Small Businesses – Then and Now

Pittsburgh across the Monongahela

Pittsburgh from across the Monongahela

In the picture above, notice the smaller buildings in the forefront… facing the river. Those buildings predated the massive skyscrapers in the background. Over the decades, those buildings have housed many small businesses. Some companies have grown into bigger businesses; some have failed. But during their time as small businesses, they all made an impact on their employees, their customers, and our country.

Today I want to spotlight one particular small business. In 1968, Allegheny Wholesale Drug was my first assignment as an IBM Systems Engineer. The salesman on the account was Bernie Nowicki. I haven’t seen Bernie in years, but I understand he is still in the Pittsburgh area.

Shortly after I completed my initial training at IBM, I was sent with Bernie to meet the folks at Allegheny Wholesale Drug company. The co-owners were Jules Levine and Arnold Lazarus. I was more than surprised by their cordial greeting. I believe Arnold muttered something about having to deal with another trainee, but considering the circumstances, both men were unbelievably polite.

Bernie had convinced these men to rent unit record equipment. For the uninitiated, unit record machines predated computers by more than thirty years. They were also known as electromechanical accounting machines. They were programmed using wired control panels, read eighty-column punched cards at speeds up to 150 cards per minute, and performed basic computations… and printed basic reports.

Normally, the equipment was delivered to the customer’s location and within a week or so, the customer’s business applications were converted and running smoothly on the new automated devices. That wasn’t the case at Allegheny Wholesale Drug. The equipment had been delivered more than a month prior to my visit and was doing nothing more than gathering dust.

I later learned that the Systems Engineer assigned to the account before me did virtually nothing in preparation for the delivery of the equipment. He was telling our manager that he was spending his days at the customer’s location and telling the customer he was working on the project at the IBM offices. No one seemed to know what he was really doing.

The analysis and design documents – if they were ever completed – could not be found. I had to start from scratch. From a learning standpoint, it was a marvelous opportunity! From a business standpoint, it was a nightmare.

The applications expected by Jules and Arnold were billing, inventory control, accounts receivable, and sales analysis; we at IBM referred to it as BICARSA.

To make it happen, I had to design an invoice form, a monthly statement form, other miscellaneous report forms, and the layout of the punched cards. The invoice and statement forms then had to be submitted to a company that specialized in preprinted forms and an order placed. In the meantime, I had to begin wiring control panels for four different machines.

The system design called for bin files to support pre-billing. Bin files meant that small card holders were placed on the shelves in the warehouse. When a worker picked items to fill an order, he or she would also pick punched cards for that item. Pre-billing meant that an invoice went to the customer along with the items ordered.

Therefore, the process went like this: a customer phoned in the order. The order was hand written and passed out to someone in the warehouse. The items on the order were picked from the shelves along with the punched cards. Then the cards were passed to someone in the ‘computer’ department who had to go to a tub file and locate name and address cards to match the customer. The cards were then sent through the 402 accounting machine to print the invoice which was then passed back to the warehouse to be matched with the order being packed in a box. When the invoice was matched with the order, the box was sealed and loaded onto the truck.

In the meantime, the 402 accounting machine sent data over a cable to the 526 Summary Punch machine that punched a card indicating the total information for the invoice. That summary card would be used later in the month to print monthly statements.

Nothing to it! Right. It took me weeks (or was it months?) to get everything up and running. Every Monday morning, Arnold would come in and ask me when I expected to have everything ready to go. My typical answer was “It shouldn’t be more than another week or so.” In truth, I had no idea! There was so much work to be done and I represented the entire staff. The Allegheny Wholesale Drug employees were too busy keeping the company going without the newfangled automation.

While I was creating inventory master cards (even a small wholesale drug company carries thousands of items – different drugs, difference strengths, different packaging) the people who would eventually run the IBM equipment were writing the invoices by hand.

What I found utterly amazing is that two of those employees had most of the inventory information memorized. They would take the hand written orders, fill in the prices, and do the math to complete the paperwork. Every once in a while they would refer to a very large book to find a price, but most of the time they went from memory.

Were there mistakes made? I would imagine so, but their accuracy must have been uncanny. Otherwise, they’d be on the phone constantly answering customer complaints.

Finally I had everything working and we switched to the new system. No more would those people have to complete the invoices by hand. The procedure would be streamlined and we’d have the added bonus of automated inventory control!

The first day, the trucks were four hours late leaving the warehouse.

Fortunately things improved. In fact, the equipment met and surpassed all expectations. A few years later, the company had grown and the unit record equipment was replaced by a computer.

I later learned that Arnold had mixed emotions when I finally completed the job. It seems that every Monday morning, after conferring with me as to my target date, he’d go around and place bets against me. I’m not sure how much money he made in that fashion, but we were all thrilled the day he had to pay everyone else.

I worked in many small businesses during my IBM career, and met a lot of fine people. However, Jules and Arnold top my list of people to work for. Their employees were all treated extremely well with a great deal of respect. I think that’s the best trait of small businesses – the owners still recognize the value of the employees.

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