CMPT 370: Toolsall Case Scenario

CMPT 370: ToolsAll Case Scenario

After losing his job as an analyst in the financial melt down of the early 2000s, Tom Handy and his wife, Lisa, started ToolsAll, initially a hardware store but now also selling building supplies. Tom and Lisa had moved to a rural town some 80 miles from the nearest city. An airport was being built close enough so that property values were rising and farmers were selling their land to developers for large tract private homes. Some of these developers had their materials shipped directly from outside the region but others were now depending on ToolsAll to supply much of their needs. Tom and Lisa had also bought a large tract of land next to their store on which they had build sheds to house lumber and some other materials best protected from the elements. The contractors particularly appreciate the wide spaces between the buildings and the piles of materials since they could drive their trucks directly to the materials they wanted. Tom had trained the clerks in the store to meet the contractors in the yard with the paper work needed to complete the sale so the contractors would not have to come to the store.

Tom had been skillful with tools since working for his carpenter father and Lisa knew how to run a business, having managed a car rental agency during Tom’s stint as an analyst. In rural areas the enforcement of building codes is usually lax (when they had any codes to begin with) so carpenters were also plumbers and electricians, and worked on everything from foundations to the final decorations. Tom was familiar with all aspects of home building.

Tom’s hunch that the area would grow had come true. The area was now large enough to support a sizable store but was still too small to attract the attention of Home Depot and other similar chains. Tom and Lisa realized they had a window of opportunity to develop their store to a competitive level before they had to face competition from these chains.

Shortly after expanding into tool rental, in early 2001, it became apparent from the large number of questions, and tools that were returned broken, that the newcomers did not really know how to use the tools properly and, by extension, may not know how to do the jobs for which they rented the tools. Tom and Lisa then hired her sister, Janet, to organize small classes on late Fridays and early Saturdays to teach the proper use of tools and how

1 to do the jobs that needed those tools. She had helped with the installation of the initial record keeping system and at the time was working for the YWCA in the city offering instruction in word processing, spreadsheets, and data base software. The classes were an instant success, sometimes with multiple sections, and also became social occasions attended by both individuals and couples in a fairly wide region around the store. Building contractors also used them as basic training for their new employees and to become familiar with new building technologies.

ToolsAll had grown spectacularly and now has three divisions (ToolsAll Hardware and Building Supplies, ToolsAll Rentals, and ToolsAll How To), 60 full and part time employees (e.g., clerks, stockers, repair people, instructors), and was open seven days a week with two shifts a day. Gross sales were expected to pass $10 million a year, turning over the approximately 90,000 SKUs (Stock Keeping Units) 5 times a year.

This growth had clearly overwhelmed the management team’s ability to keep track of everything. The management of ToolsAll has become complex, requiring many skills, both technical and managerial. The number and numerous types of accounts (particularly for construction contractors), rental contracts, class enrollments and payments, repairs, inventory, and other business items were clearly too much for the small business accounting package that Janet had installed when ToolsAll started and had served the store since it’s beginning. No one person was able to master the many ad-hoc entries that seemed necessary to handle the various lines of business.

In the last three months Tom, Lisa, and Janet had discussed a desire for a comprehensive information system commensurate with the size of the operation. The specific business goals they formulated are:

Maintain customer loyalty by efficiently serving their inquiries, sales, rentals, training, delivery, and returns.

Remain at the leading edge of tool and building product technology by having up to date information on new products and services in the construction and home maintenance industries.

Increase profits by an increase in productivity that would allow higher volumes without a corresponding increase in personnel and other costs.

Understand the entire operation of the business by integration of their retail support system with a comprehensive, integrated customer and supply chain management system.

As part of the modernization of their information systems, Janet had bought and installed a general ledger system and employee benefits system, and arranged to outsource the payroll. In addition, Janet was in the process of installing bar code readers at all registers and rental stations as well as networking all the store’s computers and cash registers. She was hoping to include the yard sale positions in the network but was worried about

2 running wires over the entire property. These had been largely defensive measures just to keep things going.

Another reason Tom and Lisa wanted this system in place soon was that the owner of a large nursery next to the store was nearing retirement age and preliminary discussions had already taken place to have ToolsAll acquire it. The fit with the hardware and building supply business seemed natural. The nursery business was a lot older than ToolsAll and had no computer based information systems. Tom and Lisa were anxious to be prepared to buy the nursery when it became available and wanted to be assured that they could incorporate it in the new applications. The combined operations would then take place on a combined lot the area of two football fields, adding to the already strained communications between employees in the yard and those in the store during the course of each day.

3 Tasks:

Using the above scenario work on Case Project Part 1, Part 2, Part 3. See the following documents for details:

ToolsAll Case Project Part 1(Summer 2007).doc