KMM: Rewriting the Supply Chain Rules with OSAS

How many orders a day must a 120-person company fulfill to consider itself a success? A few dozen? A few hundred? KMM, a New Jersey-based supply chain solution provider, manages nearly 14,000 order line transactions a day. The kicker? Most of those orders aren’t touched by human hands until they are loaded for shipping.

KMM has constructed an inventory and distribution system capable of managing $60 million in inventory and shipping more than $800 million of product at any time, fed by a speedy Electronic Document Interchange (EDI) system which processes in minutes what most systems can’t handle in hours. It’s an innovative technological framework unlike any other in the U.S., and it’s all backed by OPEN SYSTEMS Accounting Software (OSAS) from Open Systems, Inc.

Humble beginnings, big ideas

“KMM is one of the big players in materials management in the telecom industry, and one of the largest providers of electronics, general merchandise and copper and fiber optic cable in the country,” says Mike Kerstetter, Director of Technology at KMM’s headquarters in Fairfield, New Jersey. KMM brings national supply chain services to the telecommunications industry, serving the needs of Fortune 100 companies such as AT&T and Verizon. Pretty impressive for a company that Katherine McConvey started in 1991 in the spare room of her house.

From humble origins, KMM has grown to a national network of distribution centers across the United States, all tied into the main system in the New Jersey headquarters. How do they manage so much? The answer, while not easy, is simple: automate, automate, automate.

It starts with OSAS

For a technological back-end, KMM chose OSAS from Open Systems, and has stuck with that decision since 1994. OSAS not only provides KMM the flexibility to run the specialized Linux servers necessary to handle their workload demands, it also has an open architecture which allows Kerstetter and his technology staff to quickly modify programs, processes, and fields to keep up with their business. OSAS provider Advancing Data Resources, Inc. has been with them from the start to provide technical assistance.

“We’ve been able to modify OSAS pretty extensively,” says Kerstetter. “To Sales Order alone, we added 50 or 60 fields.”

KMM also has taken advantage of the scalability of OSAS, expanding the framework from handling 300 order lines a day in the ‘90s to their current average of nearly 14,000 order lines a day. “I deal with large vendors in the industry who just don’t have any flexibility in their systems,” says Kerstetter. “That’s why we’ve stayed with Open Systems, because we can react, and we can code things, and we can customize very quickly relative to anybody else.”

Company owner McConvey concurs. “Over the years, a customer’s business needs evolve. We have to develop and integrate systems-based solutions to meet those needs,” she says. “Whether the customer is using off-the-shelf or proprietary systems, KMM has always been able to leverage the flexibility of OSAS to integrate with them quickly and easily.”

Automation through EDI

The star of the show is KMM’s EDI system, designed from the ground-up to automate every possible step before human interaction is necessary. “When an order comes in electronically,” says Kerstetter, “the system reads those in and it creates sales orders. Then if it’s a direct-ship item, we auto-create purchase orders, those purchase orders then create EDI outbound.”

Since the system is tied into OSAS, another series of automatic transactions take place, including the necessary accounting functions. “All the things that go along with an order—invoicing, ship notifications, expected ship dates—is all done through EDI and 100% integrated in OSAS,” says Kerstetter. “We were also able to tie in all of our Web tools, so the customer can see the status of orders and inventory in real time.“

All of this automation shortens the time between the customer’s decision and the product arriving at their door. “For probably 90% of our orders, nobody’s even seeing them other than the guy who’s picking the order and loading it on the truck,” says Kerstetter.

The need for speed

With an OSAS back-end, Kerstetter and his team weren’t restricted in the type of server hardware they could choose, so they created the fastest system they could. Their Linux servers run on solid-state, RAID-on-RAID drives, providing order processing speed unmatched in their industry. “We can process orders many times faster than some of our partners,” says Kerstetter. “If we get, say, 1,000 order lines in a batch, it literally translates them into sales orders, creates purchase orders if necessary, sends the outbound EDI, and that all happens in about 15 to 20 seconds.” He knows his system is faster than most of the solutions sold to businesses of their size and scope. “It would take about an hour to run that through one of OSAS’s competitors.”

With the stability, speed, and scalability of the system they have created around OSAS, Kerstetter knows just where the value proposition lies for KMM’s customers. “Our marketing strategy is all about our systems,” he says. “When we go to sell, we tell the customer why we can do a better job than everyone else, and it’s all based on our systems. We’re very proud of what we’ve done for the last 15 years.”

KMM and OSAS have enjoyed a great and innovative partnership over the years, and look forward to many more years of serving KMM’s specialized supply chain clientele. “Are we planning on leaving Open Systems?” says Kerstetter. “No. You can come in with one of their competitors and spend a million dollars, and you still can’t do what we do.”