Every distributor wants to reach a state where they’ve eliminated nonvalue efforts and can create experiences that keep customers coming back. To get there, they need to start by understanding their workflows.
Identifying where to improve workflow is a crucial part of upgrading. Improving the right process will provide greater impact to your business and result in a better ROI.
It can be tempting to strategize a complete overhaul with multiple upgrades and a swift timeline, but this can lead to an ineffective implementation.
Instead, keep a narrow focus when improving workflow optimization. To better identify where to implement solutions in your business, follow these three steps:
Step 1: Evaluate performance
Areas that are good candidates for upgrades will generally fall under one of the five key value streams: order intake, shipping and delivery, consolidation, returns and inventory. Improving performance in any of these areas will help you get the best ROI, since they directly impact revenue.
When operating effectively, a distributor should be able to:
- Create a quality customer experience with error-free intake.
- Provide quick and reliable delivery at optimal costs.
- Spend as little effort possible on organizing and picking orders, with optimized picking and delivery channels.
- Return items to the warehouse efficiently while providing good a return experience for the customer.
- Maximize inventory dollars with the ideal placement and amount of inventory.
If your business is lacking in any of these areas, start there and continue to narrow your focus.
Step 2: Identify process leverage points
Once areas of poor performance have been identified, it’s time to examine processes.
If a process is impacting performance, it may be:
- Consuming unnecessary time and effort.
- Leading to errors or rework.
- Causing approval delays.
- Constraining revenue.
- Failing to use data collection or efforts.
- Adding conversion costs.
- Including duplicated efforts or nonvalue activities.
Determining what processes are causing issues will help you see where solutions can provide the most impact.
Step 3: Identify the why
The final step is to find the root cause of the issues identified in step two.
Some common causes include:
- A lack of information, or information not being conveyed effectively
- An environment that limits people’s capability and capacity
- Ineffective decision-making and task completion methods
- Inefficient use of money or facilities
Knowing these causes will help make it easier to decide what solutions are needed.
How to select solutions
In the same way that distributors need to keep a narrow focus when identifying areas to upgrade, they also need to stay focused when selecting solutions.
There are a variety of tools available to distributors, including attractive technology advancements such as ERP software and robotics. However, it’s important to be strategic in considering what upgrades will provide the most benefit.
Take time during step two to really understand where process issues lie, so that you can recognize those leverage points. It’s also important to spend time dollarizing and time-calibrating any solutions, so that you can better evaluate their potential benefit.
Focusing on functionality rather than form will help you choose a solution that can create an optimal workflow.
Here are some proven, digital solutions distributors can implement:
- Social media: Using social selling and customer influencers on platforms such as Twitter and Facebook can help distributors find new opportunities for revenue.
- Visual workflow software: These workflow tools create visual representations of operations that help distributors identify inefficiencies or stalled processes.
- Optical character recognition (OCR): OCR can automate certain processes by taking images of text and converting them into a machine-readable format.
- Process automation: Software robots can be used to automate processes in your digital systems, such as extracting or inputting data.
- Online bots: Bots can be used to upgrade websites with cognitive searching and chat services.
- Traffic management technology: Use traffic management to get data on fleet performance and route efficiency. You can also use GPS tracking to give customers real-time updates about their orders.
- Mobile technologies: Handheld devices for pickers can cut down on the errors and bottlenecks that often occur with paper entries.
When it comes time to implementing solutions, be aware of how many upgrades are taking place and how quickly.
Implementing multiple solutions at once can overwhelm a business and prevents you from giving any one upgrade the attention it needs.
It’s also important to complete implementation in small stages. Rushing an implementation may cause it to outpace your business’s ability to adapt. Instead, focus on upgrading in steps, adding new upgrades and complexity over time.
How Wipfli can help
At Wipfli, we use our knowledge and experience to help your distribution business get the upgrades it needs. We help you identify and implement targeted solutions, so that your business gets the most from work optimization strategies and digital tools. Contact us today for more on how we can help you maximize your distribution optimization.
Sign up to receive more distribution industry information or continue reading: