The Role of Automation in Enhancing Operational Efficiency

Distribution margins are slim. Greater efficiencies can help distributors meet heightened expectations, serve customers better, and expand their margins simultaneously.

We’ve seen it: One building products distributor increased order efficiency by 10X, decreased errors by 90%, and enhanced user experience through automation. 

Here’s how automation can improve operational efficiency:

Enhance customer service  

Smoother operations mean better customer service. Automation can improve customer service in many ways:

• Quicker response times in areas such as quoting and pricing, order processing, and responding to customer inquiries
• Fewer errors, leading to fewer mistakes and returns, and greater customer satisfaction
• Personalization at scale, analyzing customer data for automated relevant recommendations
• Providing a unified experience across all customer touchpoints
• Greater service availability through 24/7 self-service online and chatbots

Streamline order processing 

Automation also improves efficiency by automating repetitive tasks, such as order entry, invoicing, and payment processing. This reduces the time and resources required to process orders and also reduces errors.

For example, product matching features take information from a PO and match it with what’s in your inventory without manual intervention. This feature is a huge productivity driver, enabling your teams to sell more—faster.

Improve the effectiveness of sales operations 

Automate repetitive, time-consuming tasks to increase efficiency, reduce errors, and allow the sales team to focus on closing new sales and growing existing customer relationships. 

Automation can help sales teams manage their funnel more effectively by assigning leads, tracking interactions, and providing insights into lead quality and conversion rates. Automation can also trigger follow-up emails, schedule reminders for sales calls, and provide sales reps with real-time access to customer information so they can focus less on searching for updates and more on building relationships and closing deals.

With greater visibility, distributors can also identify new sales opportunities and plug profit leaks.

Optimize inventory management

What if you had real-time visibility into what was on your shelves? Automation provides real-time visibility into stock levels, demand patterns, and inventory turnover rates, enabling distributors to optimize inventory levels, reduce stockouts, and minimize carrying costs. 

Automated inventory management systems can trigger reorder alerts when stock levels fall below a certain level, automate replenishment orders, and optimize warehouse layouts for efficient storage and retrieval.

Improve supply chain management 

Automation can enhance supply chain visibility by integrating with suppliers, logistics providers, and other partners. This enables real-time tracking of shipments, monitoring of delivery performance, and proactive management of supply chain risks. 

Automated supply chain planning tools can optimize production schedules, inventory levels, and transportation routes to minimize costs and maximize efficiency.

Optimize pricing 

Few pricing strategies are genuinely data-driven, and many require a certain level of human calculation or even guesswork. Automated pricing tools use AI to analyze market dynamics, competitor pricing, and customer behavior, enabling distributors to set optimal prices that maximize profitability and competitiveness.

Dynamic pricing algorithms can adjust prices in real time based on factors such as demand fluctuations, inventory levels, and customer segments. The result: a faster and more efficient path to profitability without much risk or effort.

Drive greater visibility through advanced analytics

Automation enables distributors to collect and analyze large volumes of data from multiple sources, providing insights into sales performance, customer behavior, and market trends. 

Advanced analytics tools use machine learning and predictive modeling to identify patterns, forecast future demand, and make data-driven decisions that optimize operations and drive business growth.

Break down silos 

Manual tasks across their organizations bog down distributors in areas such as:

• Sales
• Order processing
• Quoting and pricing
• Inventory management
• Returns and exchanges
• Contract administration

Technology solutions exist for each of these functions. However, the more siloed tech you add, the more the snarl of technical debt will lead to manual tasks to work around tools that don't play well with each other. Having a patchwork quilt of technology and multiple screens to toggle through to find answers slows everyone down.

Implementing automation to pull these disparate pieces together is the answer to efficiently finding hidden revenue opportunities in your data.

Automation Success Stories‍

With automation, the following can repeat itself across the business, regardless of the sales rep or the customer they’re serving:

• A customer emails an RFP to three distribution companies. They’re looking for a fast turnaround. Fortunately, your company uses automation to match the products to your ERP, turning out a PO within hours, not days. The faster a distributor can return a quote, the more likely they will get the order. 
• Frustrated with pricing strategies that relied on human guesswork, one distributor turned to automation to optimize this process. The ProfitOptics Pricing Optimization tool models pricing scenarios to lessen customer churn and increase profit. In seconds, the tool reviewed over two terabytes of stored data across a million customer accounts (with unique contract agreements), making recommendations that recovered more than $50 million in annual gross margins. 

These two stories illustrate the potential for working more intelligently and efficiently with automation.

Don’t settle for the way it’s always been done. ProfitOptics offers cost-effective solutions to optimize existing tools while streamlining operations with AI-powered automation. Find out more.