root with more of the majors.
The price tag on the system is another reason why it rates four thumbs up. Rather than pricing it out of the reach of the small distributors, the price is based on the number of users. The price tab on a single user system is $3,995.00. In addition, Mangano notes that a distributor is also required to purchase a database from a third party vendor, and an annual support and upgrade contract with Rax for the first year.
According to Mangano, the most common databases used with VisualSupplier are Adaptive Server Anywhere (ASA) from Sybase (~$1,495 for a 10-user system), and Microsoft SQL Server (~$1,495 for five users). Roughly 60% of Rax's current clients went with Sybase.
The support and upgrade contract with Rax costs 20% of the purchase price of the system and provides clients with “unlimited phone support” and roughly one new system feature (upgrade) a month. “Last moth's upgrade included a process to give the distributors customers a prompt to pay discount based on gallons rather than percent,” notes Mangano. He also notes that most of the upgrades are driven by Rax's ongoing process of listening and responding to its cli ents changing business needs.
When all the dust settles and the beans are counted, a one-use3r VisualSupplier system will cost a lubricant distributor about $6,300 for the first year. Then they own it. If they want to contivue with the support and upgrade contract after the first year, they write a check to Rax for about $800 a year moving forward. But according to Mangano, one-user systems are unusual. A more typical installation will have five to ten user, which means an inventoment of $31,000 to $53,000 for the first year, respectively. After that, they too own the system and the support and upgrade contract will cost $4,000 to $8,000 a year.
Mangano agrees that cost is a big issue with distributors, and in fact, “is one of the primary reasons why astute lubricant distributors have been quick to embrace VisualSupplier.” Interestingly, however, Mangano feels it is “not the cost of VisualSupplier that ultimately sells the system, instead, it's the cost that VisualSupplier can drive out of the lubricant distributor's operations that really sells the technology.” And in Mangano's view, and that of several distributors JW spoke with recently that use the software, these costs become very apparent and much more manageable when you have a good back office system in place.
What some of our customers say…
I am really Impressed by the quality of services from Visual Supplier.
They are a wonderful company to work with and help improve all aspects of the business.
If I were designing a back office system specifically for our company, I believe that the end product would be exactly like Visual Supplier.
It’s that good for what we do.
Our Visual Supplier ERP system provides our Lubricants company with a comprehensive tool which to run our distribution business.
The unique tailoring to the Lubricants business makes it a perfect application for our multi-location operation
Love the EFT function and ease of getting information out of the system…
Very customizable, SQL interface…
Ease of use…
Support is always willing to help…
Designed for our Industry…
Evolves to meet new needs…
Continuance of improvements/upgrades…
Used several ERP platforms, but I like Visual Supplier, it’s tailored specifically to the Industry
Easy access to customer, A/P & Inventory data
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