Distributors today are asked to do more with less – sometimes much less – particularly as the tight labor market shows no signs of relief anytime soon.
Enter technology.
Tech tools range from major implementations that can transform your business to add-ons that provide flexibility and productivity at lower levels of investment. The key is identifying where technology – such as Customer Relationship Management software, a new logistics platform or Enterprise Resource Planning tools – can free your team up to do more important tasks.
In a recent Technology Leaders Panel from Distribution Strategy Group, Jonathan Bein hosted a panel of technology leaders to help distributors figure out how to best deploy tools for just this purpose.
Panelists included:
- Kristen Thom, Director of Product Management, White Cup (CRM, BI, Pricing)
- Matthew Lafferty, CEO, Curri (Logistics)
- Frank Heenan, Group Vice President – Distribution and LBM, Epicor (ERP)
Meet the next generation’s expectations.
It’s long been a challenge to attract younger workers to traditional distributor jobs. “Distribution is not a glamorous industry,” Heenan said. “The ancillary challenge is selling your organization to potential employees.” Technology can help you close that sale.
It’s been a long time since people expected to stay with one company for their entire careers.
“There’s wisdom in the older way of thinking,” Lafferty noted. “But that’s a different way of thinking than a lot of the new labor has about jobs.”
This cohort of employees wants to see the technology they use in their daily lives incorporated into their jobs. They don’t want to be handed “green screens, mainframes, dumb terminals with sticky notes all over the keyboard,” according to Heenan. “They don’t know what to do with that.”
They also want to know that if they leave, the tools and skills they’ve learned in this position can translate to their next position.
“People are asking, what are the tools I’m going to have to enable me to succeed, both in this job and to grow my skillset for my larger career,” Thom said. “When you have a new customer, those first interactions are so important; onboarding your new employees, same thing.”
Automate administrative tasks.
But attracting new talent isn’t the only way technology can help you deal with the challenging labor market. The impact can be even more direct, by helping your current employees operate more efficiently.
Start by identifying the low-hanging fruit within your business. What are the tasks being done by your sales team that are more administrative than value add? Are there ways to automate some of those tasks?
The answer is likely yes.
For example, “your low-hanging fruit may be in the quote-to-cash swim lane,” Heenan said. Consider what channels are generating your quote requests. If they originate in email or an online form, the process of entering that information into your systems could be automated.
“You always want to have a level of interaction, but that personal touch doesn’t always matter everywhere,” Heenan said. “The most efficient manner is the one that answers their question, that gets them on to doing what they need to do.”
This automated quote entry does more than just eliminate the manual entry requirement; it also reduces human error – and it can improve the service the customer receives at every point in their interaction with you.
“This is where integration becomes so imperative in our day-to-day,” Thom said. “There’s a huge need for visibility across teams and across systems.”
If your teams – from sales to marketing to warehouse – have that visibility into customer touchpoints, they can respond more consistently to customer needs.
The key is to start early.
“There are processes like (quote-to-cash) that exist in your businesses today,” Heenan said. “Identify break points and inefficiencies, and then re-engineer what a future state might look like.”
Improve the ecommerce pipeline.
Many of your internal processes will be low-hanging fruit for the application of technology. But another often-overlooked area is your ecommerce platform, especially if you view it only as a standalone purchasing channel.
eCommerce should not be just for purchasing, Thom said. Customers also want to use it to research and compare products before they’re ready to pull the trigger on a purchase.
“There are all these different tools that can drive further traffic, drive better engagement and provide more visibility of what’s available to them,” she said.
For example, automating related product suggestions or alternative options can help your customer find what they’re really looking for more quickly and streamline your salesperson’s conversations with them.
But it’s not a “Field of Dreams” situation, Heenan warns. “You can’t just build it and they will come. You need to have a plan behind it.”
Step one is understanding what people want and what people need. Don’t try to create a solution for a problem that doesn’t actually exist.
“Before you build anything, make sure that your pattern matches what the customers are looking for,” Lafferty said.
Improve warehouse and logistics productivity.
Tech tools can be used to help improve more traditional tasks for distributors, as well.
“Distributors want to sell more. That is their prime objective. If you can enable a sales team to make a sale and not have to wait a week for a truck, for example, you’ll be able to make more sales because of availability,” Lafferty said.
He advised that there are many “plug-and-play” tools already on the market that can help you better manage deliveries.
“It’s a big capital expenditure to focus on buying a truck, paying a driver and the risk associated with that,” he said. Tracking tools can help you build a more elastic fleet to ensure that trucks and drivers are available where you need them when you need them.
In addition to tracking software and automation, robotics can play a more significant role in your warehouse.
“Robotics are flowing through the warehouse doing the picks, and those picks have no human intervention,” Heenan said. “And then the replenishment of that inventory in a machine or in a crib is all being done via EDI (electronic data interchange), with no touch.
“You could get anywhere between three to five FTEs (by using robotics), depending on what you’re doing and how you’re doing it.”
Strengthen customer relationships.
How severe the labor challenge is for distributors is hard to quantify. Estimates from different sources range from 10% to as much as 50% down, depending on the specific area of work.
Yet, because distribution still relies on relationships, it’s critical to maintain a quality customer experience no matter how those customers come to you. Implementing technology solutions can ensure that consistency of experience even if your staffing levels aren’t what they used to be.
The key to choosing the right solution is starting at the beginning. Evaluate your operation to identify breakdown points and redundancies. Where are errors occurring? How is information communicated across the different customer touchpoints? What can you do to provide your team more opportunities to provide additional value and continue to differentiate your business from the competition?
And remember, small changes can have a big impact.
“A lot of distributors want to do giant migrations or change everything all at once,” Lafferty said. “I think it’s more important to find where you can get low-hanging fruit and make that happen. There are a lot of great options out there to give you the powers of Amazon without being Amazon. We like to make them just as competitive as Amazon.”
