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Today's technology tools, including relational databases and ERP systems, can generate important and insightful information. Although these solutions can save money and vastly improve the internal operational efficiency of any warehouse, don't stop there. The biggest benefit of strategic data intelligence comes not in using it internally, but taking a proactive stance in turning this information into management metrics and fresh, profitable services for customers. An integrated technology solution is vital to collaborate with customers and partners, and to share data with co-workers.
For example, data can streamline and boost warehouse management practices. Technologies today can measure such things as picker productivity ' reporting instantly which employees are most effective and monitoring which workers are in the warehouse. You can gain instant visibility into your work force to better plan, manage and execute.
Radio frequency identification (RFID) tag technology is not only a boon to your warehouse efficiency, but the data collected by these inventory management tools can be provided to customers as a value-added service with high profit potential. Distributors can use this information to offer customers strategic advice about optimum inventory levels and improved product mix, for example. Active and real-time data intelligence ensures that you will have the minimum required quantity of the right product, at the right time, at the right place. Bottom line: you stretch your inventory asset investment while maintaining high customer service levels. In addition, leveraging your data in strategic ways can help you streamline warehouse and customer processes. With careful planning, you can use technology to turn traditional weaknesses into newfound profit-generating strengths.
Arthur Schuman Inc., a leading importer of fine cheese, did just that. The New Jersey-based company reduced per-order processing costs by 30 percent as a result. But Arthur Schuman also translated those internal cost savings into better outward customer service: 'Before, when a customer called about the status of an order, the best we could do was go track it down manually and call back,' says Kevin Lehoullier, vice president of finance at Arthur Schuman. 'Now, with access to accurate, real-time data, we can answer most customer questions on the initial call ' and that's just one more way that automation has made us more competitive.'
To offset the pressure to reduce gross profit margins in an industry obsessed with pricing, distributors must provide better customer service to justify higher handling costs. Using technology to deliver better service to customers ' such as instant access to information and analyses that prompt proactive operational improvements ' you can not only stave off profit margin erosion but also increase your value to customers and improve customer loyalty.
For instance, through technologies, I've seen companies raise their inventory and outbound shipment accuracy to more than 99 percent, boosting solid customer satisfaction levels. Promising customers a service level could drive new business by equipping your sales team with powerful differentiating sales tools and ensure the opportunity for your company to differentiate from competitors.
Franzus Co., a distributor of travel accessories, had a manual forecasting system that was inadequate at forecasting demand for the company's extensive product portfolio. Inaccurate forecasts were resulting in out-of-stock items, error-prone orders and dissatisfied customers. Four months after