The topic of inflation and possible recession is on the mind of businesses and consumers alike right now. The consumer price index rose to 9.1% in June, a new 40-year high, according to the US Bureau of Labor Statistics released in July 2022. Additionally, inflation at the wholesale level climbed 11.3% in June compared with a year earlier.
As wholesale and distribution businesses continue to feel the pressure of inflation, supply chain disruptions, labor shortages, and increased price pressures, there are ways organizations can streamline their sales order management processes that will help increase the bottom line.
Take control of your inventory
A recent article from Modern Distribution Management shared that Stanley Black and Decker launched a series of cost-saving initiatives that will save the company money. SBD president and CEO stated on July 1st that the “entire organization is focused on taking the necessary steps to reduce our inventory to generate cash flow.”
To meet customer demand in a stock-shortage situation, organizations often resort to what is referred to as “buffer stock”—ordering more material from a supplier to be able to meet customer demand in a stock-shortage situation. The problem is that organizations now carry the extra cost for ordering more than they need.
If an organization has standardized on a digital core for their ERP backbone, they will have access to all the data across their organization and can see that data in real-time. For inventory, having access to the real-time master data allows organizations to look internally at alternate locations before placing an additional buffer order. Customer service reps can quickly see that there may be additional stock at another branch within the company that can be leveraged and consolidated into a single shipment directly to the customer. Real-time data and product availability directly drive customer satisfaction, better inventory positions, and increased sales.
Sales Tool Automation
Complex, legacy systems require sales teams to manually input data and negotiate between multiple screens to be able to find product and customer information.
Not only does this slow down a representative’s ability to provide a quote and close the deal—but it makes the business prone to human errors which can cost millions to the organization. Recent advances in sales automation solutions, such as DataXstream’s OMS+ ia, employ AI technologies like Robotic Process Automation, Machine Learning, and Optical Character Recognition (OCR) that can reduce quote and order processing time by as much as 90%.
Suppose a large customer sends a PDF file that contains 100 pages of materials in an email and then asks for a quote. There may be over 1000 different kinds of materials on this file. Even with several customer service reps, it could take days to manually input those materials into your system one by one. An order management solution such as OMS+ can generate this kind of quote within a few minutes.
Documents received by a customer (in PDF form, Excel, Word docs, etc.) can be read by OMS+ which extracts and captures images from the document to create editable, searchable data that is then categorized. This categorization allows OMS+ to sort the material and offer precise recommendations. Automation tools aid in eliminating the human factor of miscalculation and menial busy work, giving sales teams time to focus on customers.
Reduce New Employee Training Time
Industrial Distribution Magazine’s annual Survey of Distributor Operations stated that distributors are most concerned about rising costs and worker retention. Getting new employees up and running quickly is imperative. If your ERP software is too complex to use and requires significant training time, then you are wasting valuable time and money.
For organizations in the wholesale distribution space, onboarding new employees, or an existing employee that is new to a position, can often take months. Legacy ERP systems are historically complex and have complicated screens that are not intuitive to use. Reducing the amount of time it takes to onboard an employee will allow them to start producing faster. And creating a better training experience will ultimately result in better employee retention.
Improve Performance, Improve Sales and Quote Conversion Ratios
Last, but certainly not least, the quicker a sales associate can provide a quote to the customer – the quicker they win the business. Customer service reps need to be able to conduct material searches and inventory look-ups, update orders, and access customer-specific pricing, as well as see availability and pricing for particular delivery dates. They need to be able to do this in real-time for hundreds of products and have those results come back in sub-seconds.
Performance is the number one item that must be addressed from an order execution standpoint if you are going to increase sales and win market share. Information has to be at the fingertips of your sales teams. They need to be able to aggregate real-time data from many sources, such as customer order info, inventory and pricing numbers, into one dashboard to create a sales order. And it must be delivered quickly. Access to real-time data will also allow you to analyze your customer order information and make adjustments quickly.
Profit margins for distributors are thin and any improvement in delivering customer quotes or sales orders quickly, as well as assessing and making adjustments in real-time, will ultimately generate more margin and reduce profit leaks.