The world of technology is quickly evolving, and navigating the dynamic landscape of the business world presents a constant challenge for leaders. These challenges increase further when confronted with transformative technologies like Artificial Intelligence, Machine Learning, Robotic Process Automation and other technologies. Because there’s a lack of specific context within industry processes, it often complicates the adoption of these cutting-edge tools simply because leadership doesn’t know where to begin.
Artificial Intelligence is a broad term that covers multiple functions and use cases, and typically it is its extensive capabilities that make investing in a solution so challenging. We’ve identified practical business use cases for Artificial Intelligence (AI), as well as its complementary partners, Robotic Process Automation (RPA) and Machine Learning (ML). For Distributors, the potential lies in leveraging the power of AI, Machine Learning, and RPA to revolutionize operations. By pinpointing the pain points embedded in daily workflows, distributors can begin a journey toward operational efficiency and cost savings, all while eliminating archaic paper-based and manual processes.
Just one example of automation at work is within Accounts Payable invoice processing, which uses Smart Optical Character Recognition (OCR) powered by Machine Learning to learn patterns of vendor name locations on a document header when processing invoices. RPA then takes the data from that same invoice and enters it into an ERP or other line of business system just like an employee would, but with no manual data entry.
We’ll delve into the prevalent challenges encountered by distributors, and share the transformative solutions that Automation, powered by AI, RPA, and ML, can bring to the forefront.
Evolving from warehouse automation to back-office automation
By using automated storage and retrieval systems, picking and packing robots, automated sorting systems, and other tools — many distributors have identified and invested in the power of AI-backed automation. Though this technology has transformed their warehouses and processes to get products out faster, the same evolution hasn’t occurred within their back-office operations.
Typically, there’s hesitation to change existing processes, and there’s a closely held belief that change brought on by automation will have a negative impact over a positive one.
Common back-office challenges in Distribution
Manual Processes
Reliance on manual processes for tasks such as order processing, invoicing, and data entry can lead to errors, inefficiencies, and increased processing times.
Data Integration Issues
Difficulty in integrating data from various systems and platforms can result in inconsistencies, delays, and hindered decision-making processes.
Regulatory Compliance
Staying compliant with ever-changing industry regulations, tax codes, and other legal requirements poses a challenge for distributors, requiring constant monitoring and adaptation.
Inaccurate Data
Errors due to manual data entry mistakes in invoicing, reconciliation, and other financial processes can lead to significant discrepancies and impact the overall financial health of the business.
Limited Scalability
Manual back-office processes may not scale efficiently as the business grows, leading to bottlenecks and increased complexity.
Employee Productivity
Manual data entry slows employees down and prohibits them from completing tasks that are more productive.
Technology Obsolescence
Outdated technology infrastructure may limit the adoption of newer, more efficient solutions, hindering the ability to keep up with industry trends and demands.
High Operational Costs
Inefficient processes, manual labor, and errors can contribute to higher operational costs.
Cybersecurity Risks
Protecting sensitive data and ensuring cybersecurity can be challenging when relying on paper and , especially with the increasing sophistication of cyber threats.
Resistance to Change
Employees may resist adopting new technologies or processes, leading to challenges in implementing and sustaining back-office improvements.
Why should automation be a priority for Distributors?
The distribution industry requires adaptability, scalability, and evolution in order for businesses to grow and successfully serve their customers. Because of this, many organizations have already made the decision to invest in automation for their warehousing operations, and now with the ease of implementation and adoption, they can do the same in their day-to-day back office processes.
Making a conscientious effort to classify automation not as just a buzzword but as a catalyst for operational excellence and cost reduction is the first step in making organizational change. By streamlining repetitive tasks through RPA, distributors can not only accelerate processes, but also reduce resource utilization and eliminate errors in financial operations, saving costs across the organization.
Accuracy and compliance are the two most important pieces of a successful finance department. Robotic Process Automation (RPA) eliminates the need for manual data entry previously completed by employees, ensuring precise accuracy and adherence to industry regulations. With routine financial processes automated, data integrity is strengthened, minimizing risks due to human error and reinforcing a commitment to compliance.
As distributors grow, whether that be through adding product lines, locations served, or year over year expansion, RPA also enables organizations to handle these increased transaction volumes without a rise in staffing needs, creating scale almost seamlessly.
By automating routine tasks, finance teams gain the freedom to focus on strategic initiatives and help to grow the business. Automation helps organizations move toward operational efficiency, while reducing costs and eliminating manual data entry and human error. As the business world evolves, embracing automation technology is no longer just a “nice to have” but a necessity in ensuring organizational growth.
What is Artificial Intelligence?
In practical applications within organizations, the most effective AI leverages machine learning to enhance the capabilities of their human employees. Instead of replacing jobs, AI empowers individuals to work more efficiently, aiding them in making informed decisions about how to allocate their time and resources.
AI is not a standalone entity that you can purchase off the shelf and install; rather, it seamlessly integrates into various systems, often operating unnoticed. Despite its prevalence, there exists a significant gap between organizations that harness the power of AI in their business processes and those that have yet to embrace this transformative technology.
The true potential of AI lies not in a future where robots dominate, but in a present where it collaborates seamlessly with human intelligence. By understanding and embracing the symbiotic relationship between humans and AI, organizations can unlock new levels of productivity and innovation. Recognizing AI as a valuable tool that, when used wisely, can elevate our collective capabilities and drive positive change across various industries is the first step towards complete digital transformation.
Opportunities for Automation
Depletion Allowances & Billbacks
Managing Depletion Allowances can be a time-intensive task for distributors. Pine State Trading, a Molson-Coors Distributor and a customer of PiF, aimed to streamline their monthly Depletion Allowances reconciliation through automation. In the past, Pine State dedicated two full-time employees, spending the initial two days of each month manually filling out billbacks for depletion allowances. This handwritten process involved stacks of forms on each desk, followed by an additional 2-3 hours of manual data entry by an Accounts Payable employee. Depletion Allowances, incentives or rebates based on a distributor’s sales volume, were a crucial aspect, and the automation solution successfully transformed this labor-intensive process into a few hours of hands-off work, providing significant time savings and reducing the risk of errors.
Pricing & Promotion Updates
Distributors often grapple with frequent pricing changes and promotions from suppliers. Managing thousands of unique products on a monthly or quarterly basis poses a challenge that takes up multiple days of work entirely taken up by manually entering data from spreadsheets into an ERP. Automation helps to eliminate this data entry-heavy process for employees. While resource savings were beneficial, the primary return on investment lay in the reduction of errors associated with pricing updates.
Non-Inventory Requisitions
Non-Inventory Requisitions involve requests for items or services outside an organization’s standard inventory. Pine State simplified this process by implementing Electronic Forms and Accounts Payable Automation. Employees could electronically submit requisitions, eliminating the need for paper forms and constant inbox monitoring. Automated workflows ensured requisitions reached the appropriate approver, and employees could track requisition status, enhancing transparency in the process.
Inventory Forecasting & Management
Distributors commonly employ Inventory Forecasting systems to predict future orders and sales. Instead of hiring or reallocating staff for manual data entry, distributors can leverage a combination of Artificial Intelligence, Machine Learning, and Robotic Process Automation. RPA seamlessly connects disparate systems and eliminates the need for employee intervention. and ensures efficient synchronization between Purchase Orders and the Inventory Forecasting system.
How can Distributors implement Automation?
Automation helps create long-term success through efficiency, error reduction, and resource allocation. PiF Technologies has experience building customized AI-powered automation solutions for distributors across the country of all sizes. By working with our professional services team, we can help you identify opportunities to optimize your operations through the power of RPA, ML, and AI.
To start, just fill out the form below to connect with us. Our team will quickly answer any questions you have and guide you through the process of bringing AI and RPA into your organization.
