July/August 2010

Scrapyard Software

Software companies are responding to ever-changing customer needs—most notably, compliance with materials theft regulations--by adding new and innovative features to scrapyard management systems.

By Chelan David

Technological advances have yielded a new generation of scrapyard management software that allows recyclers to navigate even the most complex transactions with ease. Software companies are addressing perhaps the biggest issue for scrapyards in the past few years—materials theft—by significantly expanding what collateral information they collect, manage, and report. Beyond those innovations, these programs are adding new features and modules to manage more scrapyard functions or provide greater access to the system in several different ways, all intended to help scrap recyclers manage their business more efficiently.

These companies are designing their products to stay ahead of the curve and help clients expand their business, both now and into the future. Software should be flexible, adaptable, and usable—not just five years ago or today, but [as] a living, breathing entity that constantly changes as the industry changes and your business changes with it," says the CEO of one company.

Adapting to Address Materials Theft
As scrapyard management software has evolved, some things have not changed: Recyclers still need the same basics: inventory, purchasing, and selling," says the lead designer and programmer for one firm. But now, he adds, law enforcement requirements have become a basic need as well." Some jurisdictions have instituted more stringent regulations on the purchase of scrap in response to an increase in material theft concerns. In certain cities, counties, and states, recyclers must record specific data about each sale, which might include the seller's vehicle license plate number, a scan of the seller's driver's license, his or her photo and fingerprints, photos of the material purchased, and the form of payment. The regulations also may require regular reporting of some or all of this data to law enforcement or other agencies. Further, the federal Anti Car Theft Act requires those who accept end-of-life vehicles to submit those vehicles' identification numbers and other information to the National Motor Vehicle Title Information System implemented last year.

Scrap software companies have responded by modifying their programs to record and store more seller and transaction data and do so in the most automated, efficient manner possible. Some systems can photograph drivers, loads, and trucks—either manually or automatically—and tag the photos with transaction information including the date, time, seller ID, and load weight. Databases now have fields for information such as vehicle make, model, year, color, and license plate. Driver's license scanners can not only record an image of the license, they can put that image on the screen whenever someone pulls up that customer record, and they can populate data fields with the information on the license via optical character recognition or by reading the magnetic strip on the card. Other input devices capture signatures and fingerprints digitally and attach them to transaction records. Some of these systems can append additional collateral—digital photos, video, scanned vehicle titles, and more—to a customer record. Others allow scale operators to swipe or scan an identification card or keychain tag to automatically capture information from regular customers at ticket creation.

Additional provisions of some material theft laws govern how yards can pay for scrap and what information they must report to the authorities—both tasks these programs can help yards manage. Some advertise they can alert the cashier when local laws prohibit cash payment for a specific transaction or mandate a delay in payment. They also can automate the process of reporting transaction data to police or state agencies (as the laws require) or generate reports for Leads Online, a Web-based system that law enforcement agencies use to recover stolen property.

At least one product also helps yards comply with a particularly onerous requirement that some cities and counties have created: tag and hold. Its material tagging feature helps yards that must tag their purchases of certain materials and hold those purchases separate from other scrap, without processing, for a certain length of time. Each locality has different requirements for what the tag must contain, which might include the name and address of the seller; a description of the material; gross, tare, and/or net weight; when the company purchased it; and when it can release it.

Such advances help recyclers concentrate more on their business and less on paperwork, the software sellers say, and they help recyclers avoid costly mistakes. Employees may know the laws, but when they are trying to process hundreds of customers a day as quickly as possible, it is easy for them to miss something, and one minor mistake could prove tremendously costly," points out one software designer. Further, some note, their systems make it easier to search past transaction data upon request to aid the police in investigating crimes.

Other vendors point out features they've introduced to help combat internal theft. Internal system controls can prevent employees from changing weights manually, if desired, and record each action to a daily activity log, which helps managers or owners keep an eye on what comes in, what goes out, and what someone is changing in the system. In the same vein, a scale auditing features allows the comparison of actual scale weights against manually entered weights.

One program developer believes scrapyard management systems will offer more integration with law enforcement in the future, such as tie-ins with criminal databases and no-buy lists. As law enforcement becomes more sophisticated, the ability for our system to communicate with [police] databases to prevent and report transactions will become more effective and timely," he says. This, in turn, will help law enforcement [officers] catch metal thieves [more easily] and track transactions that individuals do across multiple recyclers."

Recycler Requests
Software companies have introduced other system advancements to meet their scrapyard clients' most frequent demands. More customization is one common request, says the director of application development and support for one company. Recyclers want a software product that fits their particular business focus. The modifications can range from extensive custom enhancements to tweaks to how they handle inventory, reporting, and pricing.

One vendor says his company's new debit-card payment option has been popular because it eliminates cash-handling expenses, the expense of installing and maintaining ATM machines, theft, and the hassle of delayed payment by check. The system allows cards to be reused and reloaded to pay regular customers—even if the customer doesn't have the card with him. This payment method also leaves an audit trail that aids law enforcement, notes another software vendor that offers it.

Integration with other systems is another trend. One software company president touts his product's seamless connection to scanners, cameras, printers, [and] GPS devices," adding that it can integrate with any scale." He notes that one user who was traveling in Japan could still view his U.S. yard's cameras, access stored files, and view the scale's weight in real time as trucks drove across it. Many companies say their software integrates with weighing systems and with payout systems such as cash dispensers and ATM machines. The advantages of such integration, they say, is reduced chance of operator error and better internal and external security.

Scrapyard management systems also are branching out beyond scale management, with certain vendors offering truck and container logistics management modules—some of which work with portable GPS devices and other companies' routing software—equipment maintenance management modules, and other add-ons.

On the hardware side, touch-screen terminals are becoming popular. Touch-screens give the user a limited, uncluttered menu of operations, making the work simpler and quicker, providers say. It's very McDonald's-like," says one company's president, which is ideal for setups where the users just need to do one thing—buy material—all day long. (He notes that the terminal typically still needs a keyboard and mouse to log into the program.) One disadvantage of touch-screen terminals is the cost, however. They can start at $600 to $700, this vendor points out, and terminals 17 inches or larger can easily be $1,000 or more. When used in a scrap buying operation, they get hit by forklifts, or knocked over by operators or customers, and they usually can't be repaired," he says. Some companies put the terminal in an enclosure to shelter them from potential damage.

Passing Fad or Future Trend?
Some features that seemed promising a few years ago have not yet panned out, while others are newly emerging. Radio frequency ID tagging was once heralded as the savior of the scrap industry because it would allow more precise tracking of loads, but scrapyards' enthusiasm for the technology has since cooled. To implement an RFID system is, at present, cost prohibitive for its relatively low advantage in inventory management," says the sales and marketing vice president for one firm. Another company's lead designer agrees, saying the cost per tag is too high for most recyclers to justify the returns. Further, he points out, RFID has not proven powerful and durable enough to function well in the scrapyard environment: It can't be used for inventory because the RFID signal won't pass through metal or paper bales, he says.

Despite the limited interest in RFID tags, a more common tracking technology—bar coding—has grown in popularity for several aspects of scrapyard operations. The technology can improve inventory management, discourage internal theft, increase efficiency, and reduce data-entry errors, say those companies that offer it. Software systems can add bar-coded labels to processed materials so that the company can track inventory in the warehouse or scan bales, pallets, or other containers as workers load them for shipping.

Bar-coded printed receipts are becoming more popular for use with ATM payment systems, says one company president. The plastic ATM card is rapidly fading away," he says, due to a lack of durability: The magnetic strip on the reusable cards wears out, or the card encoder breaks, creating additional costs for their replacement. Instead, his system can print out a one-time-use bar code on the receipt, and the ATM machine has a bar-code reader. The ATM scans [the receipt] and gives out cash," he explains.

That company also offers a bar-coded chit" that's like a claim check: The scale operator prints the chit, which contains the date, time, customer's name, ticket number, and bar code. The customer then takes that to the cashier, who can scan the bar code rather than manually entering the ticket number to retrieve the information. It's faster and more accurate, the company president says.

The jury is still out on handheld wireless input devices. One firm's CEO says that with the industrial nature of a scrapyard, the severe environment and the maintenance and return on productivity simply did not bode well for many devices. That said, a few firms offer them as an option. One company provides the rugged, water-resistant Panasonic Toughbook, a touch-screen device that's a quarter-inch thick and weighs 1.5 pounds, for remote access to its system within 30 feet of a system terminal. The company suggests using the device to start tickets as customers are in line for the scale, to make deductions from the yard, or to enter data from the warehouse during processing. A different company offers a device designed for off-site operations, such as at a community recycling event. The water-resistant, handheld terminal contains a camera and a bar-code scanner, it connects to a printer wirelessly via Bluetooth, and it interacts with the home office system via the 3G broadband network. Its battery is designed to last for 9 hours, the company says, and users can replace the battery without losing power to the device.

Remote access to system software seems to be another trend. One software company has launched an application for the iPhone, iPad, and iPod Touch its customers can use to obtain critical business information on customers, containers, and contracts, as well as generate reports and graphs. Other vendors have created Web-based systems that do not require a server—or someone to provide tech support—on site. Users can access the system from any computer with an Internet connection. Another company offers online account monitoring to the scrapyard's customers. With this Web-based interface, trading partners get immediate, secure access to account information. Scrap sellers can make a sell offer, call for container or truck dispatch, and look into the status of contracts, pricing, dispatch, shipments, invoices, and so on. Similarly, scrap buyers can initiate or look up the status of a contract, track shipments and invoices, and more. Typically, [scrapyard customers] would call or e-mail a customer-service rep for information regarding payment, load weights and/or historical data," the company's executive vice president explains. Having the info available online allows them to access it when they want and does not require any time from the customer-service reps." Remote access is a trend one software developer expects to continue. He predicts that more scrap software will evolve to incorporate the use of the Internet and will be compatible with mobile phone devices so that operators can log in remotely and get a high-level overview of their scrap operations without having to be on a computer in the office.

Beyond that, one vendor expects recycling software to evolve into systems that require little to no user input. We are currently in the midst of developing a completely automated system which runs without human contact using RFID tags, barcodes, fingerprint readers, and cameras to identify drivers and loads," he explains. Another software developer expects to soon see products specifically for electronics recyclers, to help them manage various laws and regulations regarding the disposition of that material. And a different programmer envisions more integration with third parties such as financial institutions, shipping and trucking companies, customers, and suppliers.

The Selection Process
When selecting scrap software, know your business, know what your requirements are, and know what you are trying to accomplish, one developer says. Typically, software companies can modify or customize their products somewhat to accommodate your requirements, but first you have to know exactly what those are. Write down what you think are the most critical components to your business, ask direct questions, and always ask for a [demonstration] of the features you have chosen to focus on," she suggests. Things like touch screens look nice, but if they don't do what you want them to do, they are of little use."

In other words, try before you buy," says another company's president. Buying yard management software, or any software for that matter, after only seeing a brief demo is unwise. You will never be able to ask all of the questions that will come up when the program is actually in use. The only way to tell if the software will truly meet your needs is to actually try it out." He suggests asking for a free trial.

In the scrapyard software market, we are all very good at what we do," says one company's sales and marketing VP. The most important thing to look for is who you feel most comfortable with." When screening scrap software vendors, request references and ask their current customers what they think about the software. These company representatives suggest questions such as these:

• How easy is it to use the system?

• How easy is it to create reports?

• Can the system store information in multiple formats, such as JPG and PDF?

• Can it export data in multiple formats, such as plain text, Excel, and XML?

• Can the software handle multiple currencies, languages, units of measurement, legal entities, and sites without any loss of functionality?

• Is the system flexible and easy to customize for your needs?

• Is the product scalable? If you are looking to expand in the future, will the software be able to expand with you?

• How does the company train users on the system? What are the initial or ongoing training costs?

• What are the costs of support? Does the company have a good reputation for providing support and enhancements?

• How well is the system documented?

• What is the mean time between database failures?

• How is the system secured?

• What networking protocols does it require to operate across multiple yards or companies?

• Is it compatible with third-party software such as accounting systems, routing systems, and scale management systems?

• Is it compatible with hardware such as various types of scanners, bar-code readers, cameras, and printers?

Though some basic software packages start at about $11,000, most vendors cite prices that range from $20,000 to $50,000 or more for a scrapyard management system. A small company with a single location will most likely spend less, whereas a large company with multiple sites and multiple legal entities will spend more. Depending on the software provider, the cost of services and support can vary a great deal. Some provide a limited support contract or bill for extra support; others include unlimited support as part of the annual agreement.

One programmer cautions against cutting corners to save money when purchasing a scrapyard management system. It is the features beyond the basics and the ability for the software to grow with the customer to meet their future needs that count," he says. Times may be tough at the moment, but as anyone who has been in the business long enough knows, this is just part of the cycle. Buying something cheap today won't help [users] or prepare them for when times turn around." Consider a purchase of scrapyard software as you would any other piece of equipment, he adds. All equipment is a long-term investment." •

Chelan David is a writer based in Overland Park, Kan.