More than 90% of Fortune 1000 companies have experienced supply-chain disruptions due to the coronavirus pandemic, according to Accenture. Seventy-five percent of those companies reported “negative or strongly negative impacts on their businesses.”
These statistics only confirm what many industry leaders already know. In the pandemic, transportation is highly restricted, and critical personnel are stuck at home. Volume has stalled, and delivery times have extended. None of this is good for the smooth functioning of supply chains.
How can enterprises skillfully react to these unprecedented supply-chain pressures, and guarantee business continuity? By realizing that the current pressures make digital transformation projects more urgent than ever. Digital transformation is no longer a buzz phrase, something to be focused on next quarter. It is an essential requirement.
The COVID-19 crisis is forcing distributors and manufacturers to optimize their costs and cut non-critical expenses wherever they can. Ideally, organizations want to reduce their operational spending, while keeping their workforce intact. To achieve this, traditional and dated processes need to be upgraded to modern processes, right away.
The supply chain is a complex entity, and not all of it is within an enterprise’s ability to influence. However, in the section of the supply chain that enterprises can influence — where the delivery is from their own warehouses to their end customers — there remains a lot of room to operate.
For example, one area where digital automation can have a big impact is the handling of sales orders.
The pressures of COVID-19 have added weight to the shoulders of manufacturers and distributors. As delivery times have gone haywire, companies are swamped with customer enquiries. People are confused and panicked, and they’re demanding clarity.
To continue to service customers well — and for manufacturers and distributors, customer relationships are everything — enterprises need their customer service representatives (CSRs) firing on all cylinders. This is the only way they can reduce order-cycle times, and show stability and predictability at a time when many organizations are rattled.
However, because of the lockdown, CSRs are working from home. This means they are lacking their office environment, and access to their usual tools. They are probably not as productive as normal, with emotional stress added to the mix. On top of this, customer enquiries are at an all-time high, and are more complex and novel than ever. Right when CSRs need as much bandwidth as possible, they are more squeezed than ever.
What, however, is a major drain on CSR bandwidth, even without COVID-19? Manual order processing. On average, our organization has uncovered that CSRs spend one third of each workday manually keying in purchase orders received from customers.
The majority of manufacturers and distributors rely on this traditional, by-hand method. This process was always slow, and traditionally has been prone to error. Purchase-order backlogs would sit overnight, or cost overtime to process. The unnecessary cost could be as high as $26 per order. And right now, the cost inefficiencies of this dated approach are magnified.
However, simply put, sales order processing can be automated. Using custom-built software, a company can automatically and accurately convert e-mailed purchase orders into sales orders in the enterprise resource planning (ERP) system without any intervention or handling by a CSR. Through the power of automation and artificial intelligence, order processing is sped up from hours to moments. It becomes possible to achieve 100% data extraction accuracy.
This form of digital automation significantly accelerates the sales-order process, helping companies win back thousands of hours of human capital. Those hours can then be redeployed on tasks and priorities that add value to the organization, such as real, high-quality customer service and other revenue-generating processes.
There are many areas and many business processes where automation can drive digital transformation projects for enterprises, and open up new efficiencies and possibilities. Whether it’s sales orders or somewhere else, all leaders need to be considering where they are still burdened with manual processes, and how they can upgrade them.
As the COVID-19 pandemic was developing into a truly global crisis, Sandy Shen, senior director analyst at Gartner, said it best: “This is a wakeup call for organizations that have placed too much focus on daily operational needs at the expense of investing in digital business and long-term resilience. Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly now, and over the long term.”
The COVID-19 crisis is teaching us that digitization is the route by which manufacturers and distributors can secure and safeguard critical business objectives during disrupted times, and react to irregularities in the supply chains on which they rely.
Supply-chain disruptions bring significant challenges that call for quick and effective solutions. What distributors and manufacturers need are high-impact, high-ROI initiatives that empower them to do more with less. Sales order automation is one example of such an initiative. It lets enterprises maximize their revenue opportunities and generate significant cost savings, without committing extra resources or effort. The end result: business continuity and supply-chain resilience — now, and beyond the crisis.
Ray Grady is CEO of Conexiom.
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