Turning up the heat Featured

9:42am EDT February 26, 2004
In the early 1970s, North Riverside food service equipment distributor Edward Don & Co. was high-tech for its industry. Its sales reps traveled to restaurants and hotels around the country with Telxon handheld computers and punched in orders for everything from finger bowls to kitchen sinks.

But as the years passed, the family-owned business did not evolve with the times.

Attempts to update its systems failed until the early 1990s, when then-CEO Robert Don composed his "View from 2001," a mission statement of how he wanted the company to evolve technologically.

"[He] put out the goal of us being a technology leader," recalls Steve Don, 38, who in 2002 became the third generation to lead North America's largest family-owned distributor of food service supplies and equipment. "He didn't put out the specifics of how to get there; he just said we would be the leader in technology in the food service industry. And, from there, we executed against it."

To achieve Don's vision required four years of planning, design and implementation. At the end, Edward Don & Co. had a $15 million integrated, synchronized enterprisewide computer system to track sales, inventory and distribution of 15,000 products to its 70,000 customers worldwide. Crucial to the project was the development of the company's first Web site, Don.com, which launched in 2000 and now accounts for 10 percent of its $400 million in annual sales.

But more than finding the right technology, the real key to the success, Don says, was the buy-in and participation of its 1,200 employees, who needed to focus on the day-to-day operations of the company but at the same time, commit to an ambitious project that would take the company even further.

"It's all about people," Don says. "You can have the greatest plan in the world, but it's the people that get it accomplished."

Uncharted territory

Steve Don had a freshly minted MBA from Northwestern's Kellogg School of Management in 1992 when he joined the family business. Don, who had worked at JMB Realty Corp. and Salomon Brothers, was planning on returning to Salomon when Edward Don & Co. made him an offer. But despite his last name, Don didn't start at the top.

"I took a threefold pay decrease," laughs Don. "Long term, it was the right decision. I'm a major shareholder; it wasn't about the short-term payoff."

Starting as a sales rep, Don worked his way up to positions of more responsibility until 1996, when he was named vice president of business development. At the center of his new duties was to design and implement -- along with COO Jim Jones and Jim Lyman, at the time a consultant for Ernst & Young -- a new enterprisewide computer system for the distributor.

"We had five different locations that were operating like five independent companies," says Lyman, now director of e-commerce and customer connections for Edward Don & Co. "We had computers all over the place, and it was a hodgepodge of systems that weren't talking to each other and everything else. Now we have a single database. (A sales rep) can be down in Florida, and when the computers here in Chicago scan a box, it will go back down there as a confirmation within less than a third of a second."

The first step in the project was deciding what they needed the software to do. To do that, Don assembled what he terms the "core team," or the top leaders from each department, including inventory, operations, finance, marketing and sales.

"For these projects, you usually get the people who have the most free time," Don says. "But we said that wasn't acceptable. We needed the best person from each department."

Being a member of the core team, however, didn't just require a couple extra meetings a weeks. It was more like taking on another job.

"They probably spent 50 percent of the time for a two-year period devoted to the project," Don says. "The director of inventory, he still had to manage all his people and all the replenishment processes, but still, 50 percent of the time he was working on this."

Don and the core team came up with 1,200 requirements for the enterprisewide system - everything from how the order is entered into the system to how the customer is billed -- and sought out software vendors that could meet those demands. The group narrowed the list of 40 possible vendors down to Rhode Island-based daly.commerce, formerly Daly & Wolcott.

"We wanted something that was going to be scalable," Don says. "And one that was an integrated system, which, in 1997, there weren't a whole lot of integrated systems out there. We wanted it to be robust, but not so complicated that our people couldn't figure out how to use it."

"From a management team perspective, we were looking at saying, this is our foundation from which we can build," Lyman adds. "For everyone else that was involved in it, they were saying, 'I'm having input, and it's my chance to fix these things that are wrong.' Inherently, people want to do the right thing."

Going live

Once Don and his team had customized the system, they needed to implement it companywide. That included bar-coding the company's $30 million in inventory at its headquarters and five nationwide distribution centers, then training the rest of the work force. Once again, attaining employee buy-in with the core team at the beginning proved to be crucial to the implementation success.

"We wrote all of our own training manuals," Don says. "So by the end of it, our team was very good at going in to one of our buildings and very quickly implementing the system."

Don installed the system at its Dallas distribution center first. After it was up and running, Don flew in and trained the rest of his regional managers at the Dallas location so they could see a working model of the system.

"The weekends before we went live, we performed a couple mock dry runs." Don says. "When you train people, it's one thing, but when you actually go live, it's a lot more challenging. You can train people, but they don't use it for a couple weeks, then you go live and the retention is not as high. So by doing these live training sessions, they really got some good practice."

In the past, sales reps without Telxon units would phone into customer service at the end of the night, and get their sales reports at the end of the week by fax or mail. Usually, their sales order history was a month old, and their accounts receivable was a week to 10 days old.

Now, the company's 350 sales reps are equipped with laptops and wireless Internet cards, and they can place orders in the customer's office, view the inventory and track their sales in real time. The new process saves each member of the sales force from 45 minutes to an hour a day, according to company estimates.

"This core team really helped in terms of the sense of teamwork to keep people motivated to keep going," Don says. "Our people were working nights, weekends, but they were extremely motivated because they felt like they were really part of something."

Virtual showroom

Edward Don & Co. began in 1921 with 10 family members who walked door-to-door to Chicago restaurants, with the guarantee that an order would be filled the next day. One family member, who had worked for clothing retailer Spiegel & Co., decided to copy Spiegel's idea of using catalogs to sell its merchandise. Until that time, restaurant owners needed to go to a showroom to view food service products and equipment.

By 2000, the food service industry was starting to use more online ordering. But Edward Don & Co. couldn't reach those customers, not just because it didn't have any e-commerce capabilities but because it had no Web site at all.

So after the implementation of its enterprisewide system, Don and the core team brainstormed and designed its Web site, Don.com, over a two- to three-day period.

"All the decision-makers were in a room where we did all of the prep work, and answered all the questions and set up all the requirements, and then the people started programming after that," Don says. "What usually takes eight to 12 weeks, we did in about two to three days."

But this time it wasn't just employee input that was critical for the internal system; customer feedback also helped create the Web site.

"Between our own people, consultants and customers, over 100 people were involved in giving their input to the Don Web site," Lyman says. "We clearly heard from our customers, 'I want it easy, I want to get online, place my order and get off.' That's the way we designed it."

With technology moving at the pace that it does, Steve Don may soon have to write his own vision of where the company will be 10 years from now. For now, though, Don says he's looking into improvements including global positioning systems for his fleet of more than 100 delivery trucks.

"We'll continue to stay ahead of technology," says Don. "But I don't want to get too far. We want to be leading edge, but not bleeding edge. You could spend and spend and not get any return on it." How to reach: Edward Don & Co., (800) 777-4366 or www.don.com