Distribution is a complex and multi-layered process that includes logistics, inventory management, customer interaction, and monitoring of field employees. It often requires large resources and full immersion to avoid errors and failures. This is where automation comes to the rescue, allowing you not only to cope with challenges, but also to significantly reduce costs.
Today, automation is not just a trend, but an important strategic tool for business. It helps not only solve current problems, but also form the basis for long-term growth. Let's look at how it works and what benefits it brings.
Today, automation is not just a trend, but an important strategic tool for business. It helps not only solve current problems, but also form the basis for long-term growth. Let's look at how it works and what benefits it brings.
Why has automation become a necessity?
Modern businesses are faced with a dynamically changing market, where competition is increasing, customers demand more, and the slightest mistakes can cost the company a lot of money. Automation helps businesses adapt to these challenges by providing:
- reduction in time for routine tasks;
- reduction in human errors;
- savings in operating costs;
- improved customer service.
What do companies that have implemented automation get?
1. Time saving
Due to what?
Example:
2. Reduction of errors
Due to what?
Example:
3. Saving operating costs
Due to what?
Example:
4. Improving customer service
Due to what?
Example:
Due to what?
- Automation of routine operations: management systems (CRM, ERP, WMS) take on tasks such as order processing, report generation and data updating.
- Use of robots and chatbots: they process customer requests and perform standard operations, such as data reconciliation.
- Data integration: combining all processes in one system eliminates manual input and duplication.
Example:
- SERENE Pharm reduced order processing time by 24% thanks to automation via the Smartup platform.
2. Reduction of errors
Due to what?
- Standardization of processes: systems work according to specified algorithms, eliminating human errors.
- Data relevance: updating information in real time prevents duplication and incorrect entries.
- Instant control: automatic monitoring identifies deviations from the norm.
Example:
- Rozmetov reduced its out-of-stock (OOS) rate by 30% thanks to the Smartup system, which prevents accounting and ordering errors.
3. Saving operating costs
Due to what?
- Logistics optimization: automated routers minimize delivery costs.
- Reduced personnel costs: manual operations are replaced by systems, which allows for the redistribution of resources.
- Efficient inventory management: systems predict needs, eliminating surpluses and shortages.
Example:
- Green Line Trading reduced transportation costs by 15% by optimizing routes with Smartup.
4. Improving customer service
Due to what?
- Fast request processing: automation speeds up response to customer requests.
- Accuracy of order fulfillment: reducing delivery errors increases customer satisfaction.
- Data transparency: customers see up-to-date information on orders and balances.
Example:
- Sayonar increased sales by 20% in three months thanks to Smartup's automated reports that speed up customer service.
What do the experts say?
Nikolay Doroshchuk, an expert with 35 years of experience in distribution:
"Distribution offers not only high margins in categories A and B, but also control over the process. When working with wholesalers, manufacturers are highly dependent on external factors and have no guarantees of long-term stability. Distribution allows for a deeper analysis of the market, understanding the needs of points of sale and setting up a strategy, as well as implementing automation, simplifying analysis and planning.
When you go to a distributor, it's already in a new way. You analyze each outlet, and the planogram, and prices, and representation, etc. That's why automation is needed there. Therefore, if you sell an IT product, but do not go to wholesalers or to those who work with wholesalers, they will not understand this. But as soon as we are ready to change the strategy, it means that they understand the future of distribution.
Automation is not only about technology, but also about strategy. It helps a business grow, making it manageable and predictable.
"Distribution offers not only high margins in categories A and B, but also control over the process. When working with wholesalers, manufacturers are highly dependent on external factors and have no guarantees of long-term stability. Distribution allows for a deeper analysis of the market, understanding the needs of points of sale and setting up a strategy, as well as implementing automation, simplifying analysis and planning.
When you go to a distributor, it's already in a new way. You analyze each outlet, and the planogram, and prices, and representation, etc. That's why automation is needed there. Therefore, if you sell an IT product, but do not go to wholesalers or to those who work with wholesalers, they will not understand this. But as soon as we are ready to change the strategy, it means that they understand the future of distribution.
Automation is not only about technology, but also about strategy. It helps a business grow, making it manageable and predictable.
Barriers to automation: why companies are struggling
1. High Initial Costs
Problem:
Investments in automation often include purchasing equipment, software licenses, implementing systems, setting up processes, and training staff. For many companies, especially small and medium-sized ones, this can be a serious barrier.
Why it matters:
Companies are afraid that the costs will not pay off or the implementation process will be more difficult than expected. With limited budgets, the decision to automate on a large scale is often postponed.
Solution:
2. Employee Resistance
Problem:
Employees often perceive automation as a threat to their jobs or their usual way of working. Fear of change, lack of skills in working with new systems, and mistrust of technology can cause a negative attitude towards the automation process.
Why it’s important:
Even the most advanced system will not be effective if employees are not ready to use it. Resistance can slow down or even derail the implementation.
Solution:
3. Complexity of integration
Problem:
Many companies use existing systems and tools that are not always easy to integrate with new technologies. Automation can disrupt current business processes, leading to temporary failures and additional costs.
Why it matters:
If a system is poorly integrated, it creates data silos, reduces work efficiency, and can discourage employees from using it.
Solution:
4. Cultural and Organizational Barriers
Problem:
An organizational culture that is focused on traditional ways of working can slow down the automation process. Managers and employees sometimes underestimate the need for change or are unwilling to reconsider their usual approaches.
Why it matters:
Without a change in mindset and a willingness to transform, automation risks remaining underutilized.
Solution:
Problem:
Investments in automation often include purchasing equipment, software licenses, implementing systems, setting up processes, and training staff. For many companies, especially small and medium-sized ones, this can be a serious barrier.
Why it matters:
Companies are afraid that the costs will not pay off or the implementation process will be more difficult than expected. With limited budgets, the decision to automate on a large scale is often postponed.
Solution:
- Payback planning: Create a detailed business plan that takes into account expected savings, increased productivity, and cost reductions. This will help you see the real return on investment.
- Stage implementation: Automate processes gradually, starting with the most routine and expensive ones. This will allow you to distribute the costs over time.
- Grants and subsidies: Explore the possibility of receiving government support or grants for the implementation of innovative technologies.
2. Employee Resistance
Problem:
Employees often perceive automation as a threat to their jobs or their usual way of working. Fear of change, lack of skills in working with new systems, and mistrust of technology can cause a negative attitude towards the automation process.
Why it’s important:
Even the most advanced system will not be effective if employees are not ready to use it. Resistance can slow down or even derail the implementation.
Solution:
- Transparent communication: Explain to employees how automation will make their work easier, eliminate routine work, and allow them to focus on more important tasks.
- Training and support: Provide training and access to educational materials so that employees can master the new systems.
- Involvement: Involve key employees in the implementation process so that they feel part of the change and can share their experience with colleagues.
3. Complexity of integration
Problem:
Many companies use existing systems and tools that are not always easy to integrate with new technologies. Automation can disrupt current business processes, leading to temporary failures and additional costs.
Why it matters:
If a system is poorly integrated, it creates data silos, reduces work efficiency, and can discourage employees from using it.
Solution:
- Audit your current processes: Before implementing automation, assess which processes require changes and choose technologies that are easy to adapt to your business.
- Choosing scalable solutions: Look for platforms that easily integrate with existing tools, such as CRM, ERP, or accounting systems.
- Work with experienced vendors: Hire professionals or partners with experience implementing automation in your industry. This will reduce the risk of errors and delays.
4. Cultural and Organizational Barriers
Problem:
An organizational culture that is focused on traditional ways of working can slow down the automation process. Managers and employees sometimes underestimate the need for change or are unwilling to reconsider their usual approaches.
Why it matters:
Without a change in mindset and a willingness to transform, automation risks remaining underutilized.
Solution:
- Leadership from the top down: The company’s leadership must actively support and promote the automation process by setting an example.
- Focus on success: Showcase successful implementation cases so that employees see real results and benefits.
- Step-by-step approach: Automate processes gradually to give the team time to adapt.
Global experience: what can we learn?
Business process automation has become a key tool for leading global companies looking to improve efficiency and reduce costs. Let's look at a few examples:
1. Coca-Cola: Logistics Optimization
Coca-Cola HBC, one of the largest bottlers of Coca-Cola, implemented automated systems to optimize its supply chain. Using models to test new supply chain configurations, the company was able to:
These measures led to a significant increase in logistics efficiency and a decrease in operating costs.
Source: AnyLogistix
2. Procter & Gamble: Inventory Management
Procter & Gamble uses artificial intelligence for dynamic routing and supply chain optimization. The Supply Chain 3.0 initiative aims to improve supply chain resilience through automation and data analytics, enabling:
These efforts are expected to result in cost savings of $200 million to $300 million.
Source: Consumer Goods
3. Bayer: Process Automation
Bayer is aggressively pursuing digitalization to improve the efficiency of its operations. The implementation of new digital models and tools has enabled the company to:
These achievements were made possible by strategic investments in digitalization and process automation.
Source: BTOES Insights
These examples demonstrate how automation helps companies optimize processes, reduce costs, and increase competitiveness in the global market.
Why do companies decide to automate?
Despite the barriers listed, most companies that have implemented automation note its payback and significant improvement in performance.
Examples:
Automation allows you to not only cope with current challenges, but also prepare your business for future changes.
1. Coca-Cola: Logistics Optimization
Coca-Cola HBC, one of the largest bottlers of Coca-Cola, implemented automated systems to optimize its supply chain. Using models to test new supply chain configurations, the company was able to:
- Reduce the number of secondary warehouses by using cross-docking.
- Decrease the "last mile" delivery time.
- Reduce transportation costs.
These measures led to a significant increase in logistics efficiency and a decrease in operating costs.
Source: AnyLogistix
2. Procter & Gamble: Inventory Management
Procter & Gamble uses artificial intelligence for dynamic routing and supply chain optimization. The Supply Chain 3.0 initiative aims to improve supply chain resilience through automation and data analytics, enabling:
- Optimize truck scheduling, minimizing driver downtime.
- Improve order fill rates.
- Optimize routing and sourcing.
These efforts are expected to result in cost savings of $200 million to $300 million.
Source: Consumer Goods
3. Bayer: Process Automation
Bayer is aggressively pursuing digitalization to improve the efficiency of its operations. The implementation of new digital models and tools has enabled the company to:
- Accelerate the implementation of IT changes by 30% within two months.
- Reduce delinquency in consumer healthcare by 1% and improve pharma by 1.2% since January 2021.
These achievements were made possible by strategic investments in digitalization and process automation.
Source: BTOES Insights
These examples demonstrate how automation helps companies optimize processes, reduce costs, and increase competitiveness in the global market.
Why do companies decide to automate?
Despite the barriers listed, most companies that have implemented automation note its payback and significant improvement in performance.
Examples:
- Sayonar increased sales by 20% in just three months thanks to automated reporting with Smartup.
- Green Line Trading reduced transportation costs by 15% thanks to the implementation of Smartup routingю
Automation allows you to not only cope with current challenges, but also prepare your business for future changes.
The obstacles to automation are real, but they can be overcome with planning, training, and gradual implementation. For companies that are ready to take the plunge, automation is a powerful tool to help reduce costs, increase productivity, and strengthen their competitive position.
Overcoming these obstacles is key to making your business more efficient, modern, and resilient to change.
Overcoming these obstacles is key to making your business more efficient, modern, and resilient to change.
How much can you ultimately save?
Automation of business processes brings significant benefits, confirmed by research and practical experience of companies. According to McKinsey, the implementation of digital logistics tools can lead to an improvement in operational performance by 10-20% in the short term and by 20-40% over two to four years.
Source: McKinsey
These metrics demonstrate how automation contributes to increased efficiency and cost reduction in various aspects of the business.
These metrics demonstrate how automation contributes to increased efficiency and cost reduction in various aspects of the business.
A practical example is Serene Pharma, which, having implemented the Smartup system, reduced order processing time by 25%, which led to significant resource savings and increased productivity.
Source: SmartUp
Thus, automation not only optimizes processes, but also provides significant financial benefits, confirmed by both analytical data and real cases.
Source: McKinsey
These metrics demonstrate how automation contributes to increased efficiency and cost reduction in various aspects of the business.
These metrics demonstrate how automation contributes to increased efficiency and cost reduction in various aspects of the business.
A practical example is Serene Pharma, which, having implemented the Smartup system, reduced order processing time by 25%, which led to significant resource savings and increased productivity.
Source: SmartUp
Thus, automation not only optimizes processes, but also provides significant financial benefits, confirmed by both analytical data and real cases.
Automation is an investment in the future
Automation not only reduces costs, but also opens up new opportunities for growth. It is a tool that changes the approach to business, making it more efficient, transparent and competitive.
Companies that have implemented automation are already talking about its benefits. Now it is your turn to use this tool to make your business stronger.
The decision is yours.
Companies that have implemented automation are already talking about its benefits. Now it is your turn to use this tool to make your business stronger.
The decision is yours.
