Distributors Work Ahead of the Curve
PUSHING FORWARDTom Craig is the vice president of operations at Virginia Air Distributors in Richmond, Va. He and John Cannon, Virginia Air’s director of IT, have been diligently planning and preparing to meet the new challenges of advanced customer-facing interactions. These interactions are not limited to the company’s Website, but they extend further as customers are now seeking to get online, search product, and check availability all within the same application.
To meet this need, Virginia Air has employed Infor’s ERP Storefront. This bolt-on application is part of the company’s Enterprise Resource Planning solutions. It provides a unique, online store that contains product photos and descriptions, detailed information such as warranties or material safety data sheets, and specific links to suppliers and vendors.
It also allows distributors to tailor the program appearance to their corporate branding and industry-specific terminology. Using a login identification system, contractors can access their own specific account for shopping. This allows distributors to create custom catalogs for key contacts. It also provides the customer’s individual pricing, all available 24/7.
Besides being the one-stop information shop online, a new trend slowly developing among customers is the expectation of distributors to provide online design assistance.
“Today’s customer is more computer literate and IT savvy. They are looking to design systems online instead of over the phone with a customer service representative (CSR),” said Craig. “They want to come to one place, get all their info, place orders, and orchestrate their own business that they would have normally taken care of with the CSR.”
Armed with this new information, Virginia Air began working on a new component of its customer-facing technology - the configurator. The configurator design, which has been out for over two months, is a program that walks customers through a step-by-step design process.
At the end of the process, the program delivers a system compliant with all of the manufacturer- and Air-Conditioning, Heating, Refrigeration Institute- (AHRI-) required matches. Once this is accomplished, the information is produced in the form of a supply order.
“We have been demonstrating this technology to customers and so far there seems to be a lot of interest,” noted Craig. “Whether this will translate into those contractors actually using the new method will remain to be seen.”
By tracking the amount of online orders received and comparing them to the amount of haul-in orders, Virginia Air has been measuring the usage of the newly implemented system.
“Although we haven’t seen an overwhelming switch to the online system yet, as people become more aware of and familiar with it, we anticipate the usage numbers to go up,” said Craig.
TIMING IS EVERYTHINGVirginia Air is admittedly ahead of the curve with the new configurator technology it is endeavoring to use. When it comes to new technology, however, timing is everything. “The configurator work was in development and beta testing for six months,” said Craig. “It has only been out for about six weeks now.”
According to Virginia Air, the entire process - from idea to current form - has taken 18 months, and there is still plenty of work to do. “A lot of the challenge is not in the basic tools, but how to customize the out-of-the-box product to give it the Virginia Air feel,” explained Craig. “We didn’t want our system to be a generic product that everyone else had on their site.”
Why is timing so important? According to a Sector Insight report released by the Aberdeen Group in June 2008, distribution industries on a whole are “behind the pack” in supply chain transformation.
As for technology adoption plans among distribution companies, 42 percent of the respondents intend to focus on inventory optimization and supply chain visibility; 38 percent on demand management; 32 percent on sales and operations planning; 25 percent on supply chain network design; and 21 percent on warehouse management.
Looking at the data, as of yet customer-facing technology has not registered significantly with distributors across America. With the new customer-facing technology taking considerable time to develop, if distributors don’t start planning until the trend gains popularity, it is highly possible that they will be behind the curve when the trend takes off.
“We are seeing more of a trending towards customers who are used to technology and going online for information,” said Craig. “In many cases, there is actually almost an expectation now from customers to be able to work with a company online.”
Not only are the logistics of implementing new technology time consuming, but distributors also need to allow time to train their employees. It also takes considerable time to get customers adapted to the new process.
CHALLENGES AND GOALSNow that the system is running and customers are beginning to catch on, the staff at Virginia Air continues to enhance its customer-facing technology. Currently the company is endeavoring to put in place product descriptions that are more user friendly and easy for customers to quickly understand. It is also compiling better photos to accompany the descriptions.
While updating and compiling its backend data, Virginia Air has run into a few hurdles. The largest has been getting consistent data from suppliers and vendors in a consistent format. The inconsistencies in HVACR bar coding have really been a challenge, according to Craig. “A lot of vendors are not able to supply information for consistent bar coded information,” he explained. “As more distributors push for greater efficiencies in their warehouses, however, they are going to demand the information from vendors.”
With the new changes and continued additions, Virginia Air is endeavoring to eliminate the need for its customers to go to any other Website for product and system information. And according to Craig, “We are at the front end of this curve.”
Publication date: 10/20/2008