In today’s fast paced world of technology, ten minutes to perform a task like processing a sales order is an eternity (unless there is some extenuating circumstance to explain why it is taking so long).So when I’m told that “it only takes ten minutes to process an order”, my follow-up question is always, “How many line items on average are on each order”? If the answer is hundreds, and it rarely is, I can then understand why it might take so long. However, most of the time, the answer is 10-30, and often less.
It turns out that the most common reason it takes so long is that the customer service rep (CSR) is not entering the Sales Order directly into software. The CSR is typically writing the order down on paper (or some other make-shift medium). Now we examine a number of other questions, such as “Do different customers have different prices for the same product?” and “How does the CSR know what is available to sell?”
The responses we typically hear lead to one rather obvious question: “Why”?
Let’s do the math. If it takes one CSR ten minutes to process one order and they do not stop for 8 hours, they can process no more than 48 orders in a day, and that’s without lunch or any other breaks. To process 200 orders in a day, you would need a minimum of 5 CSR’s doing nothing but placing orders for 8 hours each. Now straight payroll cost for this would be somewhere in the region of $120,000 to $150,000 per year, and that’s not including any indirect / overhead costs.
With any good Inventory Management or ERP Software system, one should be able to process an order in a fraction of that time. Being very conservative, a 50 line order should take no more than 4 minutes. Once again we do the math, and now we should need (at most) 2½ CSRs to enter our 200 orders per day, and that even allows them lunch and personal breaks. That amounts to a direct cost saving of around $50,000/year (2 CSR’s), and you still have some slack as you have 3 people covering a job requiring 2½ people.
A big benefit of ERP software is efficiency, but that’s not the only benefit. Having specific (correct) prices automatically populate a customer order, or knowing what is in inventory at the exact moment you are processing the order, saves a heap of time compared with manual lookups. How about knowing what that customer purchased the last time?
If you’re processing orders manually, you’re probably spending twice as long as you need to, and throwing hard-earned dollars out the window. You probably have to look up pricing for each customer (or you do not have specific prices because it is too difficult to maintain), and you do not know what is really in your inventory at any given time of the day.
How often do you have to call a customer back to tell them we do not have the product they ordered, or even worse, not ship the product without telling them? How often have you realized that a price on a customer’s invoice is below what they should have paid? If this is you, maybe it’s time to do something about it.