Interview with our CEO

Tim Trefry was interviewed regarding F.R.O.G.'s computer solutions for the furniture industry. The following is the transcript of that interview.

Question:
In your opinion, what are the three biggest challenges facing furniture retailers, as we move further into the millennium?

Answer:
The biggest challenge in the home furnishings industry is to attract consumers, and to encourage people to make furnishing their homes an ongoing process. The next biggest challenge is to continue growth within their organization, and to expand the abilities of their own people. Because the industry underpays employees, retailers often end up hiring inexperienced people. We must learn to train at every level, and not just sometimes, but all the time.  Third, our systems must have built in training tools for every employee.  We need to guide them, and help them do the right job.  Today, I'm afraid they simply do what they think they should do, or worse yet, they do what they want to do.

Question:
What are the most important aspects of a software management system?

Answer:
Control!  The most valuable result of a good system, is knowing what new business came in today, and what orders need to be handled today.  We need to know what inventory needs repair, and which customers need to be called.  We need to know what deliveries need to be prepared, and which products needs to be ordered.  We need to know which bills need to be paid, and where we stand on profit or loss.  We need to know all of this without paper.  We have to be able to control the flow of the business.  If we can achieve that, then surprises will be limited, and we will be ready for new business.  This will allow us to gain the competitive advantage.

We need to be in a constant state of readiness.  We need to be ready to do business.  For instance, on Saturday afternoon, we have to be able to take the next deal properly or we'll spill. Our industry has performed so poorly over the last thirty years, that it still spills on Saturday afternoon.  The purpose of a computer system, is to give you control of the situation.  We need to ask what needs to be done today, and what wasn't done yesterday?  Control the promotions and the advertising.  Control the pricing, the inventory, and the expenditures.  Operate the controls throughout the system, so that they become an ever-present part of the business in every area.  Let the employees share in the fact that the controls are present, and share in the responsibility to maintain those controls.  Give the retailer the freedom to sell furniture on the spur of the moment all of the time.

Question:
Why is it that so many retailers are frustrated with their existing software systems?  Non F.R.O.G. users of course.

Answer:
One huge reason is that programmers don't think like retailers, and vise versa.  When a programmer says you can do that, it might mean you have go to five screens and type for six minutes.  When a retailer needs to do something, it has to be quick and easy, or he won't do it on the system.  That leads to a piece of paper, and that's the least efficient way to do things.

I also think that retailers are frustrated with every form of administration. I don't think it matters whether they have a software system, a paper system, or a state-of-the-art system.  The frustration is more about the administrative thought process.  Most retailers like to be on the advertising and merchandising side of the business.  That's where the excitement is.  That's where the gratification is.  That's where their peers tell them they're great.  The mundane side of the business is the fact that they have to handle it, deliver it, account for it, collect for it, and pay for it.  That's where software takes a hit. It's often been referred to as the backside of the business.  You'll see, in the future, that companies like ours will absorb so much of that burden, that the retailer will begin to gravitate to us much like they gravitate to their lawyer and accountant today.

Question:
Many retailers did not grow up with computers.  How much do you have to know to use them effectively in business?

Answer:
Well, that depends on where they get their computer, and what they do with it.  For the most part our customers don't have to know anything about computers, but they do have to be willing to learn the mechanics of why their computer needs electricity, and the value of a dependable and constant  power supply to the system, so that it's not being browned out, or shut off in mid-use. It's much like their need to know how the engine works in the delivery truck.  They need to know whether or not it's maintained and properly handled, but they'll never need to know how it works.  Functionality is the key.  If they spend the time buying the system that does what they need it to do, they'll know who to call, and that should be the limit.  At F.R.O.G., we give our customers the option of learning as much, or as little, as they want to about computers and software.

Question:
How long does it take from the initial purchase of a software system to getting online?

Answer:
There is a pattern for sure, and the pattern is determined by the project itself.  If you are on an existing system, and you can convert information from that system that has value, then you can greatly reduce time.  The way we handle installations at F.R.O.G., is that we look at a forty-five day period of time from the day the foundation is ready.  That's the variable to us.  The foundation is a complete repertoire of the inventory, so that we know every item, every cost, and every location.  We know that inventory. When we know the inventory, that's the "go" point, and forty-five days after that we want to be able to hand someone a balance sheet and income statement that's meaningful.

Question:
Furniture retailers that are in a growth mode have many challenges. What are some of the things that you advise your clients to watch out for?

Answer:
That's an area in which we've had a lot of experience.  During the last six years, we have had at least twenty-five companies experience over five hundred percent growth.  So, some things are working, and they are working right.  However, the challenges continue to come.  First of all, we find that retailers who pass certain barriers, run into stonewalls every time. A single person who runs a furniture business, and who crosses 2.5 million in sales has to have other people involved in management.  An organization that crosses 5 million in volume, has to start to division, or departmentalize.  An organization that crosses 10 million in sales will have to bring in someone from the outside, and give them an executive position.  This is often relevant, because many furniture stores are family owned and operated, and the need to bring in outside people is an inevitable result of growth.  These are things that are constantly happening, so, personnel is the number one challenge.

You also run into space requirements with your material handling, racking and bin inventory systems. You run into paper flow problems because of the sheer volume of paper flows.  You run into cash constraints.  Growth brings on an incredible use of the cash you have.  The overhead increases, the purchasing increases, and customers continue to be the ones to pay late, or slow.  The issue is, that all of this is repetitive throughout the organization, because the ripple effects of growth involve all of your people.  What can I expect in this growth area?  How can I pay my commission people?  I'm opening a new store.  Should I change the way my commission structure works?  What are other people doing?

As the retailer grows, they realize what they don't know.  The growth of any business presents it's challenges, but good software doesn't feel growth.  It's just the same old software doing the same old job, with the same old happy ending.  Good software doesn't feel growth.  You just get bigger hardware.

Question:
How does a retailer work on their business, instead of in their business, when it just doesn't seem as though there are enough hours in the day?

Answer:
Well, that's a hard question, because when you're there it's hard to hear the answer.  I work in my own business, and I know what happens when things get frantic, when they get overwhelming. Problems, should be solved as soon as they come up.  You don't want to keep them around.  I do believe the secret to good business is straightforward and brief.  The secret to good business is to be prepared.  If your organization is ready you'll know it.  If it's not, you will know it.  Always strive to be ready.  The secret for the retailer is to look at the time consuming issues.  Relieve those first.  They might not be the biggest issues, but they may be delaying the solutions to the bigger issues.  Look at the time consumers, look at the things that are chewing up your day. Look at the confusing issues.  Confusion will stop someone dead in their tracks.  Experts agree that if you give me a mission that I can't complete, you just took up a section of my brain for the rest of the day.  Give me five or six of these, and I become unproductive.  So, I think what a retailer has to do, is solve the big problems. They have to be the one to direct their people to the solution.  They have to say, "this is causing the problem, lets work on it, lets do something about it."  I can tell any retailer with confidence, that the best way to solve any problem or function, is to do it yourself.  Go do it for half a day, if that's all you can spare.  Be there, feel it, let the people who work with it share with you what they think is the best way.  Solve the problem from the perspective of being in it, and your solutions will last longer.  You'll have more knowledge yourself, so when the other issues come up, you can say "well lets don't impact another area," and you will gain a broader base.

Question:
Do you believe that some retailers expect a software system to do more than it's capable of?

Answer:
I think that when an entrepreneur thinks of a product like software, that has a high dollar value, and is heavily promoted from all of the trade shows, down to the local newspaper, it's very natural to have many expectations. Once a retailer starts to develop a true understanding of what software is, they will understand it's capabilities as well as it's limitations.  I believe that part of our job is to help the retailer gain that understanding.  Just by the nature of the word software, you are basically talking about something that could be changed, or something that could be created.  You're talking about the soft part of the computer that is pliable, flexible, and maneuverable.  The possibilities are incredible, but it's important to remember that your software system should empower you to take control of your business.  You have to direct the system. Retailers expectations today will drive the industry tomorrow.

Question:
You have a very strong background in warehousing and delivery.  What can you tell about a company by reviewing those departments?

Answer:
I have always said "stand on the dock of a furniture business for one day, and you'll know more about the business than most of the people who work in the stores' management, and in sales." The simple truth is, that as you watch goods go in and out, you'll know the mix of merchandise being sold.  You will see the disciplines in loading and unloading the truck. You'll know the warehouse management style as you watch returns come back.  You will know the thoroughness of the detail side of the organization.

For instance, what's a "not at home" to the furniture industry?  It's another $57.50 wasted.  Why do most of them happen?  There are two major reasons.  Either the invoice was written incorrectly, or nobody informed the customer of the correct time frame, or C.O.D. amount.  So as you stand on the dock you'll notice the disciplines, the product, the style of management.  In almost every furniture warehouse you'll notice what's often referred to as "the bone yard."  This is all of the broken, damaged, returned or in need of repair goods.  All of this will collect.  You will notice if the aisles are clean, and if the upholstery is wrapped.  You'll notice the kind of things that will cause a retailer to make money or lose money.  You'll also notice the kind of comfort a customer might have shopping there.  If you stand on the showroom floor, you can easily be deceived in a clever gallery, but when you stand on the dock, the organization bares itself to you, and you see it all.

Question:
What makes Furniture Retail Operations Group Different from other software providers.

Answer:
The number one thing that makes us different is that we're furniture people.  We started in the furniture industry.  We have experienced some of the best software and organizations, and we saw a better way.  Before we started in this business, we felt what was important was to address the retailers' needs at the detail level.  Most of the competing software packages have been written by programmers, or written by people who hired programmers.  I can tell you that a programmer thinks in a very detailed way, but that thought process has to be able to be translated to people who aren't used to thinking in computer language.  They have to know that if they're going to pick a route to get the trucks ready for delivery tomorrow, they have to pick the inventory.  Our system has the computer say "pick" and then ask "what day?"  If they enter tomorrow's date, they get a list in rack and bin order.  You can't force people to make computer logic decisions.  Our goal is to make it as simple as possible, and to have software that directly meets the needs of the staff.  I think here at F.R.O.G., what makes us different is that we're in it with our customers and their employees.  In many cases, we can customize programs to get special reports that management may want.  It's just a matter of us setting up a software package that does exactly what they want it to do. We didn't come out with this package and say, "we're through now, it will run itself."  We learn a great deal from our customers, and we work in tandem with them to improve and add to our system.  We have learned that we grow with our customers successes, as we work together towards a common goal.  That's what makes us different.