The word “revolution” is appropriate to describe the way Information Technology (IT) has impacted businesses, organizations and consumers around the globe during the past 50 years. WhenSupply House Timeswas first published, few distributors in this industry had real computers; for that matter, not many companies in any industry had one.
As Supply House Times grew and became the standard of this industry, the unstoppable tide of advances in IT resulted in a tremendous increase in the productivity of billions of people around the world, including people working in PHCP, HVACR and PVF supply houses. IT has helped all kinds of businesses function with less inventory and, sometimes, fewer people. “Do not fold, spindle or mutilate” has been replaced by cell phones that can be used to access the Internet and download movies that demonstrate how new products function.
Many important advances were never well known, or have long been forgotten. This article briefly describes many of the half-century of advances in IT that made the benefits possible and describes some of the new technologies and trends that should become commonplace in the future.
Looking Back1. Punched cards and sorters.These have been around since the 1890 Census. But it wasn’t until the 1950s that the cards became the source of data that was literally fed into mainframe computers. And the results of early computing often took the form of computer-punched cards - such as checks issued by the federal government. Early computers had no internal storage capabilities, so the cards were also the storage media - and relative to today, didn’t store much data.
2. Programmable card processor or “collator.” This handled punched cards. It was “programmed” by plugging each end of a wire into different receptacles on the machine. Actually, several wires were needed. This enabled the collator to eject punched cards containing certain information. The cards were then placed in a printing device that printed the information on each card. The very largest supply houses used punched cards and collators.
3. Programmable computer. The start of the information age truly began in 1946 with the first general purpose electronic computer that could really be programmed. Called ENIAC, it used radio vacuum tubes (17,468) and weighed 30 tons. It was “programmed” by setting a series of permanent switches (and some wires) - no “software.” Data was entered via punched cards, which were also used for the output. There was no internal storage capability. Compared to a collator, the ENIAC was much more flexible (handling complex formulas) and much, much faster. (Allegedly, the term “bug” comes from one of the engineers observing an insect getting fried when it flew into the mass of hot tubes.)
4. Commercial computer. Although programmable computers were manufactured by several firms, all of those machines were designed for scientific and engineering purposes, not general business use. That changed in 1949 when the manufacturers designed machines that could be programmed by the buyer/lessee for any purpose.
5. Magnetic drum memory. The use of punched cards as the source of data and programs changed when magnetic drums were developed to temporarily store the programs and the data (that was read from punched cards). Magnetic storage greatly reduced the time to do calculations.
6. “Core” memory. Although a program had to be read in each time it was used, the program instructions were stored on hand-wired “cores” - doughnut-shaped pieces of iron, strung much like beads on hand-soldered wires. A “frame” of core was as large as a car door, but the use of core greatly reduced processing time.
7. Printers attached directly to computers. This made it unnecessary to load decks of punched cards into card printers, which most of the time meant that it was unnecessary for a computer to punch cards. A huge time-saver.
8. Tape replaces punched cards. The use of punched cards required massive amounts of storage space, and the reading and punching processes were slow - the limiting factors. Enter reel-to-reel tape, first created for audio recordings. Each reel replaced thousands of cards, and tape dramatically increased computer productivity.
9. The mainframe computer industry. Until the mid-1950s, only a few companies manufactured general purpose programmable commercial computers. The mainframe industry began when some still-famous names started to make computers: RCA, GE, Honeywell, Burroughs and Univac (actually the first company to manufacture a general-purpose electronic computer). The rise of the industry also involved the rise of the “priestly” class of computer programmers (all software had to be custom-written) and machine operators. These computers were kept in rooms with large glass viewing windows and were very, very expensive to buy/lease and operate.
10. Integrated processing and memory circuits. Although vacuum tubes had disappeared by the late-1950s, computers were still room-size because the transistor-based circuits were still rather large and core memories were still used - all still soldered by hand. Originally developed for the U.S. space program, integrated processor and memory circuits dramatically reduced the size, power consumption and heat output of computers. And, as almost all technical developments do, they greatly reduced processing time and the electric bill.
12. Service bureaus. Early commercial computers were so expensive that only the largest distributors (or any other kind of business) could afford one, and most machines were not used 24/7. Someone realized that his company could rent spare time on its computer to other companies. Renters had to bring their own decks of punched cards (program and data), but only employees of the renter were allowed to load the cards, run the program, etc. (Trade Service, a provider of pricing information to this industry, operated one of the first service bureaus for supply houses.)
13. Magnetic disk drives. These drives supplemented tape, then replaced it. Early hard-disk drives were removable and stored a whopping 100,000 bytes. As technology advanced, removable drives were replaced by fixed drives, and capacity soared to several million bytes per drive. Some computers contained several drives. Disk drives reduced processing time and the per-unit storage cost.
14. COBOL. Because ENIAC was developed for engineering calculations (to determine the settings for aiming large naval guns at moving targets), the first programming language was created with formulas - not suited for printing documents. But businesses were buying the mainframes and needed a business language. Of necessity, someone created the “COmmon Business Oriented Language,” designed to handle the document formatting needed by all kinds of businesses.
15. Minicomputers. Starting in the late 1960s, the emergence of minicomputers drastically lowered the cost of data processing. Companies such as Basic Four and Wang produced them along with IBM, Honeywell, Hewlett Packard and several other companies whose names are lost to history.
16. Packaged software. Until the advent of minicomputers, almost all of the programs used by computers were custom-written, at a great cost in time and money (yet very tailored to a company’s needs). Packaged software dramatically reduced the cost of getting programs, which in combination with lower-cost minicomputers made data processing affordable for many distributors. But the early packages were general (often handling only accounting functions), not specific to any industry.
17. Industry-specific packaged software. This was a natural evolution of generalized software packages. But packages for distributors were not the first to be developed - industries that processed huge volumes of data were the first beneficiaries (e.g., banks). Packages were typically developed by companies that did not sell hardware.
18. Keyboards and cathode ray tubes. Most early minicomputers used small-sized punched cards for entering data. The data was then stored on a disk drive(s). CRTs and real-time operating systems resulted in “interactive processing” - the instantaneous entry and processing of data, including inquiries (e.g., how much of XYZ is in inventory?). Both employee productivity and customer responsiveness increased.
19. Remote data entry and printing. The invention of the modem enabled branches to enter their data by dialing up the computer at headquarters and keying in data live vs. mailing their paperwork to headquarters. Then someone attached a teletype machine (phone-signal-driven typewriter) to a modem, which enabled a computer to print reports at the branches with teletypes.
20. Competition in telecommunications. Until an entrepreneur successfully sued AT&T (the original one, that is), all data transmissions had to take place on AT&T’s circuits. The court that allowed McGowan Communications Inc. (MCI) to compete with AT&T opened the monopoly door just a hair. That led to users being allowed to connect non-AT&T devices to their phone systems (initially, modems and answering machines) and to more competition in phone and data service, and ultimately to the breakup of Ma Bell. Costs of voice and data communications plummeted.
21. Bar codes. At first, bar codes were used in industries selling in volume to consumers (e.g., supermarkets and drug stores), then their use spread - slowly - to wholesale/industrial distribution. Productivity in consumer industries soared and errors at distributors dropped.
22. VARs or computer re-sellers. These came about with the development of minicomputers, which were priced too low for some manufacturers to sell using their own sales forces. Initially, VARs sold only hardware and brought in third parties to provide software. Later, some VARs became “turnkey” providing both hardware and software.
24. Database replaces “flat” files. Until the database was developed, related pieces of data (e.g., customer name and address) could be stored in different files, which made extracts for reports and real-time inquiries quite slow. With a database, related pieces of data were linked together via their addresses, which greatly reduced the time for extracts and inquiries. Again, employee productivity and customer service increased.
25. Personal computer. Technically, the Apple was not the first personal computer. A company called Kramer sold a kit that an aficionado could assemble into a PC. And Radio Shack sold an assembled system that used audio cassettes for storing data and programs. Personal computers used circuitry that was very different from mainframes and minicomputers and could be made for a tiny fraction of the cost of their big brothers.
26. Personal software. The first personal computers came with software for playing games, not for any real computing. Lotus 123, a spreadsheet program, started an explosion of inexpensive packaged software for PCs, including word processing and other functions that helped businesses boost productivity.
27. Microsoft. Legend has it that Gates & company sold the first PC operating system (PC-DOS), which another company owned, to IBM before buying it from the owner, which they did using the money from IBM. Now PCs other than Apples could be taken seriously.
28. FAX machines. Although fax machines were around before WWII, it was not until the late 1980s that they could be manufactured cheap enough to sell in volume. For distributors, POs could be delivered in minutes rather than days, thereby reducing the time it took to get inventory delivered. The cost of doing business decreased while customer service increased.
29. Electronic Data Interchange. The EDI format promised to reduce the time it takes to get inventory and the effort needed to ensure that the right items were obtained - if manufacturers and distributors used the same business transaction formats. As a step toward people-free purchasing, EDI has gained wide but not universal acceptance.
30. Standardized data. This is a step beyond EDI, because EDI does not involve standard item codes. Few segments of wholesale/industrial distribution have developed standard item codes and descriptions, and within those that have, adoption is minimal. Distributors of consumer products have used data standards for years.
31. Local Area Network. LAN allowed computer users to share common data and common programs, thereby reducing cost, and more important, eliminating duplicate data, which sooner or later didn’t agree with each other. The first LANs involved wiring terminals and printers to the computer involved. Today’s LANs are wireless, which avoids large wiring costs.
32. Inexpensive printers. Early PCs used printers that contained a “daisywheel” - a plastic wheel with letters, numbers, etc., embossed at the tips of the petals. The wheel turned until the needed character was in position and a hammer struck the petal. This was vastly cheaper than printers used with minicomputers, but so slow. Print speeds increased with each new generation of printing technology: dot matrix, inkjet, laser. Laser printing was the first technology fast enough and cheap enough to allow replacing expensive, multi-part preprinted forms with plain paper.
34. Laptops. Actually, the first “laptop” was termed a “luggable” because of its weight and suitcase size. The first computer made by Compaq, it used 5-1/4-inch floppy discs and had a 6-inch diagonal green screen. Batteries were not included because the machine had to be plugged in.
35. Back-up devices. When removable hard drives were replaced by those that couldn’t be removed, the ability to store data off-site disappeared. Fortunately, reel-to-reel tape was still being used and became the medium for off-site storage. But reels required night shift operators. Enter the tape cartridge/cassette, cousin to the audio cassette. Load several into a carousel, set the system for overnight recording, remove the cassettes in the morning and take them to a vault.
36. Voice mail. This computer system technology has eliminated most switchboard operators and ensured that messages reach the intended recipients. Directed voice mail allows the caller to select a specific department or person, thereby saving time for everyone involved.
37. PC-based servers. Even though PCs became faster every 18 months or so, users kept pushing PCs to their limits. A PC had to do everything: Handle e-mail, provide Web access, print, access the database. To boost performance without having to buy new PCs every year and a half, multiple PCs were connected together and each PC was used for one dedicated function, e.g., handle all the printers. Systems worked faster and costs were kept in check.
38. Cell phones. The first mobile phone was called “the brick” because it looked and weighed like one, cost several thousand dollars and had to either be wired into a car or used with a large battery in a bag (“the bag phone.”). But the brick, an analog device, broke the telephone umbilical cord forever and turned dead time into productive time.
39. Fiber optics. These devices wired the world with super high-speed connections, which have enabled the computer terminals at branches of supply houses to function as fast as the terminals at headquarters. They also enabled the instant authorization of customers’ credit card payments. The high capacity and widespread use of digital circuits also made possible the transmission of digitized voice calls over the Internet (VOIP), which greatly reduces the cost of talking.
40. World Wide Web. The Internet was actually created in the 1950s for use by U.S. and allied government agencies. More and more commercial companies attached their computers to it in the 1970s and ’80s. But using the WWW was like programming a computer. The availability of point-and-click software and the invention of the browser enabled anyone anywhere to participate in e-mail, post information, search attached computers for information and set up a Web site (which is data on one or more computers).
41. E-commerce. This is the computer-to-computer transaction of business, typically involving a PC communicating with a Web site. E-commerce can be inquiry-only or can involve inquiries, placing orders and paying. The Web sites that are E-commerce sites evolved from early Web sites that simply listed items for sale and required a phone call or FAX to buy something. The growth of both high-speed transmission circuits and PC use fostered the evolution from information-only to all-electronic business. E-commerce will have as great or greater an impact on business as the invention of the computer. Some industries have died and others will - new industries have been born and the birth rate will grow.
42. Global Positioning Satellites. GPS systems allow supply house management to know the whereabouts of each truck and where each driver has been. With this equipment, drivers and outside salespeople can easily find unfamiliar destinations. A GPS system “tells” them how to get to a specified address or place.
43. Flat-panel LCD monitor. More LCD monitors than CRTs are now manufactured - replacing the bulky, heavy CRTs with space-saving screens that also are easier on the eyes.
44. WiFi and WiMax. These terms refer to methods of accessing the Internet wirelessly. A laptop or desktop PC communicates wirelessly with a nearby “router” that is connected to the Internet through wiring. WiFi and WiMax are typically found in public places but can be found in private venues. They are more robust than a wireless LAN. WiFi was the first method developed, so it has less range and throughput than Wi-Max, its successor (which has a range measured in miles). Both increase the productivity of information-using people who spend a lot of time on the go.
45. Cell computers. These combination digital cell phones and computers allow users to participate in e-mail on the go, browse the Web, do word processing and transmit data to other devices and the Internet. They mostly use cell phone services, but some can also use WiFi or WiMax.
Future Trends46. Solid state “hard drives.” These aren’t drives at all. Like memory chips, they contain no moving parts and so should last indefinitely and cost less than mechanical drives. They are already available on premium laptops, and will become standard on all computers.
47. RFID chips replace printed bar codes. RFID is not a misspelling of RF (as in bar code reading). These are chips that emit a signal when “interrogated” by a reading device. Each chip can store lots of information specific to the item on which it is affixed (e.g., expiration date), and that information can be updated. A reading device can be located dozens of feet away, even on the other side of a concrete wall. These chips save time and money in ways that bar codes can’t.
48. Supply Chain Management. SCM will dramatically alter business relationships. SCM refers to electronically linking manufacturers’ and distributors’ computers so that the computers exchange information in order to plan and execute production and product shipment. No people need apply for any jobs. In addition to reducing labor costs, SCM should reduce the amount of inventory in the pipeline while getting products to distributors faster.
49. The plot to take away distributors’ computers. This is gaining momentum at Microsoft and Google. Instead of a distributor owning a computer and licensing the software that runs on it, service companies (ASPs) would own both the hardware and software - just like the service bureaus of 40-50 years ago. The distributor’s terminals would be connected via high-speed circuits, and the distributor would pay only for the hardware and software resources used. No IT staff is needed. The ASP concept could significantly reduce costs.
50. Software support moves overseas. It’s called “offshoring.” Most people have encountered it when they call about a credit card or cable TV or medical claim problem. Few distributors have encountered it, but they will. The high-speed circuits that permit cheap phone calls and access to distributors’ computers have enabled very low-wage information workers abroad to do exactly what support people in the U.S. have been doing. In addition to keeping costs down, offshoring enables 24/7 support at no extra cost.