Sand Source Services is a leading provider of logistics services for the oil and gas industry. Specifically, Sand Source operates a network of transload facilities across North America including eight plants in Canada and a 350-acre facility in Bakken, North Dakota, that specialize in the storage and transloading of Silica sand, otherwise known as frac sand, used in the stimulation of non-conventional wells. Facilities are staffed 24/7 and often experience nonstop activity.
Situation
Sand Source has provided frac sand transloading services since 1998. More importantly, the company strives to provide timely information. As business began to skyrocket, the company set out to minimize customers' loading times and maximize sand suppliers' access to inventory information by embarking on an ERP solution project. Sand Source is well known for providing superior service and value to their customers’ supply chain logistics, as well as having a forward-leaning culture of embracing technology solutions. For a growing company in a fast-growing industry, however, internal resources and infrastructure to take on a business enhancement project of this scale were scarce. The company called on Wipfli to help improve its information timeliness by creating greater visibility into inventories, automating processes, and enhancing communication with suppliers and customers.
The two biggest challenges that Sand Source faced were technical and cultural in nature. With an outdated and at capacity legacy database, they desperately needed a more modern ERP solution. Additionally, they knew that change management would be key to the projects’ success. With current employees who were very comfortable and familiar with the old system, it became important to manage the change internally and get employees involved in the new solution; thus helping the employees to embrace and learn the new system.
Strategy
The ultimate goal of the project was to make it as fast and easy as possible for suppliers to ship and store their sand products at Sand Source and for customers to track and load those products. Streamlining Sand Source’s own processes was also essential to the overall objective, and any technology that would be introduced would need to include accounting for country specific regulations and taxes. Wipfli’s solution to all of Sand Source’s needs and challenges was Microsoft Dynamics® AX.
Working closely with Sand Source to flesh out the features and functionalities its software users expected, Wipfli then sent to work building an inventory system that would allow Sand Source to track which supplier's sand went where and when.
The new software implementation required assistance with a thorough business process analysis. The entire technology effort included programming the manually intensive, internal process of managing transactions and loads, both inbound and outbound.
Wipfli helped Sand Source go beyond the traditional transloader in its service offerings by creating a custom, web-accessible inventory management program and database. The proprietary application provides up-to-date data regarding purchase and shipments, helping customers track their product through the logistics value chain—information that is essential for project planning, internal reporting, and reconciling invoices.
To further customize and automate transloading, Wipfli and its custom applications experts at SpiderLogic collaborated to develop an easy-to-use touch screen application. The state-of-the-art technology provides easy data entry, captures load weights recorded directly from scales, and lets Sand Source staff record new transload orders.
Because Sand Source is international (Canada) and interstate, Wipfli also assisted with the arduous task of staying current with the complex and changing tax laws as well as state and local regulations. Wipfli helped to identify and address issues involving sales tax, international tax, and other various state and local taxes, working to secure savings wherever possible and ensure compliance at every turn.
Benefits
To be truly competitive and differentiated in today's frac sand and energy boom, Sand Source's strategy was to become as automated as possible. Mission accomplished.
Sand Source's newly created automation has eliminated errors and accelerated the loading process letting trucks hurry in, fill up, and hurry on to their fracking destinations with transaction printouts in hand.
The software solution and web portal has given sand suppliers much-welcome tracking visibility into their inventories, further creating real-time order status. Sand Source now enjoys streamlined administrative processes, improved customer service, and annual data entry savings of at least $160,000 in direct labor costs. Wipfli's tax experts assisted with sales tax, international tax and other various state and local taxes, working to secure savings for Sand Source wherever possible and ensure compliance. Additional savings were realized through a Section 174 analysis and R&D studies.
Sand Source is reaping the benefits of a competitive advantage in the industry by leaping ahead with tax-savvy strategies and inventive technology to efficiently manage and accelerate the fervent rush for frac sand. With its fast self-service capabilities at transload facilities and quick access to information through the portal, both customers and suppliers recognize Sand Source as a company that’s easy to do business with.
