Lee's Kar-Go Reaps the Returns of Electronic Ordering

BLUEFIELD, Va. -- In 1995, Lee's Kar-Go only had one 1,500-square-foot store in Falls Mills, Va., which opened in 1987. But understanding the important role technology played in the c-store industry, owner Rocky Lee implemented a point-of-sale (POS) system with scanning for all store categories to gain better control over his inventory. By 1999, he decided to expand and bought a second location -- however, it was 100 miles away.

"At the time, we wanted to grow, and we had to go where a store was available matching our criteria," Lee explained. "In 1999, nobody was selling. They were buying and building."

The search took him to Claudville, Va., where he opened a 2,400-square-foot store. Because of the distance between locations, though, inventory often presented a challenge.

"If I couldn't get someone working at the store capable of creating an order, then I would have to drive the 100 miles myself to actually walk the store, scan things and write up an order," he told CSNews Online.

By 2008, Lee knew it was time to upgrade the POS system and turned to ECR Software's Catapult POS system, which allowed the company to incorporate electronic payments and integrate the pump controller with the POS, and included ECR's LogicSync Supplier Gateway for the back office. It was the Supplier Gateway that saved him the 100-mile drive.

Now, Lee can generate and submit orders to vendors electronically. The system creates a suggested order based on what has been sold in the store, and automatically generates a purchase order. It also generates a worksheet to show any cost changes or shortages, and the order can be tracked via the program's dashboard. Lee is utilizing the system with his distributor, H.T. Hackney, as well as a candy vendor, Layman Candy in Roanoke, Va.

"The gateway allows them to communicate with item numbers and UPCs, and they will know what I have in my system and what I don't," he said.

Instead of walking the store and either scanning the shelves with a handheld, or faxing in the order -- and then driving 100 miles to do the same at the second store -- he can create an order in minutes for both locations.

"There is an auto-reordering option, and I can create a purchase order for the remote store, hit my reorder button, and then 90 percent of the store is done in a minute," he said, explaining some items such as deli are entered manually. "It is a tremendous time saver, and with the cost price change worksheet, you can see any items that were altered and can make adjustments as needed. You don't have to hunt for discrepancies."

The system is easy to use, Lee said, and if needed, he can talk any of his employees through the ordering process if he were away from the store. Also, to get up and running, he only had to create a couple of test orders.

"When we signed Layman Candy, it was a seamless transition. Everything was done by ECR, and then someone called me to let me know the system was ready to use," he recalled.

In addition to ordering, the new system helps the stores when receiving product. Previously, when items arrived, an employee would physically type in the item number and quantity, in order to keep the inventory accurate. Lee had one person at each location who dedicated 30 hours a week to invoices and inventory.

Now that everything is done electronically, each person works half the time, he explained. The system also puts the store owner in control of inventory rather than relying on the vendor.

"The POS is really your store manager," Lee said. "It decides what products are sold, what promotions are starting and ending, and what cashiers can do on your machine. Many people let the vendor run the store and control what items they put out to sell, and they wind up closing because they can't sustain growth."

He recalled talking to a local c-store operator with six locations a couple years back who relied solely on the vendor to stock the stores, and a year after their conversation he filed for bankruptcy. "That shows the importance of running your own store and having control of inventory," Lee noted. "We have been able to sustain continuous growth."v Additionally, with the new system, he finds it easier to eliminate products that are no longer profitable. Before ECR, Lee wanted to discontinue a beer item sold in his stores, but it took him a couple of months to finally get it removed. Now, he can check a box off in the new software and everyone knows the item doesn't belong.

Another improvement is the decrease in out-of-stock items, as well as miss-pulls or miss-picks, where the store would order one item and receive something else. Now that the order is submitted straight from the system, the company rarely sees this problem.

"We can't help it if a vendor is out of a product, but miss-pulls or someone reading the wrong number --those mistakes went away," said Lee. "Between the savings and the increase in business, I would say the system paid for itself in about a year and a half. I would definitely spend that much again for it."