Magazine Article | May 1, 2000

Making It BIG

Systems integrator Shipco Logistics maintains a 100% growth rate by concentrating on integrating data collection equipment into enterprise resource planning solutions.

Business Solutions, May 2000

Shipco Logistics, Inc. (Houston) is a systems integrator specializing in automatic identification and data collection (AIDC) for supply chain automation. The 3-year-old company is a preferred SAP partner, which no doubt has spurred its 100% growth rate - reaching an expected $5 million in 2000. The company has focused its efforts on enterprise resource planning (ERP). This technology integrates nearly all the functions of an organization - letting it plan, track, and view its resources to better service customers and reduce costs.

Companies like Shipco butter their bread by maximizing the use of data collected on the shop floor, then providing that information to the ERP monster. It's not an easy task – but if it's done right, it's a profitable venture for VARs and integrators. Shipco's customer list includes Philips Consumer Electronics, Johnson & Johnson, Samsung, Seimens Microelectronics, and American Standard.

Shipco's Background
Shipco started in 1997 to address the SAP middleware market. The company soon developed LogLink/RF specifically for this niche. The software allows delivery information to be collected by a radio frequency (RF) device or bar code reader and communicated through server subsystems. Then, LogLink/RF posts goods receipts against orders in the inventory management module SAP R/3. Shipco became one of the original certified partners in the SAP middleware marketplace that same year. In 1998, the company expanded globally, with offices in Europe, India, and Asia-Pacific. And, last year, the company was the first to be certified in the United States for use with SAP's 4x release.

Abeezar Tyebji, CEO, concentrates on the logistics market because he sees the segment straining to keep up with the demands of e-business. "I firmly believe that the logistics sector is lagging behind growth in e-commerce," he states. "This scenario presents tremendous opportunities in this area. We find that we can increase the stability and speed of AIDC systems by optimizing RF networks." This interest in helping the logistics market with its e-commerce means that Tyebji can't be a slouch when it comes to technology. In fact, he's created a buzzword of his own to meet Shipco's needs.

"We like to use the term ‘m-commerce'," Tyebji explains. "Our corporate direction is into areas like mobile computing and enabling mobile enterprise computing in the context of ERP and e-commerce systems. We'll do this by using tools like wireless application protocol (WAP), Windows CE, and Palm OS. To us, it's about more than e-commerce. We need to provide Fortune 500 companies with mobility and seamless integration on their shop floors.

"Think about it," he encourages. "In terms of logistics, when a large company ventures into e-commerce or e-business transactions, that has to result in some type of material being moved. If a user dials up an account, it takes minutes to find a product and place an order. But, for the logistics sector to put together entire routes to move material, it must keep up with the demand, yet handle the same large volume. Every process has logistical limits. We help large companies cope with their increasing demands and keep up with the increased business."

Since Shipco is a global company, a potential customer's location isn't a problem. "We will go where we need to go to service a customer," Tyebji explains. "We like to do the integration work, instead of working through a channel because, frankly, we make more money on services than products. Since Shipco's software is running in more than 15 countries, I sometimes must act as the liaison between sales and support systems." Tyebji admits this pressure can keep him awake at night.

There's No Such Thing As A 40-Hour Work Week
Tyebji also considers Shipco Logistics to be a "repository of the process knowledge and the project knowledge of ERP systems." This means that his employees are the most visible – and often the most knowledgeable - piece of the ERP puzzle after the initial implementation team has dissolved.

"When post-production support, cut-over support, and post-production optimization come around," he explains, "we are the people who emphasize the basics of the project. We are around long after the Big Five integrators (KPMG, for example) and subsequent business teams dissolve. We bring ERP to the shop floor worker, and we have to do this in a manner that's seamless and easy to understand. That's no small task."

How does Shipco find well-rounded employees to sustain a 100% growth rate? The answer is job rotation.

"Our project managers are also salespeople," Tyebji discloses. "We have a matrix approach to management. With 50 employees currently, we don't have a lot of sales managers, so the project managers carry the torch. After all, they are the people with the best testimonials. They can sell our technology from experience. There's no such thing as a 40-hour week at Shipco Logistics."

Want To Start Your Own Business?
With this kind of workload, employee retention is a hot topic for Tyebji. His methodology may seem a bit unorthodox to many VARs and integrators. Shipco Logistics actually encourages its employees to go out and start their own businesses in related fields.

"Some employees are happy with being employees," he starts out. "Others have an ambition to be independent. We nurture both dispositions and use them to a mutual advantage. Nurturing these partnerships allows us a competitive edge. We give them a background in SAP and hope that we can partner with their business to provide solutions in the future. To date, three of my employees have SAP-certified businesses. They work in diverse areas where we don't specialize, such as import-export custom interfacing, tax interface, and high-end EDI (electronic data interchange) systems. We approach customers as a united front, and we share some of our resources.

"We hope to retain employees for at least four years," Tyebji continues. "If certain employees and I agree they are long-term assets to the business, we plan to reward them with stock options."

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