Blog Post
Incorporated in 1925 and with a base of operations in St. Louis, Missouri, Graybar is a wholesale distribution company specializing in electrical, communications, and data networking products. The firm maintains a nationwide presence in approximately 300 locations and provides supply chain management and logistics solutions.
With an employee base exceeding 8,500 and annual revenue of over $7 billion, Graybar is on the Fortune 500 list and is recognized as a true thought leader and industry pioneer within the electrical distribution space.
In the words of Rose McDaniel, VP of Field Administration and Operations, Graybar prides itself on being “where [customers] are, when [they] need it.”
Recently, Conexiom had the chance to sit down for a roundtable discussion with Rose McDaniel, along with Magnus Meier (SAP, Global VP for Wholesale Distribution) in a webinar titled, How Graybar’s Order Engine Ensures Customer Operations Run Smoothly.
Graybar & Conexiom: The Story So Far
Graybar and Conexiom first began working together in 2015. At that time, senior Graybar stakeholders searched for a way to identify and provide an optimized service to their most strategic clients in a manner that delivered peak levels of both efficiency and excellence: this was the project that started the partnership.
With so many customers on the books, Graybar’s strategic clients (i.e., a business with US-wide operations that makes frequent, high-volume orders for different branches) represented high value. It was the opportunity to deliver a streamlined yet exceptional service to these customers and centralize the related data processes that led Graybar to first explore the potential of automation technology.
After a piloting period, Graybar soon began to see unprecedented gains in terms of operational efficiency and productivity – particularly with those strategic customers not equipped with the EDI technology needed to make electronic orders.
Driven to optimize customer experience (CX) and improve service delivery, Graybar scaled its relationship with Conexiom. As Rose McDaniels puts it, the relationship was – and is – built around “technology that would streamline [the customer’s] experience, without them ever knowing about it.” Conexiom worked alongside Graybar to eliminate the maximum number of redundant, low-value tasks and put employees’ minds at ease that automation wasn’t here to replace them – it was here to aid and optimize their workload.
Be Easy To Do Business With
Distributors really need to focus on being easy to do business with. If you cannot rival Amazon-like speed and experience, where you automate the interaction as much as possible, and free up your team to actually focus on the customer and provide this high level of personalization, it doesn’t bode well for you.
-Magnus Meier (SAP)
But this, of course, is set against the context of an industry that has faced numerous complicated challenges in recent years.
It’s becoming increasingly difficult to hire new talent; and when distributors do find the right people to bring onboard, it can be a struggle to retain those employees. Uncontrollable geopolitical events – the coronavirus pandemic not least among them – present significant challenges to the industry.
The automation imperative, then, has a wider, more far-reaching impact on distributors. It serves as a defense mechanism against industry challenges, and a key driver of continuous and holistic business improvement.
Building a Resilient Business
When we talk about a well-oiled order engine, we’re talking about several tools and technologies that sit alongside each other within that automated environment.
This is seen most notably in the trend toward building internal centers of excellence. In Graybar’s case, Conexiom’s practical application extends beyond order processing.
Automating Special Pricing Agreements
Wholesale distribution often involves navigating many special pricing agreements across suppliers. Graybar uses Conexiom with thousands of suppliers to load those pricing arrangements directly into its system.
Rose McDaniels sums it up: “as everybody is aware, in the supply chain these days, price increases happen so frequently, based on supply and demand… Conexiom has saved us so much time with loading those agreements.”
A key lesson here is that Graybar, in a big way, managed to get ahead of supply chain disruption by automating special pricing agreements long before the challenges occurred. This was possible because Graybar was proactive – they didn’t wait for a crisis to unfold before closing the automation gap.
Previously, tax errors represented the highest error rate within Graybar’s operations. These errors cost the company significant money – both in rectifying them and paying fines imposed following a state audit.
Graybar and Conexiom worked together to find an automation solution and, ultimately, developed a way of loading state tax certificates into the Graybar system that ensured valid, accurate information was always available to audit.
The labor, cost, and time savings Graybar now enjoys in its tax processing speaks to the power and potential of automation technology.
Optimizing the Graybar Order Engine
Early on, Comexiom explored the possibility of extracting important purchasing data from emailed orders within Graybar’s system. By doing this, we could determine the top 500 customers, and Graybar used this information as a target list of priority customers whose orders could be processed more effectively with automation.
From there, Graybar has gone on to identify the ordering mechanism for inbound orders. SAP holds that data, and reports can be accessed to instantly see which customers would be a good fit for order automation.
“If the POs that [the customers] are sending in are valid and repeatable, we map them, and we get those customers loaded into Conexiom so that we can service that customer more effectively.”
-Rose McDaniels (Graybar)
Graybar’s advice for starting an order automation project
Having been on the journey of change management and process improvement, Rose McDaniels highlighted a few best practices and takeaway pieces of advice for other companies looking to kick-start an order automation project.
- Stick with it: Mindset changes take time to effect. An order automation project may represent a significant area of opportunity for your business, but it won’t take hold immediately. Primarily, it will likely take some time to reassure your workforce that automation technologies will directly benefit their work and won’t be the trigger for lay-offs.
- Nominate a change agent: There must be a dedicated person within your organization to own the automation project. Someone to orchestrate actions and ensure successful execution. Graybar had a full-time staff member to work with Conexiom who “has been just instrumental in bringing on customers, providing a quick turnaround time […] and being the point of contact within Graybar.”
- Test and pilot: No project or initiative should be rolled-out until you’ve had the chance to see it in action. Doing so will enable your organization to avoid any service failures from launch.
Working with Conexiom
“In the early days, I was down in the weeds and on the phone when I needed you guys, and you stepped up.”
-Rose McDaniels (Graybar)
Since the beginning of Conexiom’s partnership with Graybar, the scope of work and operations have significantly expanded. Now there is an entire team on the Graybar staff who work with Conexiom.
The Graybar team, in the words of Rose McDaniels, are “not shy […] and will escalate to me if you’re not providing the level of service we’re used to, but our work together has been streamlined and mutually beneficial, with no drop-off in service or communication.”
Happily, this trend looks set to continue: “I have not gotten any escalations, so that’s all good.”
SAP, Automating Distribution, & the Future
SAP’s point of view on automation is perhaps best seen from a technical angle. “As companies move over into the cloud, the cloud [has become] ‘the big equalizer,’” Magnus Meier says. “All the solutions running in the cloud help distributors to either catch up or leapfrog their competitors if they decide to make that step.”
From the SAP perspective, the priority for distributors is to increase efficiencies; automation figures as one of the critical tools to enable that transformation.
‘Automation’ may take the form of robots inside the warehouse, inventory optimization tools, or any of the various other manifestations we see throughout the industry – whatever the case, the distribution priority is to improve internal processes.
Sometimes we hear [distributors] talk about building ‘a digital twin’ of an organization’ […] you have this process inside, you understand where your process breaks, where you fall short in serving your customers – where you can do better – and automation tools like Conexiom really make a difference to improving this operational role.
– Magnus Meier (SAP)
Projections for 2023 & beyond
Rose McDaniels shared the insight that, while Graybar is expecting some changes to occur throughout the distribution industry, the organization is predicting other issues to remain static for the foreseeable future.
In the wake of geopolitical events such as the coronavirus pandemic, there appears to have been enough time for distributors to pivot their strategy and bounce back. Therefore, we can expect the supply chain to stabilize, recover and improve. Graybar projects that those challenges and disruptions will decrease in prominence as we move forward. On the other hand, there appears to be no end to labor issues.
This trend underscores the importance for distributors to sustain continuous improvement and other efforts to refine processes.
Questions From the Audience
As the roundtable concluded, attendees of How Graybar’s Order Engine Ensures Customer Operations Run Smoothly had an opportunity to ask some questions.
How does Graybar quantify error reduction?
Initially, the project managers and senior stakeholders set some key benchmarks.
Graybar tallied the time needed to key in data manually and factored in error rates along with employee salary. From here, it was possible to calculate the financial benefit of moving orders over to Conexiom.
Saving time, ultimately, was the focus metric and key benchmark.
Graybar sees this as the true mark of process improvement. Rather than quantifying error reductions in terms of costs and lay-offs, Graybar prefers to see it as a question of productivity gains and resource allocation.
What customer characteristics make a good fit for Conexiom?
Essentially, any customer that represents a repeated high cost to serve: as Rose McDaniels puts it, “any of your customers that don’t have the technology to send orders electronically.”
Whether those customers are large or small, if they are demanding in terms of order volume, turnaround times, frequency, or requests, automating their order processing is an opportunity to streamline operations.
In light of process improvements, do you see more openness to automation from the workforce?
With such a large workforce, there is still some work to be done in overcoming a fear of automation. Education, training, and increasing adoption of the technology are still ongoing.
That said, it is consistently the record-breakers, award-winners, and biggest hitters among Graybar’s employees who advocate most strongly for automation technology.
It is the most successful reps that favor automation technology – and that is no coincidence.
Moreover, millennial and Gen Z candidates are actively searching for job opportunities with technology embedded into the role. It is a sign of a forward-facing culture and healthy prospects of advancement. Staff quickly jump ship when that technology is missing, and talent attraction is much more difficult.
Powering Improvement, Driving Change
The key component, then, in the wild success of Graybar’s order engine, has been automation – and, specifically, the functionalities it enables.
As the Graybar journey continues and our partnership goes from strength to strength, we can look forward to the coming years in the distribution sector with a proactive attitude and a mindset of continual improvement.
Contact us now if you’re interested in implementing an optimized sales engine for your organization or learning more about the tremendous potential offered by our automation solution.