Embracing Automation Can Help Distributors Weather Supply Chain Issues

There are six fundamentals to creating a mature digital supply network that incorporates automation, Esker's Nick Carpenter explained in a recent MDM webcast.
Automation

Distributors who increasingly automate business processes and embrace the use of artificial intelligence can be better situated to respond to customer service issues and supply chain problems. In a recent MDM webcast, “Building A More Resilient Supply Chain,” Esker Business Development Manager Nick Carpenter said distributors who automate processes for order management, order-to-cash and accounts receivable can improve order-fill rates, reduce personnel overhead and improve customer and employee satisfaction.

Using automation and AI also will likely help some distributors more easily recover from supply chain problems brought on by the COVID-19 pandemic, he added.

“We saw this extended period of supplier shortages, liquidity pinches, along with drastic demand fluctuations,” Carpenter said. “Companies were on the end of demand, falling off a cliff, circa March and April of last year. Others saw their business drastically increase overnight and they’re struggling for increased capacity. So, no matter which end of the spectrum you were on, it was likely a year where a lot of folks had challenges, and it’s really forced folks to regroup and think, ‘Are we going to weather this next storm? Is our business model agile enough? And, should we start to look at digital transformation as a way to help get in front of some of these trends in the future?’”

Distributors can use technological advancements to create a resilient supply chain by using the “3 Ps” approach, Carpenter said.

  • Planning: Rely on data-driven decisions and incorporate an enterprise resource strategy.
  • Productivity: Understand the pitfalls of lean practices and share a sense of service excellence across distribution centers and offices. This can be done in part by creating global templates.
  • Trade partners: Streamline order-to-cash and procure-to-pay methods, which will impact working capital, margins and customer experience.

Create a mature digital supply network

Carpenter said there also are six fundamental ways companies can employ a mature digital supply network:

  1. Digital development: Optimize product lifecycle management with advanced digital tactics.
  2. Synchronized planning: Provide significant efficiencies through synchronization.
  3. Intelligent supply: Reduce cost through advanced technologies, models and capabilities.
  4. Smart factory: Unlock new efficiencies through a more connected, agile and proactive factory.
  5. Dynamic fulfillment: Boost customer service through new levels of speed and agility.
  6. Customer connected: Create seamless customer engagement from inspiration to service.

“For example, the smart factory, or smart distribution center, is something we’ve seen Amazon perfect with having robots being able to completely fill-in work autonomously to fill, pick and pack orders,” Carpenter said. “I think of other companies that have Google Glasses as a way to enhance their technicians’ ability to repair equipment and maximize uptime, but of course Esker’s experience is really on that connected customer side of the house. So, creating a seamless experience with your customers is a way to improve their overall engagement with your business. It’s making sure that every touchpoint is as seamless as possible and that you’re able to meet them, how they want to be, how they want to do business with you as well.”

Carpenter cited several examples of automation-based improvements:

  • Distributors focused on credit management can create custom credit applications and determine approval workflows to keep risk under control.
  • For order management, companies can eliminate manual data entry and manage resources based on metrics.
  • Automated operations also can assist companies with collections by sending out automatic payment reminders, while AI functions can perform document recognition and triage.

Watch the MDM webcast in its entirety here.

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