Success Stories

Lumbermens Merchandising Corporation

A solid relationship with the right people

From the headquarters in Wayne, Pennsylvania, the team at Lumbermens Merchandising Corporation (LMC) are stewards of a long history of success. Leveraging buying power to negotiate competitive prices on lumber and building materials (LBM) is at the core of their 82-year business, but there is something different at its heart – a strong network of independent lumber dealers with over 1,400 locations in all 50 United States and the Bahamas. Collectively LMC Dealers generate about US$12B in sales.

The recipe for longevity and success of this member-owned LBM buying group founded in 1935 is no secret: have a vision for the business, collaborate with your dealers for growth, and maintain a razor-sharp competitive edge by building solid relationships with the right people. When it came to technology, that last ingredient guided their decision to work closely with LBMX.

A few years ago, LMC found that while their electronic data interchange (EDI) capabilities with members were adequate, scalability, however, was an issue, and there were functionalities the group wanted to better serve their stakeholders that the platform they were using simply could not deliver.

They also pinpointed another important issue. LMC wanted an EDI provider with a deep understanding of the cooperative business model, an ability to intuit what members need to run their business competitively, and a drive to consistently improve and deliver value that rivaled their own.

What LMC needed was a solid relationship with the right people.

This is their journey to EDI with LBMX.

Where they were – Before EDI with LBMX

EDI technology is not new to LMC. The group has been exchanging data electronically with their members since the 2000s, and the capability has become a highly-valued essential service. But as LMC’s technology coordinator and project team lead Lova Fitchett explains, the original provider, though a good fit initially, could not keep up with LMC’s growing needs.

Take invoice search capabilities as an example, easily the biggest pain point for LMC members. The group processes a staggering 6,500 invoices every day. Search functions for that kind of volume must be comprehensive, efficient, and simple.

LMC was also looking to add functionalities like the ability to click and choose invoices to be paid; single sign-on capabilities to avoid the dreaded I’ve-forgotten-my-password calls; and a great user experience. All of it underpinned by the desire to work with a provider who understood members’ needs and LMC’s business.

Right away, they knew what we were looking for. We would ask about something from our requirements list and the response was: We understand completely...and we have the solution.

Making the right choice – Why EDI with LBMX

From the initial August 2013 meeting with key members of the team, LMC learned there was something different about LBMX. Customizations were now built in. The list of must-haves developed in preparation for the search – automated document acknowledgements; workflow development expertise; single sign-on; a robust search function for the document repository – were already in place or hardly an issue to develop. Plus LBMX immediately eased their concerns that working with the existing EDI platform while integrating new features and capabilities would be smooth and seamless.

Returning to LMC’s recipe for longevity and success, it became apparent LBMX, who exclusively serve buying groups and cooperatives, could deliver intangible benefits where others fell short. Says Lova, “Right away, they knew what we were looking for. We would ask about something from our requirements list and the response was ‘We understand completely…and we have the solution.'”

Eric Barsamian, LMC’s Director of IT, builds on that sentiment and offers LBMX took the time to ask questions about the most important customer: their members. During a thorough day-long discovery session, “while they wanted to know about our team’s use of the technology and our processes,” says Eric, “they made sure to explore how our members would be impacted as well.” From his perspective, that kind of inquiry was LBMX making sure “they could deliver what they were promising.”

“Giving our EDI and industry expertise its due, LBMX’s strength also comes from the technology we provide that empowers buying groups to deliver value to their members,” explains Steve Seguin, the company’s Vice President of Products. “We understand that enabling electronic invoices and other documents is simply the starting point for a host of other value-added services a group can offer its members.”

There is another enormous benefit to LMC engaging LBMX for their EDI, and in an area that has vast capacity for calm or chaos: Security – arguably the biggest anxiety in the online world. Steve is emphatic that “security and privacy are primary concerns for every one of our customers and we continuously dedicate time and expertise to their development on our platform.”

The Solution

Processing well over 1.6 million invoices a year means LBMX’s fourth-generation Document Centre played a key role in the solution for LMC as the brand new EDI platform between the group and its members. In a single, safe and highly secure Web portal, member invoices, account and remittance advice statements are stored, archived, and much easier to retrieve.

Customizations and modifications were a matter of course for the implementation team, and most of the backend work took place over three months in late 2015. Once live in February 2016, members were given two months to engage with the new LBMX Document Centre before the April 1 shutdown of the previous system’s document repository. To help facilitate the transition, LMC held a series of education webinars on using the new system, and offered a library of how-to videos. Two thirds of members proactively engaged with the new system prior to the deadline. A full court press on member outreach onboarded the remaining one third who, not surprisingly, tells Lova, “found the system very intuitive and not at all difficult to use.”

Right away, they knew what we were looking for. We would ask about something from our requirements list and the response was: We understand completely...and we have the solution.

Where they are now – After EDI with LBMX

The LBMX Document Centre now allows LMC members to search invoices in one location using many different criteria such as supplier name and purchase order numbers as far back as two years, cutting down their search time. Moreover, the new platform’s open report capabilities allow dealers to click the statements they would like to pay against as opposed to manually rekeying the amounts, thereby reducing errors.

Rather than simply rely on anecdotes or one-off insights, LMC formalized user feedback by issuing a survey to a cross-section of members to learn firsthand how they rated the LBMX Document Center. The reviews of the new system were positive, with the highest praise offered by long-tenured members. This came as no surprise to Lova. “They worked with the old system and could recall how painful it was.”

The upshot is the care, thought and hard work invested in choosing a platform and a strategic technology partner in LBMX paid off in spades for LMC: their members were pleased.

Where they will go – The future with EDI by LBMX

The Document Centre offered robustness other solutions did not, and a host of other functionalities LMC can grow into, so there is still a good amount of development runway with LBMX. Any additional customizations and enhancements LMC would like to see implemented are well within the scope of what LBMX can do, and their dedication to consistently evolving their technology means delivering new functionalities.

Some LMC members have already engaged LBMX of their own accord to connect the Document Center with their own point of sale systems, making for huge gains in accuracy, efficiency and transparency into their business. There is hope word will spread among this tight-knit group and more members will follow suit.

Returning to the idea of being stewards during a long history of success, working with LBMX has allowed LMC to boost their EDI capabilities, have clear visibility into what is happening in their coop on a day-to-day basis, and most importantly, reduce errors and headaches in their business.