Last updated: Automated order processing puts distributors closer to customers

Automated order processing puts distributors closer to customers


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Distributors operate in an extremely low, single-digit margin world where every dollar, and minute, can make or break their profitability. One common area of operational breakdown and margin erosion takes place in the ordering process, when a customer places an order.

In any given enterprise, a large number of purchase orders are received as emailed documents and must be manually entered into the ERP or commerce system, typically by a customer service representative (CSR).

This tedious task wastes time, creates errors, and distracts CSRs from value-added, customer-focused work, and in the end is a financial burden to distributors.

Automation helps distributors streamline the sales ordering process and improve customer experience, but many are reluctant to adopt it. Here’s why they should put aside their fears and make the plunge.

Why automated order processing is critical

In the past two years, the number and enormity of market forces affecting the wholesale distribution industry has been overwhelming for many distributors to handle. They must change in order to remain competitive.

Here are four big trends impacting distributors today:

  1. Amazon alone has been a significant disruptor as B2B buyers want to enjoy the same ease-of-use purchasing experience they get in the consumer world
  2. The pandemic severely impacted the supply chain, where distributors found themselves either having too much inventory or not enough
  3. Marketplaces are playing a much larger role, forcing traditional product-centric distributors to up their game
  4. Increased competition is driving the need for more and more automation
“Disrupt or be disrupted” is a phase often spoken in boardrooms today. As intelligent technologies become more mainstream, distributor business models are at a tipping point and companies must figure out how to adapt, or risk being left behind.

In a world of high competition and low margins, wholesale distributors must address market changes with customer-specific solutions that transform and differentiate, further securing their place in the supply chain and positioning themselves for the future.

“Distributors need to look at new technologies to cut their operating costs and select a partner to improve order capture, RFQ and rebate management process to obtain efficiency and bring back operational margin.” says Magnus Meier, Vice President and Global Head, Wholesale Distribution Business Unit at SAP.

What’s holding distributors back from automating their order process? 

It’s complicated. On the one hand, buyers don’t want to change their processes – they like to buy in certain ways, and for many of them, that means sending in their purchase orders, RFQ’s and rebates in various formats such as emails, PDFs, Excel and Word documents.

For a customer service rep, entering orders into the distribution system can be an incredibly time-intensive activity. On the other hand, many distributors believe implementing an automated order processing system will damage their customer relationships and cost too much.

However, the technology has gotten so good that automating the sales order process is 99-100% accurate with minimal to zero need for human interaction.

“It’s not a technology issue anymore; it really comes down to business process. Distributors need to recognize there is some amount of revenue coming in, and how to automate it while still meeting the customer where they are without asking them to change their business processes,” said Erik Severinghaus, Executive Vice President Strategy & Business Development at Conexiom.

By not implementing sales process automation, customers may get frustrated and look for alternative options in the form of competitors that have already automated their sales processes.

Automation benefits for distributors

Distributors that have implemented an automated order processing solution have seen a significant impact on their business.

For instance, instead of having customer service reps enter orders into their system, they can be redirected to value-added activities and revenue-driving results. Not mired down in manual work, reps have time to truly focus on the customer.

Orders are more accurate and reporting on financials is accurate too, which is key for a CFO. In addition, employees are more satisfied, customers enjoy quicker processing of their orders, and the distributor is easier to do business with. All that drives up employee and customer loyalty.

Meier and Severinghaus have a lot of advice for distributors. In this podcast, they discuss the challenges facing distributors today and provide practical guidance to help you regain margin through automated sales order processing.

In this episode, you’ll learn:

  • How to increase margin through order processing automation
  • How to gain margin through sales order efficiencies
  • How to increase customer satisfaction and loyalty

95% fewer booking errors.
Predict changes in buyer demand.
Better B2B customer engagement.
Breaking the boundaries of wholesale distribution
starts HERE.

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