Do you remember the year 2009? Barack Obama became President of the United States. Circuit City closed its stores after almost 60-years in business. The US economy was struggling after losing more than 2 million jobs, we had the Miracle on the Hudson, AIG reported $62 BILLION in losses, the Federal Reserve had to give AIG $30 billion MORE in aid, and then AIG announced it would pay more than $450 million in bonuses … and a little-known start-up appeared by the name of Uber …
Who could have predicted the impact Uber would have on the taxi industry? But even more amazing is the impact Uber had on the new car sales industry and the rental car industry. Uber is even impacting parking garages in major inner cities where people are no longer owning, storing, or parking their cars! Uber has even had an impact on new home purchases as people start to wonder if they need two or three garage bays. When people talk about disruptive technologies or businesses, this is what they mean. What disruptive technology is coming your way? Are you ready? What can you do to get ready?
1. Pushing Decision-Making to the Level Closest to the Customer:
I interviewed more than 400 distribution and manufacturing companies to determine what they felt was the single most important issue impacting their business today. After hours of discussion, the consensus seemed to be the need to streamline decision-making by pushing that decision-making to the level closest to the customer. The days of making prospects or customers wait is over. In the internet age, if you don’t give your customers or prospects a stellar experience when they contact your company, they will find a replacement or alternative vendor in six seconds or less! But ask yourself this: “What is the level closest to the customer?” The answer might surprise you. The level closest to the customer is … the customer! Can your prospects and customers contact your company, 24×7, on the device of their choosing, and get an accurate answer to their question, comment, or concern? Because if they can’t, they will find another company to work with. How easy are you to do business with? How much self-service content exists on your website or customer portal? According to Forrester Research, 72% of customers prefer self-service to resolve their support issues over picking up the phone or sending an e-mail. More than 40% of customers contact a call center (or sales representative) AFTER they have looked for support via self-service. If they cannot find it easily on your site, they will go to your competitor—and in a very real sense, you sent them there!
2. Pragmatic Technology is a Must:
There is a lot of talk out there around artificial intelligence (AI), machine learning, robots, and many other terms reminiscent of Star Trek. Does any of this technology have a place in a company like yours? In a word, YES! Absolutely! Certainly! Let’s start with RFID (radio frequency identification). RFID tags and scanners are now commonplace in many industries and its application is well documented. In addition to accuracy, RFID brings control, speed, and efficiency to the picking, packing, and RMA processes. Many manufacturing and distribution companies are now taking RFID to the next step. Voice recognition is now being used in environments where the noise levels allow for it. Putting it in terms that everyone can understand, you can now use “Alexa” to help you pick and pack in areas where your hands are tied up and not available. Companies are also putting scanners on forklifts, so they are scanning in real time as the drivers are moving around the warehouse. I know of several distributors who are now using drones to take inventory in areas where they have extremely large environments (think a nursery with tens of thousands of trees and shrubs over thousands of acres), or using robots to move inventory around or take inventory in situations where the elements make it less desirable for humans. For example, a large outdoor area in Arizona where the temperatures are above 114 degrees in the summer. Companies need to know how many and where their inventory is located. They must be able to give accurate information to their customers or prospects, and this can be done much better with technology that is available today.
3. Picking in Waves:
Does your business solution allow you the ability to plan and pick in waves? Wave picking can not only help you become more effective in managing routing and loading, but it can also help you managing arrival and departure times at busy loading docks. Wave picking is a great example of bringing together software, hardware, and people to create a true competitive advantage for your company. Conversely, organizations with large warehouses and tens of thousands of SKUs or more that do not use wave picking, could find themselves unable to compete in the marketplace. Since wave picking is now generally considered to be a standard business practice, if your current ERP solution cannot help you implement this strategy, it is holding you back.
4. Cycle Counting:
As alluded to above, many companies are now using scanners that are attached to their forklifts and other devices to keep an up-to-the-moment picture of their inventory. Once an automated and perpetual cycle-counting process is successfully implemented, you can effectively eliminate the need to shut down warehouses for periodic counting. Being able to pick, ship, and pack 24×7 is part of the new reality for many in the distribution world. Companies like Amazon have created new expectations of our customers (disrupting the industry). Not being able to ship because you are shut down for a cycle count is unacceptable in this new paradigm.
5. Cross Module Functionality:
I am sure that many people reading this article are in the position of having a business management “solution” that has been cobbled together over the last couple of decades or so. They may have one solution for financials, a different solution for manufacturing, a completely different solution for field service, and let’s not even talk about their totally separate CRM, commerce, and portal applications. Rather than having many different systems managing their organizations, some companies decide to not even go there. They don’t service the equipment they sell—missing out on a profitable revenue stream. They do not effectively manage their customer service center because they can’t get accurate and timely information to the people on the line. Many companies work in what I call a “past tense” reality. Because it can take days or weeks to get final numbers, managers and line-level employees are always working with outdated information. If the company could get real-time updates for all customers, throughout their customer lifecycle, they could dramatically improve their customer loyalty and their overall profitability. The same is true of disjointed customer relationship management systems (CRM), route tracking and management, and many other mission-critical aspects of your business that run separately or loosely integrated today. Frankly, this should be viewed as unacceptable. As Bill Gates said, “Bringing together the right information with the right people will dramatically improve a company’s ability to develop and act on strategic business opportunities” (emphasis added). Today’s business solutions should be totally open, integrated, and free of silos. You can’t empower your people and you can’t push decision-making to the level closest to the customer without a fully integrated business management solution.
Disruption is happening every day—think Amazon. And the continual blending of technology with people and process is sure to bring many additional changes. Companies need to focus on digital transformation. When you think about how you will continue to meet the expectations of the marketplace, drive decision-making to the level closest to the customer and implement next generation concepts and technologies, you need a business solution that focuses not only on technology, but also on community! People are still a mission-critical component of a successful company. You need a powerful community that includes your software provider and your trusted business advisor.