Essent Webinars: 'The Holy Grail' for Business: Automated Order Processing
Automated Order Processing from Essent eliminates supply chain friction so trading partners like distributors and suppliers can have more profitable relationships. It's working right now for real companies in the promotional products industry.
Watch the Automated Order Processing Webinar
Slide 1: The Holy Grail
Hello and welcome to today’s webinar.
Today we’re going to show you a solution that’s being described as The Holy Grail for the promotional products industry.
Essent technologies enable automated order processing that can save millions of dollars for trading partners and billions of dollars for the industry.
Slide 2: Moderator: Douglas B. Brill
My name is Doug Brill. I’m the Essent marketing coordinator and I specialize in the promotional products industry. I’m also your moderator today.
Slide 3: About Essent:
Before we begin, a very brief overview of Essent.
Essent is the leader in providing Comprehensive business management solutions since 1981
Essent has been serving Distributors, Decorators, and Suppliers in the promotional products industry since the year 2000
$3 Billion in Commerce flows through Essent’s solutions each year
Slide 4: If You Have Questions
We expect you may have some questions, but in an effort to keep the webinar concise for everyone we can only answer them off line.
Feel free to use the webinar control panel to submit questions, and we’ll be happy to answer them for you after the webinar has ended.
Slide 5: The Problems of Order Processing
Every year, poorly-formed purchase orders are costing the industry time, money, and customer dissatisfaction.
That’s because it’s time-consuming and costly to fix and process flawed orders.
And it turns out, as we will see, that the entire industry is paying the cost of poorly-formed orders.
Slide 6: What the Industry Needs
The industry needs purchase orders that can be processed simply without a person having to intervene
Without the supplier needing to speak with the distributor and without undue delay.
In short, the industry needs Well-Formed Orders
Slide 7: What's a Well-Formed Order?
Well-Formed Orders are right the first time and stay right through the entire order pipeline.
They include all the required information.
You don’t have to revisit or change them.
And more often than not, a Well-Formed order is automated.
Slide 8: Orders so accurate they can be processed by computers
The industry needs order so accurate that they can be processed by computers.
Slide 9: Widely Sought, Long Elusive, Highly Valuable
So why are people calling automated order processing the Holy Grail? It was described this way at the PPAI Technology Summit in 2014. The name stuck because it fits.
Automated order processing is widely sought.
Until recently, it had proven elusive.
And automated order processing is highly valuable.
Slide 10: "I guess we found the Holy Grail"
One Tech Summit speaker described automated order processing as the Holy Grail. And the next speaker was Ken Phu from Hub Pen Company. Hub Pen uses Essent technology for automated order processing with its trading partner, MARCO Promotional Products.
"I guess we found the Holy Grail,” Ken told the crowd.
Slide 11: "The efficiency hat many sought but few have found"
Ken said automated order processing was described as the Holy Grail …
… Because it achieves the efficiency that many in the promotional products industry have sought but few have found.
"We’ve already found it in Essent technology,” he added.
Slide 12: Presenter: William Austin
Here to bring you a closer look is your presenter, Will Austin. Will is a business analyst for Essent. And he’s also a specialist in the promotional products industry.
He’ll tell you more about technology that creates Well-Formed Orders to potentially save companies millions and the industry billions.
Slide 13: Topic
In Today’s webinar, we will be discussing automated order processing and how to end your search for the Holy Grail.
Slide 14: Poorly-formed orders are costly
Poorly formed purchase orders are costs time and money.
They sap millions of dollars from the promotional products industry every year.
Let’s look at some of the ways orders go wrong. Hopefully these aren’t too familiar for you.
Slide 15: Incomplete
Sometimes poorly formed orders are just incomplete.
It could be the in-hands date.
The imprint location or imprint method.
Or the shipping or billing address.
It could be any piece of information. But something is missing. And now someone needs to fill in the blanks.
Slide 16: Vague
Sometimes the information is just vague.
It could be a typo, like here where the distributor probably wants 275 units.
It could be a lack of specifics. The distributor might want "Yellow” items, for example. Is it Dusty yellow, Canary Yellow, Blazing Yellow? Maybe it’s the new Minion Yellow?
Or maybe the order has almost all the right information, but not quite. Like missing one of the digits in the SKU.
Again, someone’s going to need to spend man-hours to sort this out.
Slide 17: Free Form
Here’s one purchase order we read about in PPB Magazine. It was in the body of an email and all it said was …
… "Send me 36 towels.”
That’s it. No in-hands date, no imprint details, no addresses, no color, no SKU, no art. Just "Send me 36 towels.”
How is that order supposed to get processed with any efficiency? And how is it going to be processed cost-effectively? Someone’s going to need to spend man-hours filling in the gaps.
Slide 18: It Happens Too Often
Unfortunately, these types of poorly formed orders aren’t uncommon.
One promotional products company told the magazine that two-thirds of its orders are poorly formed, which costs everyone time and money.
Slide 19: And It Costs Too Much Money
And poorly-formed orders aren’t cheap, either.
One supplier Vice President told the magazine that it costs $13,000 per day for staff to process flawed orders.
Slide 20: Flawed Orders
Now let’s take that $13,000 per day spent on flawed orders.
With a typical 5-day work week, there are 261 business days in a year.
Do the math, and that cost to process poorly-formed orders is $3.4 million per year. Just for one supplier to deal with poorly-formed orders.
Slide 21: Cost
What if 100 suppliers have this cost?
What if 1,000 suppliers have this cost?
PPAI has roughly 16 hundred supplier members.
If they each spent $3.4 million per year on processing flawed orders, that’s a $5.4 billion shock to the supply chain.
Slide 22: Supply Chain Friction
This can all be described as supply chain friction. And Supply Chain Friction means errors…
And errors result in money and time lost.
Slide 23: It's not just a supplier problem, it's a supply chain problem
Some people will be quick to say it’s a supplier problem to cover the processing costs. But the problem extends much further than that.
Supply chain friction hurts the entire industry, including decorators, buyers, end users and distributors.
Slide 24: Supply Chain Friction (continued)
The supply chain friction are part of the supplier’s overhead. And it doesn’t just go away.
It naturally gets baked into unit prices. So your hat or pen or T-shirt is more expensive now. Your products carry the cost of flawed order processing.
It gets passed onto the distributor. The distributor buys not just the product, but its overhead. And as the product moves through the supply chain, the cost of order processing sticks with it.
Slide 25: How Friction Affects Your End Buyer
Now the distributor is going to the end buyer with these extra costs built in.
At this point, the distributor has two options, and neither is great. The first option. The distributor can simply pass along the cost to the end buyer.
But the end buyer isn’t going to like throwing money away. Especially if your competitor has similar products at a better price.
It’s going to lead to customer dissatisfaction and possibly lost business.
Slide 26: Margins
The other choice isn’t too appealing either. The distributor can simply absorb the supply chain friction.
In other words, the cost of poorly-formed orders was passed along to the distributor in the unit price. So now the distributor can take a lesser margin to keep the end buyer happy.
Slide 27: End Buyers and Margins
So what are you left with?
Either an end buyer unhappily throwing away money.
Or a distributor with diminished margins.
There’s no good outcome.
Slide 28: Let's Remember
And let’s remember.
It’s not happening because the supplier manufactured a poor product.
It’s not happening because the distributor organized a poor campaign.
It’s not happening because any party failed to fulfill its core competencies.
It’s just orders. All of these extra costs in the supply chain started with flawed orders.
The purchase order from the distributor to the supplier is incomplete, vague, free form, or otherwise poorly formed.
The supplier is spending man-hours every day to process flawed orders, at a significant cost.
That’s baked into unit prices.
And it’s passed onto distributors who have to deal with customer dissatisfaction or diminishing margins.
Slide 29: Automated Order Entry
So what is automated order processing? It takes your standardized processes and business rules to next level. Imagine taking all of the order detail such as Product Information, Artwork, Shipping Information, and any additional Charges, and then automatically processing a well formed order that includes all your standard order processes and business rules being applied.
Orders that are so well-formed that they can be processed by computers
No man-hours are spent identifying errors, revisiting, and then correcting orders
Slide 30: The Mechanics of Integrating Partners
Essent has developed a way to create, deliver, and process well-formed orders. And trading partners are seeing the real results every day.
The solution uses the OrderTrax Network, the OrderTrax Connector, and the Essent Product Configuration Engine to enable trading partners, namely suppliers and distributors, to automatically process purchase orders.
Slide 31: What is OrderTrax?
So what is OrderTrax?
The OrderTrax Network is the industry-standard trading network.
It uses EDI standards, or Electronic Data Interchange, standards – allowing trading partners to exchange electronic business documents.
The OrderTrax Connector automates the exchange of these electronic documents.
It uses the trading partners’ native business management system and preferred document format.
So business rules and processes are enforced.
And both sides get time- and money-saving Well-Formed Orders. Automatically.
Slide 32: How it Works: The Mechanics of Integrating Partners
So how the OrderTrax and Automated Order Processing work?
Slide 33: Allowable Product Configurations
First, the supplier defines products with their allowable configurations.
Slide 34: Create Product Configuration Surveys
Either trading partner creates product definitions with simple-to-understand Product Configuration Surveys that anyone, including end-users, can answer to define the custom product specifications. Only correct options may be selected, assuring well-formed orders.
Slide 35: Create Well-Formed Purchase Orders
The Essent Product Configurator creates well-formed POs based on the product configuration and the answers provided by the buyer.
Slide 36: Supplier and Distributor Connection
The OrderTrax Connector connects Supplier and Distributor ERP/Business Management Systems to the OrderTrax Network, filling in the missing pieces of documents.
Slide 37: Supplier and Distributor Connection
If we take that same supplier and distributor connection from previous slide, we can take to the next level.
Imagine a solution where customers can place order with an integrated web ecommerce solution that allows them to submit the order directly to the distributor.
That’s an end to end solution.
The end user hits enter on the website and the order gets passed through the distributor to the supplier in a matter of seconds. Ready for the production floor.
Slide 38: The Purchase Order is Securely Routed
Then the OrderTrax Network securely routes the electronic PO from the distributor to the supplier.
Slide 39: Document Conversion
During the process, OrderTrax automatically converts the electronic document to a format compatible with the trading partner’s business management system.
Slide 40: Supplier Receives Well-Formed Order
And in the case of a Purchase Order, the supplier’s ERP system receives the document in the proper format with all of the product configuration information necessary to automatically and seamlessly process the order.
Slide 41: Supplier perspective: "Much more likely to get more business"
So what does that all mean from the supplier perspective?
Eliminating costs through automated order processing makes it easier for suppliers to get more business.
Slide 42: Supplier Perspective
Hub Pen President Joseph Fleming, who uses automated order processing with MARCO, cited these benefits:
Orders reach the production floor in about half the time.
Orders bypass the order entry department and most of the proofing department.
Orders are more accurate because there is no opportunity to introduce errors with data re-entry or re-keying.
More than 99 percent of orders from MARCO to Hub Pen are ‘seamless,’ meaning very little manual processing.
Hub Pen can reduce prices to get more business.
Slide 43: "Much more likely to get more business in the future"
Automated order processing is "a pretty easy sell – faster, more accurate, cheaper,” Mr. Fleming said.
If the supplier can make the relationship more profitable for the distributor, he said, "the supplier is much more likely to get more business in the future.”
Slide 44: Distributor perspective: "One of the most seamless relationships"
Distributor also enjoy many benefits from automated order processing.
Slide 45: Distributor Perspective
Since suppliers have reduced overhead, products are immediately more cost-effective.
So distributors may receive reduced pricing from the supplier.
That can be used for better margins.
Or the savings can be passed on to end-buyers for increased customer satisfaction.
Orders are also more efficient. They’re fulfilled faster for quicker turnarounds. And more rush orders are possible.
Distributors don’t need to revisit the order. So time and resources can be spent on more productive activities, like sales.
Slide 46: "Our Relationship with Hub Pen is surely one of the most seamless in the entire industry"
Automated order processing makes supply chain friction between Hub Pen and MARCO virtually non-existent. That decreases expenses, saves time, and improves communications and efficiency.
MARCO Chief Financial Officer Kimberly Scoville said MARCO’s "relationship with Hub Pen is surely one of the most seamless in the entire industry,”
Slide 47: Available to Everyone
The solution is available to everyone.
Automated order processing holds potential for trading partners throughout the industry.
Future phases of automated order processing are to pair together more promotional products trading partners.
Essent designed the solution to be easily adaptable to fit the size and needs of most companies.
Automated order processing from Essent is ready to eliminate supply chain friction throughout the entire industry.
And with that, I’ll turn it back over to Doug who will tell you how to learn more.
Slide 48: OrderTrax Integration
Thank you very much, Will. While automated order processing is being called the Holy Grail for the promotional products industry, it’s also worthwhile to point out other ways that trading partners can integrate via the Essent OrderTrax Network
Some of the most fundamental information that a distributor wants to provide to end buyers is pricing and availability. But the traditional method of providing this information is manual. It happens by phone and email. Distributors, decorators and suppliers however can leverage OrderTrax to integrate electronic product catalogs and inventory. This way price and availability information is communicated automatically and in real-time. No phone calls, no emails, just instant access to the information buyers want to know before they buy.
There is also information that needs to be communicated after the sale. The buyer wants to know the status of the order – is it in production, when can we expect it, has it shipped. The traditional ways of communicating these statuses is manually by phone and email which is time- and labor-intensive. Through OrderTrax integration, again this information can be automatically communicated in real-time.
And later in the sales pipeline of course, it’s time for invoicing. Another process that is traditionally accomplished by time intensive manual processes. And once again in this case, OrderTrax integration can automatically communicate this information hassle-free.
Slide 49: Find Your Holy Grail
And of course Essent is dedicated to helping the promotional products industry create Well-Formed Orders that can be processed by computers, saving time and money for everyone. Essent provides the Holy Grail of Automated Order Processing.
We’ll be happy to answer questions specific to your company regarding OrderTrax, automated Order Processing, and integration of any kind.
All you need to do is visit essent.com/HolyGrail where you can set up a free consultation.
While you’re there, you can also read a case study that shows how Automated Order Processing is working for real companies right now.
Again, visit essent.com/HolyGrail to schedule a free session or to check out the case study.
Thanks again to everyone for attending today’s webinar. Find your Holy Grail.