Faster and more accurate order-taking means greater profitability for your distribution company.
What could happen to your bottom line if you increased order accuracy and speed by 90% or more?
Let’s say it takes one customer service representative (CSR) 10 minutes to take a 50-line order. That means the average CSR is limited to a theoretical maximum of 48 orders in an eight-hour shift with the practical limit much lower due to paperwork, breaks, etc.
Creating a sales order in a typical ERP can take up to 40 clicks, dozens of keystrokes and 10 screens to complete just one transaction. Factor in the potential for error, learning curves and general human inefficiencies and we can probably agree that the volume and accuracy of your daily sales orders per CSR are less than you’d like them to be.
Today we can augment that upfront human effort to place orders into your system.
Artificial intelligence (AI) is revolutionizing the order-entry process and significantly improving customer experience.
Let’s look at how AI can add value to order entry by automating manual processes to free up a CSR’s time and increase order accuracy, suggesting substitutes, cross-selling, offering reorder reminders and enhancing search.
How AI-Powered Algorithms Make Order Entry Faster and More Accurate
The complexities of order entry don’t support order-taking speed or accuracy. There are too many clicks and SKUs to ensure a perfect order every time. It makes your business vulnerable to data-entry errors. Harvard Business review estimates the cost of bad data – which includes data-entry errors and poor data management – to U.S. companies at more than $3.1 trillion per year.
AI is emerging as the go-to solution. AI-enabled tools use three critical computer algorithms to improve order entry:
- Optical character recognition (OCR), which automatically extracts handwritten or typed data from a source document (purchase order, invoice) and translates it into machine-readable text populated in your order management system (OMS).
- Robotics process automation (RPA) extracts data from various sources (emails, spreadsheets) and populates the data into an order management platform. RPA can also automatically scan orders for accuracy or completion, check on in-stock products, track orders and more.
- Machine learning (ML) allows computers to improve their response based on past interactions, new data and other user feedback. Machine learning enables cross-selling, upselling and more.
DataXstream found that distributors leveraging automation in order management:
- Reduce quote and order processing time by 90%.
- Reduce the response time for RFQs by 60%.
- Increase sales by 30%.
These are just a few examples of the efficiencies AI technologies that employ OCR, RPA and ML can bring.
AI software for distribution order management also:
- Reduces training time for new CSRs because of the more intuitive “Google search-like” data retrieval.
- Increases sales rep productivity by reducing manual order entry.
- Improves data accuracy by removing manual processes.
- Reduces the costs associated with sales quotes and order entry.
Benefits of AI-Driven Order Entry
AI-driven order entry offers many benefits that enhance the customer experience and increase the speed and accuracy of your sales processes. Let’s examine the key advantages of using these tools in your distribution business.
AI and Substitute Items: Enhance Order Fulfillment
Out-of-stock items can lead to delays and customer dissatisfaction. It’s a growing problem; one recent survey showed 7 of every 10 customers say today’s out-of-stock situation is frustratingly frequent. An AI order management platform can help in this area by finding the closest substitute for a backordered or out-of-stock product in real-time, improving the odds that the customer’s needs are met without significant delays. For example, a material or product search using AI technologies with machine learning can reduce the time to match a replacement from minutes to seconds – such as one brand of welding gloves to another.
Your CSR doesn’t need product expertise; the software handles the replacement recommendation which can increase your order processing efficiency by 98%. By providing alternative options when a requested item is unavailable, distributors can maintain customer satisfaction and avoid the negative impact of stockouts on their bottom line.
AI and Cross-Selling: Boost Average Order Value
AI offers intelligent decision support to enhance the knowledge of even the most inexperienced CSR. AI can analyze a customer’s order and recommend complementary items the customer may have missed (fittings with hose, or safety glasses with gloves), increasing the average order value and ensuring a comprehensive solution for the customer’s project. This kind of “do you want fries with that?” approach improves profits and leads to a more satisfied and loyal customer base.
AI tools can also help you personalize the customer experience by leveraging prior purchases to suggest upsells to your CSR (or even directly to customers for an Amazon-like experience on your ecommerce website).
These tools empower your sales or customer service reps to focus more on providing a positive customer experience — instead of worrying about screen navigation and form completion.
AI and Reorder Reminders: Protect Existing Revenue
A slowing economy always illustrates the importance of maintaining your existing customer base.
AI software can help you protect your revenue by prompting CSRs to remind customers to reorder. According to Indian River Consulting Group, more than 80% of orders are repeat for most distributors. These tools can automate these processes by analyzing order history and initiating customer reorder emails, SMS or push notifications. AI order management software can also streamline the reordering process by generating purchase orders (POs) directly in the system.
This proactive approach helps keep customers fully stocked while ensuring that repeat revenue streams are protected. This also releases your sales reps to focus on, as IRCG says, making markets, rather than taking orders.
AI and Semantic Search: Empower Sales Representatives
Semantic search, powered by AI algorithms, enables a more intelligent and contextual understanding. Traditional search engines query via keyword-based matching. Semantic search algorithms focus on meaning and context, going beyond the keyword for a better result.
The practical effect of semantic search is that you don’t need a heavy dose of product knowledge to use these systems. Distribution companies rely heavily on veteran CSRs to quickly pull up products at the point of order entry because they’ve committed certain SKUs or products to memory.
AI-powered search can greatly benefit sales representatives who still need to learn product IDs. But it can also give veterans who want to sell more products they may not know as well the confidence to sell those to existing customers. AI software featuring semantic search helps reps quickly and accurately locate products based on natural language queries, ensuring efficient and accurate order processing.
Unifying Order Entry and Customer Data for Sales Insights
Integrating order-entry systems with customer relationship management (CRM) platforms is the key to building a single source of truth and maintaining a comprehensive view of customer interactions, product preferences and transaction history. AI-powered tools enable your sales team with insights fueled by this data.
By integrating CRM and order entry systems, customer service representatives have access to real-time order information, allowing them to promptly address customer inquiries, resolve issues and deliver a seamless customer experience.
Combining CRM and order entry systems also allows sales teams to view customer history, preferences, and order details in one place, making upselling and cross-selling more effective.
Empower Your CSRs
Modern AI-enabled software is quietly transforming how we do business. Applying these tools at the point of sales can improve your operational efficiency, increase sales and improve the customer experience. If you’re willing to accept a little help from an AI, CSRs can get more done, faster – and more profitably.
Change can be daunting, but often, it’s the only way to make progress. If you’re looking to enhance your business efficiency, consider the possibilities AI brings. It’s not just about staying competitive, but about setting new benchmarks in customer satisfaction and operational excellence. Today might just be the right time to explore that.
Benj Cohen founded Proton.ai, an AI-powered CRM for distributors. His company’s mission is to help distributors harness cutting-edge artificial intelligence (AI) to drive increased sales. Benj learned about distribution firsthand at Benco Dental, a family business started by his great grandfather. He graduated Harvard University with a degree in Applied Math, and speaks regularly at industry events on the benefits of AI for distributors. Benj has been featured in trade publications including MDM, Industrial Distribution, and Industrial Supply Magazine. His company, Proton.ai, announced a $20 million Series A round of funding in 2022, led by Felicis Ventures. In 2023, Benj was recognized in Forbes 30 Under 30 – the first leader in distribution to receive such recognition.
Tim Yates is the CEO of DataXstream. He has over 20 years of experience with the past 15 focused on SAP systems architecture and program delivery. He has a broad range of experience with a pragmatic, get-the-job-done approach to engagements. Tim specializes in the development of SAP technical strategies and services for clients having successfully led multiple programs and projects. His extensive SAP technical and functional background has enabled him to thrive in environments of all sizes and complexities.