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The productivity imperative for wholesale distribution
The wholesale distribution industry has contributed 25 percent of the total productivity gains in the U.S. economy during the past 15 years. In other words, the industry has made a disproportionately large contribution to the nation's productivity. Despite this impressive track record, wholesaler-distributors must continually improve productivity without compromising service levels to remain relevant.
Technology will play an increasingly important role in this improvement. In a Pembroke Consulting and Progressive Distributor magazine study of senior industrial distribution executives, we found that improving employee productivity was the most important business outcome from their technology spending. The productivity rationale trumped all other concerns among small and mid-size distributors.
Wholesale distribution has been at the forefront of using technology to reduce repetitive, low value-added activities. The largest internal productivity improvements in distribution industries have come from substituting information technology for repetitive human processing activities such as order processing, billing, inventory control, delivery route scheduling and warehouse management.
Customer self-service technologies are another cost-effective way to boost the productivity of sales and service personnel, especially when used with customers whose level of spend does not justify labour-intensive interactions.
For example, C.H. Briggs Hardware Co., one of the largest independently owned hardware distributors, identified its unprofitable customers and analyzed why it was losing money on each one. One customer placed multiple orders each day, increasing transaction costs and lowering profits to an unacceptable level. Rather than losing the account, Briggs' salesforce demonstrated how much the customer could save by ordering on the company's website once a day. The customer saved time and stopped receiving multiple orders and invoices, while Briggs was able to lower its transaction and fulfillment costs so much that the account became profitable.
The productivity of the average outside salesperson can also be increased. Automation can help salespeople devote less time to tasks contributing to their main objective of driving revenue and profits through selling. E-mail and electronic reporting will cut down on the time salespeople spend on repetitive tasks. Routine administrative activities, such as following up on sales credits, will be automated. Wireless handheld devices provide salespeople with the ability to access information, answer questions, or retrieve customer information throughout the sales day.
Looking ahead, productivity will only grow if distributors can cost-effectively apply technology. However, technology alone can neither remedy customer satisfaction problems nor replace a clear business strategy or provide specific business requirements.
Wholesale distribution executives should be sure to have fact-based answers to the following questions before making their next technology investment:
- What problem are you trying to solve with this technology? What will happen if you do not solve this problem?
- What quantifiable productivity improvements will your company gain from this technology versus continuing to perform tasks manually?
- Will this technology allow us to automate or eliminate internal activities that add costs to our business but do not deliver value to customers or suppliers?
- How, if at all, will this technology help you to serve customers better? Will it reduce error rates? Will it improve our self-service capabilities for customers?
Fact-based answers to these questions will help a wholesale distribution company reap the full productivity rewards from their technology investments.
For full article: www-1.ibm.com/businesscenter/
With thanks: Adam J. Fein, Ph.D., founder and president of Pembroke Consulting. www.PembrokeConsulting.com.
The Buzzzz
The Buzzz.... Adding hand-held functionality to your workforce
Many wholesalers and distributors are now finding a need for on-the-road functionality in the areas of sales, service and deliveries. Fortunately, these capabilities are available, and can be seamlessly integrated with Blue Link Elite at very little effort and cost. Some of the applications include:
- Route Sales, Direct Store Delivery (DSD)
- Electronic Proof of Delivery
- Field Sales
- Field Service
- Surveys, inspections and/or data collection
- Invoicing and Payments
Some of the benefits that will be accrued to users include:
- Reduction or elimination of mobile inventory shrinkage
- The ability to operate in a paperless environment
- A reduction in average collection period
- Improved response and delivery times
- The ability to dispatch and service customers in real time
- Price and promotion compliance
- Many other.
The handheld portion of this solution is designed to work on Intermec or Symbol ruggedized handheld devices and has the ability to operate in a fully wireless environment.
Think flexibility - think convenience- think productivity - think service - think Mobile. It's a new way of thinking!
(With thanks: Tyler Buskard - Beltek Mobility Solutions)
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