Process improvement is a hot topic for any wholesale distribution business. In our fast-paced and highly
competitive economy, the pressure is on to serve your customers faster and more efficiently. This puts the spotlight on business process improvement and your ability to manage your inventory, sales, accounting, customers relationships and staff with greater ease.

Why process improvement is key to business growth

If your business processes are disjointed, time consuming, manual or constantly breaking down, it’s time to rethink your approach. What if you could increase efficiency and productivity, while spending less time fixing process and operational issues? How about also being able to deliver a more consistent level of service that improves customer satisfaction and ultimately boosts your revenue?

According to an Aberdeen Group Business Process Management Survey, 45 percent of organizations need to update their business processes.

By removing, merging, simplifying or automating tasks, you can significantly reduce the time required for end-to-end business processes – and reduce costs. This is especially important for wholesale distribution businesses that have complex inventory, sales and distribution processes, often with involvement from many different employees.

So where do you start? Here’s a five-step system to improved business processes to set your business up for sustained growth:

1. Identify the problem with your existing business processes

Talk to your people and get an understanding of what’s taking the longest time or using the most resources. Look at your overall pain points. Consider the following:

• Have you documented the process to give you a clear picture?
• Where is the process broken or inefficient? Could those roadblocks be either removed or simplified?
• Which steps take the most time to complete?
• Are there delays in between the different steps, for example if one task replies on another prior task to be completed first?
• Are any processes duplicated or are individual employees completing similar tasks?

Once you have clear picture of your current state, start to priorities your desired outcomes in terms of:

• Effectiveness: Does the process meet operational needs and customer needs?
• Efficiency: Set goals for the cost and resource reductions you’d like to see. What kind of speed or increased output would be ideal?
• Adaptability: Is the process going to be flexible enough to change as the business grows or contracts?

2. Analyze and understand how your business processes relate to each other

While some processes will stand alone, they may still be part of a bigger function.

A great way to approach this is to draw a process map and visually document how each process works and interacts with each other.

Speak to the people who use, or are affected by, the process to get an understanding of issues. Find out:

• What is wrong with the process?
• How could it be improved?
• Can it be automated with technology?
• Will we save time and/or money?
• Is the process valuable or redundant? Could it be merged with another?
• If you’re experiencing the same breakdowns across multiple processes?

3. Redesign your processes using a cloud software solution

The next step is to redesign business processes to eliminate the problems you’ve identified. Experience shows that for most small businesses, business process improvements can be achieved through technology and automation. When you adopt an all-in-one solution such as a cloud-based ERP system, you can bring together accounting, inventory and order management, CRM, sales, marketing and eCommerce.

Think of how beneficial it would be to replace those manual processes and spreadsheets with automations and real-time reporting.

But beware: it’s important that you use technology to redesign and improve on old processes, rather than fitting technology to the problem. This could mean changing the processes altogether. Put simply, this is the time to challenge everything!

Consider:

• How can technology be used to improve what you are doing?
• Can it be used do things you’re not already doing?
• Is it flexible or comprehensive enough to solve problems we aren’t even aware of?

Take time to see things through your customers’ eyes. Think about how the business process improvements will benefit or add value to your customers. In essence, the greater the value or impact on your customers, the greater the importance of the process to your business.

4. Implement your improved processes

The key to a successful implementation is a structured approach that includes planning, documenting, training and communicating the new processes to your team.

Be sure to allocate adequate time, particularly if you are rolling out a small business software solution. Factor in time for dealing with teething problems, and consider running a pilot first, to catch any potential issues and make amendments prior to go-live.

Keep in mind that most people are resistant to change, especially if it involves processes they’ve been using for some time.

5. Monitor and measure success

Once the process improvements have been rolled out, it’s time to measure success. Be sure to allocate metrics that can be easily measured. Your aim is to find out if planned targets have been achieved and expected benefits delivered. Then, be sure to share the results, discuss them with your team and most importantly, adapt the processes accordingly. It’s also useful to provide an on-going mechanism for change requests to be raised, analyzed, reviewed and implemented as needed.

Remember, improving processes and cost efficiency is a continuous activity. Once a process improvement cycle is completed, it’s time to start again and think about what else could be improved.

Lastly, it’s important to celebrate the successes you’ve achieved with your process improvements, however small, and praise the people involved.(Want to focus on your warehouse processes? Have a read of our recent blog post How to Improve Warehouse Efficiency and Reduce Costs).

Is it time for a change?

If you think your current business processes could be holding you back, why not get in touch to start a conversation about how a cloud ERP system can help improve your processes, increase business efficiency and reduce your costs.