Making Software Do More Heavy Lifting

By Jason Bader

These are strange times, indeed. There have been so many unprecedented challenges in the last two years, that I might be getting a bit jaded and reserved. The challenge of the day is the current labor crisis we’ve found ourselves in.

My business coach referred to our current situation as “the mass resignation.” A bit dramatic, but we all seem to thrive on catchy expressions to help make sense of difficult situations. We have a broken supply chain that is causing undue stress on our internal associates. At the same time, we’re seeing unparalleled demand from our customer base. There is also a battle raging between remote and premise-based work environments. Is there any wonder why our associates are reexamining their career choices? Meanwhile, we have a business to run and markets to serve. While I could certainly spend time being  concerned with recruitment and retention, I would rather focus on how we can better utilize technology to help mitigate this labor shortage.

It is no secret that distributors underutilize the capabilities of their ERP. By some estimates, the usage percentage can be as little as 15 percent of the features and functions. This has got to stop. We paid for the whole enchilada so let’s use it as much as we can. This lack of usage is highly prevalent in the procurement and management of inventory. Over the years, our teams have created elaborate workarounds because they are unwilling or unable to use the system as intended. No system is perfect and they sometimes have glaring flaws in their logic. But their odd methodology is typically the result of user influence – hundreds and hundreds of users. Why would our existing method be superior to the collective wisdom of all these individuals?

Learn how to make the software do the heavy lifting. Populate the fields and tweak the settings so that the suggested purchase order is in alignment with what you would have come up with had you slogged through your laborious process. These manual instinctive methods take up valuable labor hours and teaching the madness to a team of others causes the rampant expansion of even more time spent. We don’t have the luxury of wasting labor hours anymore. Look at the process and determine what parts should be delegated to the software and which can only be accomplished by a human.

As I was thinking about the functional areas of our organizations, I could have lumped sales and marketing together but we understand them today as two separate disciplines. In the marketing arena, we have several tools to help produce touchpoints without having to physically push the buttons. Having spent the better part of 25 years married to a brilliant marketing professional, I have had a front-row seat to the evolution of customer contact tools. I have worked with a few, but I must admit that I fall way short on utilization. Email and social marketing tools, if set up right, can automate campaigns designed to follow leads and get that audience to take one more peek at your company. What happens when someone clicks on a link in an email generated by your campaign? Is that click sent to a human to follow up? Or is a drip campaign created that prods that potential customer through the sales funnel? What happens to a “like” on Facebook? Are we nurturing that impression? While I am a novice in this arena, I know that there are levels of automation that reduce the need for human intervention.

Here comes the meaty one – sales. There are several ways to augment our sales efforts without having to apply labor. For years, we threw bodies at lagging sales revenue. If our compensation was set up favorably, it didn’t cost us much to put feet on the street. Today, we don’t have that same luxury. E-commerce has helped us add to our traditional sales force. Rather than a replacement, I see companies treating their web stores as another branch or salesperson.

For those existing, or yet to be discovered buyers, we need to up our game in this arena. Many companies are doing amazing catch-up work in this arena. Don’t get caught in the Field of Dreams “if I build it, they will come” trap. Before you build it, take time to ask your customers what they want in an e-commerce platform. Survey first, spend second. If you are trying to drive new customers to e-commerce, get educated about search engine optimization (SEO) and search engine marketing (SEM). Paid placement works. It doesn’t do you any good to be relegated to page two of the search results.

For those of you who deploy customer vendor managed inventory (VMI) programs, there are new technologies to help you strip out the labor hours involved. To clarify, a VMI program typically involves housing a number of your SKUs in bins on a customer site. My preference is the customer buys the initial stock, but consignment is a lessor option. The site bins have an agreed-upon min/max of quantity. It is common that a distributor salesperson visits the site and does a periodic inventory to build a replenishment order. While this is a nice way to stay in front of the customer, it is labor-intensive. In the past, ERP-connected vending machines were all the rage; but the ROI was seldom realized and someone still had to come replenish the bin. When sites became restricted in 2020, these programs suffered. Today, there is a new technology using RFID that boasts contact-free VMI. It was born out of an industrial distributor and is poised to revolutionize this labor-intensive sales strategy.

Now more than ever, data is king. Unfortunately, distributors often struggle with how to best use the massive amounts of data their ERPs collect. In the early part of the century, we referred to the process as “data-mining,” but that relied on examining historic data to see what happened. Today, we have moved beyond the historical business intelligence arena and have access to futuristic artificial intelligence (AI). I recently did a podcast with Proton AI founder Benj Cohen. He explained that AI doesn’t simply rely on historical ERP data but takes an omnichannel approach to the collection of inputs to form predictions on sales opportunities. Think about integrating the inputs from your marketing efforts, sales communication, ERP transactions and web analytics. Will these insights make it easier for your sales team to discover opportunities?

Before I leave the sales arena, I want to share a suggestion from my younger brother. When I asked the question about how technology can mitigate labor challenges, he reminded me that call routing can help utilize customer service associates more effectively. When you have multiple locations, think about how many customer service hours are spent waiting for a call to come in. This is a tremendous underutilization of talent. Call routing can help mitigate associate absences or shortages. Do customers really care where they are calling if they get the answers they need?

I’m in deep now, so I better keep going. Let’s jump over to the accounting side. I have recently been exposed to some of the automation and labor savings available to the sales completion process, aka accounts receivable. There are services out there that help automate the process of sending invoices and collecting payment. Furthermore, these service providers have options to automate the past due notification process. Many of the credit managers I meet use some form of automation to augment the receivables process. These services often jump the fence over to the payables side. Worth exploring unless you like adding bodies to your accounting team.

Recent government data shows there are more than 11 million job openings in the United States and around 9 million people unemployed. I’m no math major, but even I can see that we don’t have enough people to meet demand. We're not going to hire our way out of the labor challenge. Instead, we must break out of the current paradigm by using the technologies outlined above to get creative. See what’s out there and get creative. You might even have some fun doing it.

About the Author
Jason Bader is the principal of The Distribution Team. He is a holistic distribution advisor who is passionate about helping business owners solve challenges, generate wealth and achieve personal goals. He can be found speaking at several industry events throughout the year, providing executive coaching services to private clients and letting his thoughts be known in an industry publication or two. He recently launched his first podcast, Distribution Talk. He can be reached at (503) 282-2333 or via email at jason@distributionteam.com.