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Partners in progress.

Partners in Progress Magic Valley forges bond with software vendor.

When Dick and Sue Burwell, owners of Magic Valley Distributing, began looking into computerization in the early '80s, their first step was to visit a trio of wholesalers in Boise, ID, about 120 miles northwest of their Twin Falls, ID, distributorship.

All had impressive computer systems, but none were exactly what the Burwells needed. They operated around mainframe computers, and thus were a bit pricey - in the $300,000 to $500,000 range.

A couple of months later, the Burwells received a mailing from Micro Vane, Inc., a virtual start-up software developer in Kalamazoo, MI. At the time, Micro Vane had only two customers, both of them in Michigan.

Still, the Burwells were intrigued enough by the direct-mail piece about Micro Vane's dBEV software to investigate further. They returned the reply card, thus initiating a business relationship that has flourished and evolved for nearly a decade.

"We recognized immediately that the dBEV program fulfilled our needs," Dick Burwell says. "Plus, because dBEV is computer software, the cost of computerizing our business operations was only about $8,000, far less than we had anticipated spending."

Magic Valley Distributing serves as an excellent case study of a wholesaler that has literally grown along with its software vendor. Today, Micro Vane has about 700 customers in over 40 states. More than 20 percent of Anheuser-Busch, Coors and Miller distributors use dBEV beverage management software.

In addition, with 32 employees and 330 accounts, Magic Valley is a fine example of a medium-sized wholesaler that has plunged head first into computerization.

Hardware Improvements

Magic Valley serves some 330 accounts out of two warehouses in south-central Idaho. The Twin Falls warehouse handles about two-thirds of the accounts, while the balance are handled from a warehouse in Rupert, 45 miles east of Twin Falls. In general, Magic Valley's territory covers a radius of about 50 miles from each warehouse.

Over the years, Magic Valley has gone through several generations of hardware, starting with IBM XTs and moving eventually to IBM compatibles.

"When we started with computerization," Burwell says, "I felt we had to buy IBM because it was perceived as the Cadillac of the industry," Burwell says. "The idea that we could get away from IBM was difficult for me to accept, but the clones have improved so much that I see no reason not to go with their price advantage.

The biggest difference between computerization during the early '80s and today is speed, Burwell says.

"It's amazing how much faster computers have become in such a short period of time," he says. "When we started with computers, they were so slow that our end of month reports took forever to run. Once a month, I slept on the floor of my office with an alarm clock by my side, waking up once in a while to check on the computer. We had to run our reports at night, because we couldn't afford to take time away from a normal day to run them. Yet the information was so vital to us that there was no way we could do without it.

"Since then, the speed of computers has increased so much that we can simply run our month-end reports during the course of a normal business day, without taking a significant amount of time away from our other operations."

Hand-Held Advantages

Magic Valley Distributing is split into divisions - Coors and Golden Beverage. The Coors Division only handles Coors products, while the Golden Beverage Division handles the balance of the company's product line, including Miller and Pabst products, about 10 of the leading import beer brands, and several brands of wine.

The Golden Beverage routes are all pre-sell, while the seven Coors routes are strictly driver-sell. Magic Valley has used Norand pre-sell and driver-sell hand-held computers for the past two years.

"Probably the biggest advantage of using the hand-helds on our driver-sell routes is that they have virtually eliminated invoice errors," Burwell says. "Prior to the hand-helds, we wrote all invoices by hand. But with the volume of invoices we generate today, we would have to spend a lot of time doing corrections if we were writing them by hand.

"Now, if one of our new employees has to write an invoice for some reason, I can tell you with 100-percent certainty that there will be an error, simply because our new employees have never had to write invoices.

"Also, the hand-helds transmit information from the salesmen to the warehouse so rapidly that we can build each order for the next day's delivery throughout the day, rather than waiting until the salesmen return from their routes before getting started. Consequently, we don't need night warehouse crews anymore. On a normal day, our warehouse closes by 6 p.m."

Business Partnership

Burwell says Magic Valley's relationship with Micro Vane has evolved over the years from one that functioned purely on a customer/vendor level to more of a business partnership.

"Computerization has become such a vital part of our business that I don't see how distributors can operate efficiently unless they forge a climate of partnership with their software vendors," he says.

"We have even sent Micro Vane copies of our databases in the past," Burwell continues, "so their software developers can lug real numbers into their upgrades to be sure they operate as expected. For that matter, Micro Vane has incorporated many of our suggestions into their software enhancements over the years."

The close working relationship is solidified further by the annual support Micro Vane provides Magic Valley, Burwell says. Magic Valley pays a modest annual fee to gain access to Micro Vane's customer support representatives and obtain all software enhancements.

"We made it clear early on that we wanted to make a long-term commitment to our software vendor," Burwell says. "One of the things we found from other distributors is that some software vendors charge ridiculously high annual support fees.

"We have no problem paying a reasonable support fee to help the software vendor maintain a work force sufficient to serve our needs. Micro Vane's customer support people are basically our employees. If we have a problem, they're there for us."

Though a close working relationship is essential, physical proximity is not, Burwell says. "At first we were concerned that the distance between our business in Idaho and Micro Vane's offices in Michigan would be a problem. But, as it turns out, we have never had a problem with our software vendor being so far away. All of our questions are answered over the phone by Micro Vane's customer support representatives. One time we had a problem and they sent us a replacement disk by overnight delivery. So the distance is really insignificant.

"Another thing that appealed to us about Micro Vane is that they were only interested in software. They said, |we'll work with you on the software, but you'll be much better off purchasing hardware locally so you'll have someone to service your equipment.' That's exactly our philosophy. We try to purchase locally and deal with local people whenever possible."

Software Considerations

For Magic Valley, ease of installation and operation was an important requirement for their software. The company installed dBEV in October 1983, spent the better part of the Fall inputting data, and went on-line January 1, 1984.

"When we installed the program, we were absolute computer novices. No one had any computer experience," Burwell says. "One of the earliest pieces of advice I received from a fellow distributor was to retain some hands-on knowledge about our computer operations, rather than delegate them to someone else entirely.

"In the early years," Burwell reports, "we were in touch with Micro Vane a lot simply because we were so unfamiliar with computers. But the further we progressed along the learning curve, the less we had to call Micro Vane for help. They still keep in touch with us through periodic newsletters and seminars, but our relationship has evolved to the point where frequent contact is no longer necessary."

Burwell says distributors should insist that their software stay abreast of changes in the industry.

"What was important 10 years ago, or five years ago, or even one year ago from a supplier's standpoint may not be as important today," he says. "The industry is constantly shifting emphasis, and our software must too.

"I can't imagine a distributor of any size that's not computerized," Burwell says. "Beer suppliers are demanding so much of their distributors that the challenge would be impossible to handle without the ability to rapidly assemble information and get it to the suppliers through computerization."

PHOTO : Dick Burwell (l. to r.) Denny Reese and Kurt Daigh of Magic Valley Distributing Co. review a dBEV load sheet.

PHOTO : Dave Pugsley, driver-salesman for Magic Valley Distributing, inputs an order into his hand-held computer.

PHOTO : Jacque Chambers updates a weekly sales and inventory report with dBEV software.

Bob Pursel is vice president of marketing for Micro Vane Inc., a Kalamazoo, MI, company that develops computer software exclusively for beverage wholesalers. For more information, call (800) 222-0677.
COPYRIGHT 1992 Business Journals, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Magic Valley Distributing's use of Micro Vane Inc.'s dBEV software
Author:Pursel, Bob
Publication:Modern Brewery Age
Date:Jan 20, 1992
Words:1519
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