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Cargo Firm Looks to Keep Pace

SPECIAL TO THE TIMES

Gary Satterlee’s warehouse was so full he was forced to turn away business--a sign that it was time to expand and upgrade his company, Harbor Division Inc.

Satterlee leased a 148,000-square-foot facility that will more than double space, and committed tens of thousands of dollars to a technology overhaul of the company, which hauls and warehouses cargo from the ports of Los Angeles and Long Beach.

For the record:

12:00 AM, Mar. 15, 2000 For the Record
Los Angeles Times Wednesday March 15, 2000 Home Edition Business Part C Page 9 Financial Desk 1 inches; 24 words Type of Material: Correction
The city where Harbor Division Inc. is moving was misidentified in last Wednesday’s Business Make-Over. The company will be headquartered in Wilmington after Monday.

Satterlee admits that, like the move to bigger facilities in Rancho Dominguez, the technology make-over is overdue.

Harbor Division’s operations system is antiquated and way behind its competitors. The company has only eight outdated PCs that are not networked to help operate a business with 20 full-time employees and 40 trucking contractors handling 100 to 150 shipments daily. There is no companywide computerized system to check inventories and product availability, handle dispatch, accounting and data transfer from customs brokers and steamship lines. The latter is key to timing pickup and delivery of freight on the docks. Instead, Harbor Division relies on a system of faxes, phone calls and manual labor.

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“I saw this move as a way to step up to the technological plate,” said Satterlee, who is expecting the company to grow 20% this year from $5 million in revenue in 1999. “My goal is to have everyone operating as a unit.”

The heart of Harbor Division’s problem, said business consultant Nader Kheyrdan of CCI Industries in Fullerton, is that it lacks an integrated system that can track everything. The solution involves more than just putting in new computers or networking the machines. Satterlee needs to find one software system that can help with most of his day-to-day operations, from dispatch to accounts receivable, accounts payable and inventory control.

The company’s growth is stymied because too many tasks are now done manually, Kheyrdan adds. For instance, to invoice a customer, employees must physically match orders with the warehouse inventory rather than simply pointing and clicking. Employees often do not have up-to-date information. Revenue easily could be doubled with an integrated system, Kheyrdan said.

One difficulty, though, is that Harbor Division is in an industry that has specific, yet wide-ranging, needs. It’s not as if Satterlee can go to any manufacturer and plunk down $3,000 to $10,000 for off-the-shelf software, says Kheyrdan.

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One company that offers this industry-specific software is Worth, Ill.-based Analysis Inc., makers of CATOC, says Satterlee.

Kheyrdan agrees that Satterlee should take a close look at the CATOC software to see if it is capable of handling his needs.

“Usually the rule of thumb is, if you find software that gives you 80% of what you need, for the rest [of your needs] you may be able to change your business process or make modifications to the software,” he said.

Harbor Division, Kheyrdan says, should look for software that offers basic accounts receivable, accounts payable and general ledger capabilities. Then, for the trucking and dispatching side, other applications could be integrated.

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The company needs a local area network with a server that will store data and software applications. The server is linked to individual computer terminals that can access the information and applications as needed.

A computerized tracking system will be especially important in the new facility, says Satterlee. The operation will include six acres for storage of full containers for companies that demand just-in-time-delivery of products.

A variety of systems are on the market that serve similar needs, but here are Kheyrdan’s specific suggestions for Harbor Division:

* Compaq ProLiant server with 550mhz processors, 256mb memory, RAID-5 capability with a minimum of three hot-plug hard drives and internal DAT (digital audio tape) backup. Such a system would have enough power and storage capability to tend to everything from customer information and invoices to inventory tracking and dispatch applications software. The RAID-5 system with three hot-plug hard drives provides backup should one hard drive fail. The internal DAT copies what’s in the system daily, insuring that no data is lost or service interrupted if there are system problems.

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* Microsoft BackOffice Server for Small Business, which includes NT 4.0 technology as the operating system running on the server, integrated Office 2000 (Word, Excel, Power Point etc.), Microsoft Exchange for internal and external e-mail communications, SQL 7.0 Database, Microsoft Proxy Server for Internet access, Microsoft Fax and Modem Sharing. Using this platform for computer operations will provide enough security that necessary information can remain private, but also allow the individual computers to interact and share information and data as needed.

* 15 workstations running on a unified operating system. The workstations would be of the same brand, make, model and configuration to make maintenance and employee training as easy as possible.

* Companywide e-mail (internal and external) for easy electronic transfer of information. Kheyrdan suggested Microsoft Exchange, which is part of BackOffice, because of its compatibility with the NT operating system.

* Companywide Internet access through a Microsoft proxy server and DSL line. The proxy server can protect the internal network from the outside world and manage internal access to the Internet.

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And, adds Kheyrdan, Satterlee should consider revamping his Web site to allow customers to place orders and check inventory online.

Kheyrdan estimates the total cost for the technology make-over at $70,000 to $100,000. Also, the additional cost of support and service for the new system must be considered. Over five years, that probably will equal the initial investment.

And finally, Kheyrdan said, employees must be a part of the process, too. “You have to get them involved . . . in choosing the solutions,” he said. “There will be less resistance [and] you will have a better success rate.”

*

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If you would like your company to be considered for a future Business Make-Over, you can now download or print an application online at https://www.latimes.com/bizmakeform. Or you can write to Business Make-Overs care of Karen E. Klein, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

This Week’s Company Make-Over

* Name: Harbor Division Inc.

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* Headquarters: Rancho Dominguez

* Type of Business: Trucking and warehousing company serving ports of Los Angeles and Long Beach

* Status: Corporation

* Owner: Gary Satterlee

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* Founded: August 1986

* Start-Up Financing: $35,000 from family

* 1999 Gross Revenue: $5 million

* Outstanding Loans: $0

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* Employees: 20 full-time, plus 40 trucking contractors

Main Business Problem

Needs technology make-over.

Business Goal

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Streamline operations with an integrated and networked computer system.

Recommendations

Purchase an integrated server-based computer system with enough capacity and processing capabilities to connect and network 15 to 20 people and support multiple applications at the same time. Server system should have RAID-5 technology with a minimum of three hard drives as a backup. Use one uniform operating system. Purchase the same kinds of PCs to make training easier and hold down support costs.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

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Meet the Consultant

Nader Kheyrdan is president and chief executive of CCI Industries Inc., an information technology company in Fullerton that he founded 12 years ago. He also teaches electronic-commerce applications at Cal State Fullerton.


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