Editor’s Note: During MDM’s SHIFT Conference — Sept. 11-13 in Denver — Stellar Industrial Supply Founder, President and CEO John Wiborg will have a Fireside Chat with MDM Executive Editor Mike Hockett, exploring the company’s journey across sales, digital transformation and culture. That conversation will highlight Stellar’s technology build vs. buy approach, which Stellar’s Software Engineering Director, Brett Parkhurst, details in this contributed article below.
Commercial software packages have long been a cornerstone for business efficiency, allowing companies to grow rapidly while focusing on core operations. For example, Epicor Prophet 21, which is used by Stellar Industrial Supply as its core ERP system, has proven to be a huge asset and key differentiator in how the business operates efficiently. Even as feature-rich as that system and others are for distributors, they often can’t provide 100% of everything customers potentially need.
Many software companies provide powerful extensibility tools and APIs that both non-developers and developers can use to extend the functionality of the system. There are other software packages that Stellar has used. The efficacy of such solutions often falls short of delivery promises and/or expectations, leaving users grappling with inefficiencies, excessive costs and looking to alternative software to fill the gaps.
Through recent acquisitions — eight since mid-2021 — Stellar has undergone a rapid expansion, now boasting an enviable coast-to-coast network of regional distribution hubs. Through its network, Stellar distributes more than 90,000 MRO products and tools from more than 1,500 brands for safety, metalworking, marine supply, aerospace and other general manufacturing and processing organizations, and also offers customized indirect material management.
The company achieved approximately $150 million in 2023 revenues — 20% more than 2022, largely driven by acquisitions. That annual revenue figure was essentially double what the company had in 2019.
As it has grown, Stellar frequently faces the challenge of third-party solutions falling short in meeting the diverse needs of their customers and their business operations. This discrepancy not only contributes to the accumulation of technical debt but results in a slower-than-desired response to resolving issues with agility and efficiency. As the company’s customers’ demands evolve, staying ahead of the curve becomes imperative. This entails customizing solutions not only to meet present needs but also to anticipate future market shifts.
Built for Success
Recognizing these challenges, Stellar embarked on a bold initiative during the pandemic. It invested in developing its own in-house technology solutions to revolutionize operations, better serve customers and function as a catalyst for accelerated company growth.
With a keen focus on ‘build vs. buy,’ Stellar’s new in-house development team strategically crafted a roadmap of custom-tailored services and applications that augment their core systems such as Epicor Prophet 21, Microsoft 365 and Microsoft Azure. This, Stellar said, empowers the company to achieve greater customer satisfaction with fewer resources. An additional benefit that Stellar has realized is that custom development places the company firmly in the driver’s seat, providing a distinct competitive advantage.
Collaborating closely with their internal teams and industry experts, Stellar meticulously crafted the “Stellar Automation Hub” as the cornerstone platform for deploying a suite of applications and services. This hub utilizes advanced technology frameworks such as Microsoft Azure Services and the Microsoft AI platform to allow rapid development and integration of solutions.
In-House ROI
Stellar rapidly deployed solutions that facilitate quick decision-making and automated processes, freeing up its team members to focus on more value-added work. In a brief period, Stellar has created solutions that improve overall employee and customer satisfaction. These solutions include sales order expediting, purchase order expediting, pricing contract management, vendor invoice automation, 3M API integration and more.
A compelling demonstration of ROI is the implementation of vendor invoice automation, as Stellar achieved a 64% increase in processing efficiency without any human interaction. This streamlined approach has not only improved payment processing to suppliers, but also significantly reduced time spent troubleshooting.
Two years into its custom development journey, Stellar’s IT department has evolved into a revenue-generating department, crafting applications and automations that foster cost savings and operational excellence. This strategic decision to develop in-house solutions has not only upheld but amplified Stellar’s competitive advantage, while reinforcing relationships with vital stakeholders.
Looking ahead, Stellar is well-positioned to embrace further innovative technologies, continuing to enhance efficiencies and provide unmatched service to customers.
Lead photo: Stellar Industrial Supply’s Tacoma, WA headquarters location (Photo via Google Maps)
