Where do you stand?
In 1992, Insight Distribution Systems conducted a survey of computer usage among beer and wine distributors with more than five routes. Of the 1,814 distributors contacted, 1,438 participated, representing an 80 percent participation rate. Remote sites were not counted separately, but as part of the main location (see charts 1 & 2). The survey was conducted independently of Insight's other operations.
The IBM proprietary mini-computer holds the largest segment of the route accounting computer market with 44 percent (see chart 3). Three out of four of these distributors still use the older generation system 34/36/38 line. Only one in four IBM proprietary computer users have the AS/400, although it's been available for five years. While 11 percent of all distributors now have AS/400s, 16 percent have UNIX-based open systems from IBM or other manufacturers. These also have entered the commercial market over the last five years.
A review of computers purchased in the last five years by beer and wine distributors for route accounting reveals the shift now taking place. Twenty-three percent bought the UNIX-based open systems; 20 percent bought old S/36-38 equipment, although this is steadily declining and 18 percent bought the AS/400 (see chart 4).
The shift to open systems for purchasers of IBM computers is reflected in IBM's results for 1992. As reported in the January 25, 1993 issue of Computerworld, the AS/400, now a mature product, had a negative growth rate of -2.0 percent in product revenue in 1992. The first down year following a year of slowing growth in 1991. The RS/6000, IBM's UNIX open systems workstation, grew at a 30 percent clip.
Despite financial troubles in some product lines, IBM is adding staff and investing heavily in its Advanced Workstations and Systems Division to produce and develop the RS/6000. The Austin factory that manufactures the RS/6000 runs 24 hours a day, and IBM's direction is clear. Bill Fillip, president of the Advanced Workstation and Systems Division, states, "Our goal is to evolve over the course of this decade into a product line that becomes the most popular and most productive computing environment in the industry" (from VARBusiness magazine, January 1993).
How will IBM accomplish this goal? First, by not making the same mistake it did with the IBM PC. IBM set the industry standard with its PC, but the chip technology was owned by Intel, which then profited greatly from all the IBM clone sales. Apple, IBM and Motorola are now developing the Power PC chip, an RS/6000 chip that will be used in RS/6000s and PCs and be compatible with today's RS/6000. IBM will license this technology to other manufacturers, thereby collecting the royalties it gave away to Intel in the past. Single-chip RS/6000s are already on the market, and the future will see this new technology at all levels of price and performance under IBM, Apple and other brand names.
CHART 1. PRODUCTS DISTRIBUTED Anheuser-Busch 420 Miller 364 Coors 319 Heileman 557 Stroh 339 Other Beer 233 Wine 552 Since many distributors carry multiple lines, the total exceeds the number of participants.
Chart 4 also shows that 13 percent of the distributors bought networked PCs and 9 percent stand-alone PCs for their route-accounting during the last five years. Given all the talk concerning networks for route-accounting applications, this is a surprisingly low figure. It is also surprising that nearly 40 percent of those selecting PCs for their route accounting in the last five years and nearly 50 percent of all PC route accounting users have not networked. The reason may be that, while PCs are standard, cheap and simple, networks are not.
Most distributors water to be in the beer business, not the computer business. Hooking networks together requires specialized skill and knowledge that must be paid for in time and/or money. In the December 8, 1992 issue of Midrange Systems, a publication for IBM computer users, a breakdown of the costs of integrating a system is shown. Only 20 percent is hardware and 18 percent standard software. The other 62 percent goes to consulting, design, management, customization, installation, education, training, service and support. So there are a lot of costs besides hardware and software to consider when putting a system together on your own.
Of beer and wine distributors running more than five routes, 51 percent use hand-held computers (See chart 5). Norand dominates the driver-sell market, MSI and Telxon the pre-sell market. The high initial cost is the only explanation for the large percentage not using hand-helds. The benefits in error reduction and control are well recognized by those using hand-helds and by the breweries. Hand-helds are selling well. Supplier, brewery and peer pressure are resulting in ever-increasing use of hand-helds.
Of those purchasing hand-helds in the last five years, 52 percent selected Norand, 28 percent MSI, 15 percent Telxon, and 5 percent something else (See chart 6). The trend of the last several years indicates about 7 percent of the beer and wine distributors over five routes purchase hand-helds for the first time each year. If this rate stays the same, by the end of the decade virtually all of these distributors will use hand-helds.
While pen-based portable computers have received a lot of press lately, there is no significant usage of these among beer and wine distributors. The main issues here are price and ruggedness for route sales operations. Portia Isaacson's article, "The Reality of Pen-Based Computing vs. The Dream" in the October 19, 1992 issue of Computer Reseller News describes pen-based computers on the market today as "too heavy and too proprietary...to expensive and just plain don't work as reliably as they could." According to the January 28, 1993 issue of Computerworld, the Forecast 1993 edition, "Pen computing: This has suffered, perhaps terminally, from a classic case of too much hype too early."
Max Landman is the president of Insight Distribution Systems of Hunt Valley, MD. Landman received his A.B. in economics from the University of North Carolina in 1967. After serving in the U.S. Navy from 1967-1969, Landman began working in computer programming and EDP management audit. He received his MBA from the University of Miami in 1977.
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|Title Annotation:||computer use at brewing industry|
|Publication:||Modern Brewery Age|
|Date:||Mar 22, 1993|
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