After nearly three years of uncertainty and disruption, economic conditions continue raising alarms. Now, businesses face a likely recession alongside continued inventory shortages and unprecedented inflation. For better or worse, experts believe it could be an unusual recession.
According to the Wall Street Journal, unlike in previous downturns, there’s exceptionally low unemployment, and the number of job openings resembles the best economic times rather than the worst. Additionally, businesses have historically high cash reserves compared to previous recessions. Companies could use this financial buffer to potentially outlast a prolonged dip in consumer spending and its economic ripple effects. But will that be enough?
Distributors should begin or continue pursuing new levels of operational efficiency
What does a looming recession mean for distributors? You must protect your profit margins to successfully bridge this new risk, regardless of what economists call it. Business leaders should prioritize identifying and implementing operational efficiencies while eliminating leaks in the order-to-cash process. Accelerating current or planned digital transformation initiatives, like optimizing your ERP or other digital tools, could unlock the advantages you need to stay competitive and gain market share while other businesses shrink.
Enterprise resources planning software, like Epicor P21, sits at the center of a distributor’s technology stack and plays a critical role in a company’s ability to outpace these economic headwinds. Streamlining these systems and their processes could help your business avoid cost-cutting like reducing headcount or similar short-term tactics that will likely be hard to recover from when things normalize. According to our recent study (full report coming soon), 85% of leaders in manufacturing and distribution – from Owners to Managers – worry they won’t be able to hire enough new employees over the next five years to offset those voluntarily leaving the workforce for other opportunities or, most likely, retirement. Consider this when deciding which lever you should pull to protect profits.
Quick wins that increase productivity and improve the customer experience
Whether you’re using P21 or another system, an ERP isn’t designed to do everything your teams need to increase efficiency and productivity. Occasionally, you’ll have to integrate additional software to extend the functionality of your system of record.
How your business currently processes critical inbound documents like purchase orders and invoices is an excellent place to start your operational investigation. The next area likely to yield quick wins is evaluating how you process outbound customer communications like order acknowledgments. All these processes historically rely on manual workflows moving data to and from your ERP.
Our new survey also revealed that nearly 82% of distributors continue to process documents manually. Because processing these documents is critical to their businesses, 50% have an entire team dedicated to manual processing. Given hiring constraints and other factors driving companies to do more with less, having an entire team dedicated to an outdated practice does not lend itself to the agility necessary to compete.
Order processing doesn’t have to be a cost center
If you’re like these distributors, your customer-facing teams spend a lot of time rekeying line items from inbound sales orders into your P21 instance. While this seems like table-stakes, there are opportunities to improve this process that can rapidly save your business money while reducing errors and improving customer satisfaction.
According to research by the Hackett Group, the cost to manually process a purchase order can be as much as $9.05. And that’s just accounting for the time it takes to rekey data from a purchase order into your ERP. The average customer service representative spends between twenty and thirty minutes on data entry for every order they manually process. Unfortunately, the average error rate is about 30%, which results in those same CSRs spending between 2-3 hours daily correcting errors in orders they previously processed.
By implementing Conexiom, our customers using P21, like Field Fastener and AccuformNMC, realized benefits that have helped them continue to grow their business and remain agile during economic instability and supply chain disruption like we’re currently experiencing.
Field Fastener Modernized the Processing of Critical, Inbound Documents
Field Fastener’s reputation is built on meeting customer requirements for cost reduction, material availability, and quality. Living up to their reputation requires superior systems that enable their teams to achieve great outcomes for their customers. They obsess over providing a competitive customer experience. It’s a foundational part of their company’s culture.
Field Fastener needed to modernize how they processed documents like purchase orders, invoices, and vendor order acknowledgments. Their primary goal was ensuring customers received the correct parts on time and in full. To accomplish this, Field Fastener looked for a technology solution to integrate with Epicor P21, their preferred ERP.
After Field Fastener implemented Conexiom’s solutions for Sales Orders, AP Invoices, and Order Acknowledgements, they could process complex, multi-line orders in minutes without needing to involve a person. Automating just one customer’s orders saved them 400 hours annually. These time savings enabled them to reinvest in revenue-generating activities that also increased employee satisfaction. And they automated orders from many more than one customer.
AccuformNMC Reduced the Cost of Processing Orders and Boosted Productivity
AccuformNMC (ANMC) serves a diverse market by offering an expansive portfolio of safety products. To manage the distribution of their many products, ANMC uses Epicor P21 to streamline operations. It allows them to integrate information across inventory management, warehousing, purchasing, and reporting.
While some of ANMC’s customers adopted EDI, most continued to submit orders through traditional channels like phone, fax, and email. CSRs had to manually key into Epicor P21 any purchase orders received outside EDI – a costly and error-prone method for processing documents. It added unnecessary complications and friction to the existing complexity of serving customers from an extensive portfolio.
Beyond the standard pains of manual processes, the CSR team frequently received purchase orders in inconsistent formats that didn’t always contain relevant information. Reps spent time they didn’t have interpreting and verifying orders, reducing the overall rate at which they processed orders. ANMC received such a high number of orders daily that solving inefficiencies and finding a solution became necessary.
After implementing Conexiom’s Sales Order Automation Software and integrating it with P21, ANMC eliminated manual tasks through order entry software and reallocated their CSR team’s time to more valuable tasks.
Integrating Conexiom with Epicor P21
Field Fastener and National Marker Company reduced costs and increased productivity by automating how data from purchase orders and other documents entered P21. They leveraged Conexiom’s P21 API connection, a much less labor-intensive process than rolling out EDI; these companies ensured they had clean data flowing into P21.
Conexiom extracts critical information like prices, quantities, and part numbers before validating it against your current data and existing rules. Discrepancies are corrected ahead of time, so there are no issues with order fulfillment. This allows companies using P21 and Conexiom to achieve what Field Fastener calls “lights out processing” with their customers. Inbound documents like purchase orders process automatically. This ensures P21 operates with accurate data that doesn’t require a human-in-the-loop to validate or manually process.
Businesses can decrease costs, drive growth, and improve business agility by automating order and invoice processing and passing accurate information directly into P21.
To learn more about the benefits of pairing document automation with P21, check out our new ebook, From Order Entry to Epicor P21.