LAS VEGAS (Nov. 16, 2001)—Ed Engel is working hard to integrate that sometimes indeterminate quotient—people—into the faceless, nuts-and-bolts world of computers, software and hardware.
Far from seeing that as a questionable proposition, he cuts to the chase when discussing what his company does and how it will succeed: “As we focus on customer success, they become our best salespeople.”
The president and general manager of Quality Design Systems (QDS) in Meridian, Idaho, apparently has indoctrinated his troops with the same philosophy. During a Specialty Equipment Market Association/International Tire Expo press conference in Las Vegas Nov. 1, QDS unveiled a new version of its point-of-sale and accounting software. Along the way, several company executives continually returned to the gospel that, while its products offer business solutions, the strength of QDS is in its people and how it serves its customers.
“My philosophy is, I want our people so skilled that they can go anywhere to succeed, but they choose to stay with us,” Mr. Engel said.
When Bandag Inc. acquired QDS in May 2000, it opened its wallet to reveal the possibilities available to a company that didn't have to worry about seeing its future choked by an inadequate bankroll. Unlike some software firms that have struggled to remain viable in the post “dot-com” boom and bust technology environment, Bandag's capital has allowed QDS to develop from a position of strength, according to Mr. Engel. Before being brought in to run QDS, he had been manager of Bandag's largest plant, in Griffin, Ga.
QDS is the “only Bandag subsidiary not operated as a captive company,” he noted—meaning it has a reasonable amount of autonomy. That alone makes it a bit different, Mr. Engel said, since, historically, “similar acquisitions often fail because the cultures of the two companies collide.”
Formed in Eagle, Idaho, in 1987 as a custom software programming house, QDS was a small company home to self-proclaimed computer and software nerds. It got into the tire industry in 1990 when asked by a local tire dealer to develop a point-of-sale (POS) and accounting software program for his dealership. QDS then launched what has become its “TireMaster” program for the retail end of the business.
QDS said its TireMaster 5.0 program—the latest version of its flagship product—features new capabilities for tire retailers as well as new components to address the needs of the commercial tire and automotive aftermarket industries, including auto repair and service shops. The software, according to the company, also boasts “major improvements” geared to commercial businesses dealing with retreading and tire sales to national fleet accounts.
Those features include: a redesigned and larger purchase order generation capability; an expanded pricing matrix; a commission calculation feature that provides more flexibility in setting up individual commission levels; and a marketing function that queries customer data to produce mailing labels for direct mail advertising.
The new software is based on the Windows 2000 interface. It offers “significant enhancements,” Mr. Engel said, such as multi-store as well as single-store versions, the ability to communicate with Goodyear's Xplor and infoLink software systems, Microsoft Windows platform, and a continuous link between the inventory entries at every store in a retail network.
Since the launch of TireMaster, Mr. Engel said the company's installed base has grown from five to some 1,100 customers—more than half of whom have joined QDS since 1997. The company claims it has nearly tripled its customer base in the past five years.
The acquisition of QDS by Muscatine, Iowa-based Bandag has allowed TireMaster to be integrated into the “SystemBandag” program of business software the company has used for its commercial and retreading customers. But Mr. Engel said Bandag realized that, in order to make its software “really effective to its dealers, they needed some connection to a POS accounting system.” TireMaster will eventually enable a complete integration between what he called back- and front-shop systems.
One of QDS' biggest customers is TBC Corp.'s Big O Tires Inc. unit.
With its new software launch, QDS is moving from its roots as an entrepreneurship to a “strategically focused company,” he said. Its scope is expanding, taking the company from a small local base to a global corporation via the support of Bandag, a retreading industry supplier with a worldwide customer network. While that relationship with its parent is important, Mr. Engel said QDS' success will rest, in part, on strategic partnerships and, in the long run, Bandag customers will “be only a small percentage of our overall business.”
Reiterating that point, Brian Critchfield, QDS national sales and marketing manager, said most automotive-based businesses “just don't do only tires or transmissions anymore, but offer a combination of services.” In part because of that movement toward a varied shop menu, QDS has linked with CCITRIAD, a leader in the electronic parts and labor automotive catalogs arena that claims some 70,000 counter users of its data.
After 10 years of keeping its catalog and connectivity proprietary, CCITRIAD is shifting from direct sales and installation of new shop management systems towards strategic partnerships and licensing arrangements with third-party business information solutions providers, said Harry Cousins, director of business development.
Its partnership with QDS will enable “an end-to-end information management solution for the retail and commercial tire industry, automotive service and repair shops, oil and lube businesses, single store and multi-chain operations,” he said.
TireMaster will be linked with CCITRIAD's LaserCat 2000 PartExpert software—an application-driven parts look-up database providing access to more than 3,800 aftermarket product lines with more than 3 million part numbers—and the company's LaborExpert flat rate estimating software.
Future enhancements of TireMaster will include a link to CCITRIAD's EZConnect system, enabling electronic online ordering from distributors.
Mark Davison, CIO of Bandag, said the company's goal “is to support the total business of our customers, not just the manufacturing process. QDS represents an extension of this effort to help our franchise network reduce costs and increase revenues. We believe that our future success will depend heavily on the delivery of business information solutions that accomplish these objectives.”
The QDS-CCITRIAD partnership adds value to the Bandag distribution channel, he added, as Bandag is focusing on delivery of information technology products to fleet customers. These customers, he said, “want to focus on their core business, what they do well, and simplify their business processes, increase their revenues and reduce their costs.
“Bandag wants to provide dealer applications that go beyond franchise tire operations.”
And QDS represents a way to leverage Bandag's leadership in the commercial tire business to tire retailers, Mr. Davison noted. The company “will now have the capabilities necessary to provide a tire information system that will track tires from first purchase through maintenance, retread and disposal.”
Among end user benefits of TireMaster 5.0, Mr. Critchfield said the software lowers operating costs, streamlines business functions and helps increase profitability. It also manages inventory across multiple store locations, saves catalog look-up time for shop owners and staff; provides automotive service businesses with access to standard labor rates; and integrates business management information across multiple operational functions, including work orders to parts and labor costs to POS and accounting functions.
If, for example, a shop needs a water pump for a 1976 Chevy pickup, according to QDS, a work order generated in TireMaster 5.0 would access a database of all the parts needed for the repair or replacement, along with distributor pricing and standard estimates for the required labor. The completed work order would then be utilized by the software's POS, payables, receivables and inventory functions.
As he concluded the press conference, QDS' Mr. Engel outlined why he believes the company will be successful. Pointing to the broad-based business information solutions QDS offers, he said it provides products, client and support services, software and hardware, as well as equipment installation, training, and the development of custom databases.
“I don't think there are very many in this industry that can provide that.” Nine of 10 companies, he claimed, “don't execute their strategy. They don't have the guts to go forward, the willingness to take the bold steps necessary.”
QDS does have that drive, he continued, and—thanks to Bandag—is able to invest in people, facilities, development tools and research-and-development.
Mr. Engel said he fosters a philosophy of “continuous improvement,” where “trust-based relationships are grown every day with our employees and customers.”
As the company continues to expand its customer base—and, at least initially, explore some international business in English-speaking countries such as England, Canada, Australia and New Zealand—he predicted QDS' volume “will explode in the next few years.”