AWMA UPDATE
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Technology in Reach

Implementing the newest technology to streamline distribution operations is less costly and easier to accomplish than ever before

by Lisa White

In the past, new technologies were out of reach for many distributors. High prices, expensive program overhauls and complicated implementation and operation were just some of the challenges in keeping up with the latest innovations.

Times have changed. These days, technology companies have made it easier than ever for small- and medium-size wholesale distributors to take advantage of the latest systems to help run their businesses more efficiently, accurately and cost effectively.

Web-based applications, voice technology, wide area communications and Service Oriented Architecture (SOA) are becoming more widely used, transforming the wholesale distribution business.

“I see our customers plugging into all segments of their business, including vendor management, warehousing, sales and customer service, to promote efficiency, reduce cost and improve service,” says Jebb Maginnis, president of CDR, based in Covington, LA. “With thin margins and competitive pressures, this is crucial [to staying competitive].”

Hands-free picking
In the past, picking orders was a time-consuming task in which errors were not uncommon. Today’s technology is designed to simplify the picking process.

Introduced this year, Hammonton, NJ-based ProCat Management Services’ Pick Right wireless picking system offers accurate, hands-free picking with real-time data, says company president David Copestick.

The system features a Windows-based touch screen computer that is worn on the wrist and a ring scanner that attaches to the finger. Pickers scan bar codes to identify the ticket they are working on and the system then tells them where to find the item in the warehouse and how many products to pick. Pickers then use Pick Right to scan the UPC code, which ensures the product is correct. Labels are then printed off of the wrist device, providing the box or tote with a unique identifier that includes the route, stop, customer number and other necessary delivery information.

Copestick says this program identifies shortages, overages and mispicks. “One of the nice features that spun out of this system is distributors know where every item, box or tote is. Pick Right offers a host of management reports that provide information on what items are out of stock or unable to ship. This helps fill rates and other issues,” he says. Employees also can be trained to use the program in about 10 minutes.

Web-based applications
An increasing number of distributors are finding benefit with web-based applications such as order entry systems. Because customers enter their own orders online, this saves distributors the time and labor of taking phone orders or wading through paper orders.

Mulvany Attard Associates, based in Ontario, Canada, offers a web-based order entry system where retail customers enter their orders over distributors’ websites. “It is the same application as ordering from a store’s shopping cart over the Internet,” says Michael Benedick, director of client services. This program allows c-stores to order any time, without having to call an inside sales person or rep.

Victor Attard, Mulvany Attard’s president and CEO, says web-based order entry systems can also be used by sales reps on the road via a laptop computer. “Sales reps can enter orders on a laptop and connect to the head office to upload orders throughout the day, rather than having to hand-write orders and deliver them in bulk to office personnel,” he says.

Not only are these web-based systems designed to improve order accuracy, but they also help save labor and enhance customer service.

Stamford, CT-based Success Systems has developed a web-based application that is independent of back office systems. According to Scott Turlow, general manager, the program allows retailers to capture all of the products, pricing and delivery information from the wholesalers’ existing technologies. “It is seamless from the wholesalers’ standpoint and allows retailers to maintain their price book efficiently, without being tied to their store,” he says.

The technology captures wholesaler information from any web browser, automatically updating point-of-sale registers and generating order files for wholesalers. This system also automatically generates new and current shelf labels from wholesaler information for c-store use.

“We see a huge disconnect in technology and many inefficiencies between wholesalers and retailers,” Turlow says. “Wholesalers work on skinny margins, so any cost they can drive out of the channel is shear profit. And c-stores are under time constraints, so any way stores can improve efficiencies will be beneficial to their business.”

Service Oriented Architecture
Many distributors who have made substantial technology investments are seeking economical and simple ways to implement the latest applications without overhauling their program.

This is where Service Oriented Architecture, or SOA, comes in. “SOA is a communication pipeline or gateway between applications and internal functions within an application,” says Ken Yontz, executive vice president of sales and marketing at AFS Technologies, based in Phoenix, AZ. “It is a connectivity tool that allows programs in various applications to speak to each other.”

As technology evolves, distributors have a lot of information and data, but it is not all connected. “As a result, companies can’t always find necessary information in a short amount of time. SOA finds ways to link users together and makes sure distributors have access to that information,” Yontz says.

Part of the challenge is dealing with the Legacy systems that are still in place. Companies are outgrowing this technology, which can meet some needs, but not others. “We’ve been trying to find ways to tap into those older systems and add components to the business model. This allows us to address specific needs without totally replacing a system distributors have already invested in,” Yontz explains.

In addition to Enterprise Resource Planning (ERP) systems that offer data integration, AFS provides an advanced financial package that can be used with distributors’ existing systems. “These components can be layered in on top of their other systems without replacing [pricey components],” Yontz says.

Voice technology
Although radio frequency or RF technology has been in use a long time and with great success in the distribution industry, many say that voice technology will change the business.

“Voice technology creates a different environment in the warehouse,” says Sam Flannery, vice president of BFC Associates, headquartered in West Chicago, IL. “When you go into a voice warehouse, you notice the difference right away. The only sounds are of forklifts and the occasional horn.”

When employees sign on to a voice system, they put in their code and all tasks are inside the system. Employees are given commands through a headset. Voice technology operates in real time, with no data entry required.

Training on this technology is quick, averaging five to six days. “Companies can provide new employees with specific voice commands designed for beginners that leads them through everything they need to do step by step. Then, as they become more experienced, the supervisor can remove voice commands as needed. This way, everyone can train at their own speed. Our system has nine speed variations,” Flannery says.

With voice technology, any text file can be turned into a voice command to help eliminate errors and increase productivity.

Mobile solutions
Remote communication using cellular technology allows sales reps to communicate orders and send info from a hand-held device directly to a distributor’s host computer. This helps automate the sales force and increase efficiency.

According to Raymond Walsh, vice president of sales and marketing for Chicago, IL-based Access International, hand-held devices run operating systems that communicate orders over wide area cell phone networks. “If I have a cell phone with this coverage, I can send orders,” Walsh says. Although this technology has been in use for the last four years, it has become faster and more affordable.

Internet Protocol or IP is another technology that offers the same benefits as wide area cell phone networks. “Even if a sales rep doesn’t have a wide area network connection, with IP they can transmit orders from any hot spot (a location with wireless Internet access),” Walsh explains.

Distributors are currently facing the challenge of providing superior customer service while simultaneously controlling costs.

Retalix SCM, located in Ann Arbor, MI, has developed a mobile solution that helps streamline distributor operations. Power Mobile snaps onto hand-held devices to act as a sales rep mobile solution and delivery device. “If a sales rep does route accounting or deliveries, they can do both, including scanning, using this one device,” says Jeff Nixon, product manager.

EDI alternative
Electronic Data Interchange, or EDI, which is the transfer of data from one computer system to another, has been around for many years. Larger distributors use EDI for electronic invoicing or business-to-business electronic transactions.

However, this technology is costly to implement, and many distributors and retailers do not want to make the investment or deal with the maintenance costs.

Newer technology has emerged that is more economically priced and easier to execute. Most companies will have adopted electronic payment and presentment (EIPP) by 2010, according to Forrester Research.

Aliso Viejo, CA-based Transcepta offers a solution to ease the adoption of EIPP and eInvoicing (electronic invoicing) programs that does not require in-house IT resources or upfront capital to implement.

According to Shan Haq, Transcepta’s vice president of product management, the program is a mechanism for distributors to exchange invoices and payment with c-store customers. “This program removes the barriers to adoption for electronic invoicing on the vendor side, while adding value to the vendor,” he says.

First, distributors agree on an invoice format, such as EDI, XML, etc. to consume invoices electronically. Transcepta reaches out to retail customers to explain the process. The solution is installed on distributor systems in about an hour. “We have them install a print driver remotely off of the web, so there are no IT requirements,” Haq says. Invoices are transmitted to Transcepta electronically, where they are formatted. Distributors then can electronically transmit invoices to buyers from their system.

Distributors also can print invoices through Transcepta’s system. “We can print a batch of however many invoices that they want and we will break them up and deliver them to customers via fax, mail, e-mail or any other method requested,” Haq says. “We can also facilitate electronic payments, providing both parties with all of the necessary data and receipts.”

The program helps distributors simplify the reconciliation process and correlate invoice data.

Stamping innovations
As the tobacco industry contends with increasing taxes and regulations, many distributors are looking at streamlining the stamping process.

Unitech Material Handling Systems in Manasquan, NJ, assists companies in converting stamping operations from traditional pre-stamp methods to post-stamping systems. According to Mark Neuwirth, president, “We specialize in incorporating the system into the company’s present operation by working with what they have, but reconfiguring it to post stamp.” This can involve a wide range of technologies, depending on the operation.

California has been using encoded cigarette stamps to combat counterfeit and illegal cigarette sales. Now, other states are considering utilizing this technology.

“Our technology allows stamps to be applied and encoded at the stamp machine,” says Lisa Presutti, sales and marketing manager at United Silicone/Meyercord, based in Manasquan, NJ. Stamp information is then relayed via computer and satellite in real time, where the tracing information is validated.

Presutti says California is expecting a several million dollar revenue increase from this technology. “It eliminates the black market and evens the playing ground,” Presutti says.

It is worthwhile to regularly evaluate the latest technology to see what benefits it can offer. In many cases, the upgrade can save money by reducing labor and enhancing the operation’s efficiency.

Lisa White is a food industry writer based in Cary, IL.

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