departments needed to gear up to become OTC (over the counter) compliant. This involved some substantial changes such as added documentation, longer stability studies, FDA notices, additional product testing and some process changes. The extra costs give reason enough to be thankful for living in the U.S., where supplements are protected by law and not subject to excessive pharmaceutical costs. In August 2005, NOW purchased another Canadian distributor, Produits Biologiques Himex Inc. (www.inari.ca) in Montreal, Quebec to support our existing Puresource efforts. The former owner was dying and had been in prolonged negotiations to sell his business. Unfortunately, he passed away before a deal was complete, but NOW did purchase the company from his estate and kept a solid business afloat that likely, otherwise, would have gone out of business. Himex imports many certified organic foods and sells a brand of packaged foods called Inari, largely to stores in Quebec. The goal is for Himex to leverage Canadian house brands (Herbal Select) and to establish NOW as a dominant brand within French health food stores. Politically, we can only hope that unity will prevail among the provinces as Quebec retains its distinctly unique home within Canada. As the good book says, “Behold how good and pleasant it is when brothers dwell together in unity.” (Psalm 133:1) THE ORACLE AGE Early in 2001, NOW management began discussing the need for a much larger computer system to drive future growth. We anticipated making many acquisitions, expanding into foreign countries, opening multiple distribution centers and needing a world-class warehouse system for GMP and better efficiencies. A consultant recommended that we look at a super-duper, new, all-encompassing system known as ERP (Enterprise Resource Planning). Until that time, NOW had used a very simple, low-cost system known as FACTS, which did not have any bells or whistles and was very easy to operate and fix. It lacked many of the options that we wanted and so management decided to move forward with the purchase of an Oracle system. Initially, our board approved the sticker-shock cost of $3 million to buy, build and install an entire system in order to fulfill all of our company goals and dreams. This was quite a step up from our last system that had cost under $100,000 only 10 years earlier and included all software, hardware, printers, one year warranty and 15 terminals! Somehow, we pressed forward and hired an outside consultant company to review our processes and set up Oracle to fill our needs with customized software. The consultants ‘lived’ in NOW’s offices for over a year and they seemed to be more learners than teachers for this latest-and-greatest Oracle 9i system. In June 2002, NOW went live with Oracle and the company practically shut down. For several weeks we were unable to ship many orders, unable to answer the deluge of phone calls and unable to conduct many basic business functions. Our sales phone service levels plummeted to under 20% (# of calls answered within 45 seconds) compared to our norm of 85%+. Basic actions like entering orders took, and still take, much longer than our former, simple, low-cost system. The lure of Oracle’s superior reports and information turned out to be a major problem because our expensive new system operated at a crawling pace compared to what we had before. In order to support our 2003-2005 95
