Distributors: How to Be Like Amazon (3 Steps)
At this point, business customers, like consumers, expect the Amazon experience: They want what they want ASAP. And they want the buying process to be frictionless.
As a distributor, how do you offer that easy, seamless experience to your customers?
1. Ask the big, strategic questions.
One of the keys to Amazon’s success is that it goes against conventional wisdom and breaks the old, accepted rules. Do not assume that your organization does the right things the right way. Reconsider everything you think you “know.” Imagine that you are just starting out. Ask yourself these essential questions:
• What is your market?
• Who are your customers today?
• Who will your customers be tomorrow?
• What is your product/service offering?
• Are there any holes in your customer base or your offering?
• Is your offering priced properly?
• Are you selling your offering in the right marketspace and via the right channels?
• Are you doing everything you can to market to today’s customers – and tomorrow’s?
2. Understand your core business processes.
Amazon can offer virtually instant gratification because the operational processes underneath the buying process make it possible. Evaluate the efficiency and capabilities of your major business processes:
Procure-to-pay (sourcing, planning, buying, receiving, payment). Ask these 12 questions to evaluate the maturity of your P2P – and to know where you can make changes that will maximize efficiency.
Order-to-cash (quoting, customer orders, ecommerce, pick/pack/ship, AR). Ask these 11 questions to determine where you can focus your optimization efforts.
Warehouse management and logistics (cycle counting, stock rotation, staff planning, space planning, carrier planning). Read this article to learn about warehouse management best practices.
Record-to-report (general ledger, balance sheet, income statements)
3. Determine the path to your future state.
Ultimately, you may need to rethink and remake many of your business processes in order to provide an Amazon-like experience for your customers. Transformation requires defining your current state and creating a vision of the future state. To get from your current state to a better and more efficient (and potentially more profitable) future state, follow this process:
Build a team: A successful business process transformation project requires a team of business process owners. This team determines the project scope, objectives and measurements of the project. Create a steering team and a project team, and designate process owners.
Evaluate your current processes: Analyzing your current-state processes begins with detailed key performance metrics and their value. Examples include productivity (order processing time, for example), quality, overtime and inventory levels. The analysis continues with business process mapping, particularly for quote-to-order, order-to-cash and procure-topay. By documenting your business processes, and by creating visual maps, your team can easily identify waste and redundancies.
Know what’s possible: Before your team can define a future state, it needs to understand the capabilities a modern enterprise software solution offers, determine current industry best practices, and then map these best practices to enabling technology solutions to construct your future state.
Develop your future-state vision: Your team will naturally evolve into sub-teams based on cross-function value streams (such as order-to-cash), and each value stream team should facilitate workshops to develop your future state. The gap between the current state and the future state is where business process redesign begins – and where you identify ways (in addition to the opportunities already discovered) to eliminate waste, optimize processes and improve productivity.
Make the business case for change: The business case is the justification for your project and the rationale for redesigning current business processes. It is a compilation of business value statements that are the goals your company is striving to achieve. The business case for change is important because it is used at every major milestone to confirm that decisions and actions are aligned with attaining project expectations.
Create a plan and roadmap: With all this information in hand, your team can create the first draft of your project charter. Your team then develops a roadmap that will guide you to your future state and define the deployment strategy. At that point, the project enters the implementation phase.
To learn more about business process improvement (BPI), how it creates the foundation for an exceptional customer experience, how it drives successful business transformation, and how Ultra can help your organization manage the complex process, contact us.
6 Software Selection & Implementation Pain Points + Solutions
Software selection and implementation processes often present challenges of their own. To steer you around trouble and help you drive success, Ultra’s experts compiled a list of pain points and solutions to be aware of as you embark on this journey.
David has more than 25 years of experience helping mid-size and large manufacturing organizations and wholesale distribution companies leverage modern ERP technologies, optimize their operations and accelerate their business processes.