How to Kill the Zombies in Your Distribution Business - Modern Distribution Management

How to Kill the Zombies in Your Distribution Business

Identify and eliminate the "zombie" processes in your distribution business that waste time and drain resources, boosting efficiency and productivity.
Distribution concept design for efficient product delivery

Zombies are lurking within the four walls of your distribution company.

I don’t mean the horror-movie monsters, though. I’m talking about business processes that continue to shuffle along mindlessly, like the undead, eating up your employees’ brainpower and time without generating much value.

I first heard about the concept of process zombies from Diana Kander’s presentation at an Association for High Technology Distribution event. Since then, I’ve been thinking about the zombies I’ve encountered in distributors’ businesses.

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You know how every zombie movie has a character who gets bitten but hides it from their friends? They pretend everything’s fine until they turn into a zombie and attack the group from within.

Many businesses do something similar. They might have a broken way of doing things, but they’re in denial. So, instead of fixing it, they blame the people who aren’t following the rules. But when people keep breaking the rules, that’s usually a sign that the rules themselves are the problem.

It’s scary to look closely at what’s wrong, but you have to. Bad workplace habits and systems slowly kill your business by wasting your team’s time and energy. They keep your people from doing work that actually makes money and helps the business grow. The longer you ignore these problems, the worse they get.

For example: the returns process, which can be a real nightmare in B2B – long and complicated, touching multiple departments across multiple systems.

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Let’s say a customer realizes they need to make a return. They contact their salesperson. The salesperson fills out a form and sends it to the customer service rep. The CSR must remember what the company’s restocking fee policy is. They also need to know the return location policy: Are they trying to optimize inventory or send the product back to its original location?

If the product in question is defective, the CSR must pass it over to Purchasing, which then needs to request a credit from the vendor. If the vendor asks for missing information to process the return, Purchasing may have to run it back down the line to get an answer — and I’m not even halfway through yet! I haven’t made it to the warehouse or finance departments.

When a distributor’s returns process touches that many roles across that many departments, inefficiencies stack up: 10 minutes here, 20 minutes there. That time could be better spent on revenue-generating activities and relationship nurturing. In fact, there’s a good chance that each person along the way was in the middle of something productive when they had to step away, perform their part, and then transition back into whatever they were doing.

Here’s another example:

The CSR role is particularly prone to inefficient processes. For example, what happens when a CSR has to quote a non-stock order? Suddenly, your customer service rep is vendor-facing, and they’re taken away from their area of expertise. They may not have the right relationship with the vendor to properly negotiate with them on the customer’s behalf.

Which means they’ll have to lean on someone in purchasing. So, now you have a CSR with too much on their plate who depends on other departments to get things done.

You also have to look at inefficiencies that have a direct financial impact on your business, such as restocking fees.

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Let’s say you charge your customers a 10% restocking fee, but your vendor charges you 20%. That means you lose 10% every time there’s a return. If you let those fees go unbalanced for too long, you’ll be up against a whole horde of zombies on your P&L statement. The same goes for credits: If you credit your customer but forget to get credited by your vendor, you’ve created another zombie – one that has an appetite for your bottom line.

How to Track Down Inefficiencies in Your Business

So, how can you uncover the inefficient processes that may be plaguing your business? Blaming your people for not following the process is merely a scapegoat and rarely fixes anything.

Instead, start by going hunting:

  1. Begin with the transaction. Each quote, credit, rebill, debit memo, return or invoice leaves a trail of digital exhaust in its wake. For each transaction type, follow that trail and look for evidence of inefficiency. How many roles and departments are involved? How many follow-up emails do your people have to send? List all the steps and handoffs. (If you start to get tired just doing that, then the process is probably too inefficient.)
  2. Take note of where the ball gets dropped and look for patterns. If the entire process is a headache, like it can be with returns, consider consolidating so that a dedicated team handles it from end to end.
  3. Equip your team with the right tools to knock down the hurdles in the process. Automation, collaborative platforms or dashboards can streamline communication, reduce manual tasks, decrease errors and keep your team from getting bogged down.

If you don’t have enough visibility to piece the processes together, then you may need to consider upgrading your systems and de-siloing your data.

If various people in various roles across various departments are losing time they could be spending on the value-generating work that’s at the top of their job descriptions, that means it’s time to figure out how to put them in a better position to succeed. Because the last thing you want is for them to become incurably inefficient and frustrated with their jobs.

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