When you’re anxiously awaiting the arrival of a special package at your door, you repeatedly check UPS.com, or FedEx.com, to find out the status of your package. You rush to the door when you see the truck pull up; and, without hesitation, you furiously scribble your name on the screen with a little plastic pen attached to the driver’s fancy handheld device.
Real-time tracking and electronic signature capture are standard fare for finished goods shipping these days; and, have been for a while. Yet, it’s the farthest thing from “standard” in wholesale distribution. Hard goods distributors are notoriously “behind the times” with technology; and, proof of delivery is no exception.
Epicor Eclipse recently introduced its electronic proof of delivery (POD) companion product. All-Tex Pipe & Supply, a Texas-based PVF distributor, had been on Eclipse’s outdated POD predecessor, and was on the lookout for this new technology. Drew Bell, Manager of Information Systems, said, “We knew POD was in the pipeline and we were looking to support it, provided the price was right.”
Another Zerion customer, Electric Supply of Tampa, is planning to install the software as well. Harry Irwin, the CFO, said, “It’s on hold right now because of other priorities; but, we’re very interested in going on it. “
With this new technology buzzing about in the Eclipse community, other users should be rushing the field to celebrate their newfound ability to join the 21st century. Or, maybe they shouldn’t? Let’s take a look at some of the pros and cons to implementing this tool.
First, the pros:
- Keeping up with the times. As we were just discussing, arming your drivers with new smartphones and proof of delivery capability will instantly make your company appear more professional and modern. Drew concurred, “If you want to position yourself as a technically savvy distributor, you should take a hard look at the product.” He added, “What’s really slick about it is they take the signature [in the field]; and, within a minute, it’s already attached to the order in Eclipse.”
- Improved customer service. Customer signatures, driver comments and route data put into the hands of your branch personnel in real-time can be an invaluable service asset. Drew said, “You can tell the customer immediately whether or not the product was delivered and who signed for it.” Harry added, “We’re very customer service oriented and we try to please our customers at all times. With this information, we can let the customer know right away if there’s a problem.”
- Enhanced efficiency. Aside from gained customer service efficiencies, POD also can help you improve operational efficiency. Similar to the benefits of signature capture at your counter, you can automate the print status of orders and create other enhanced processes at your location/s. Drew said, “As a distributor, we’ve spent too much time communicating within the company to find out where the order is. POD helps us automate it as much as possible.” In addition, the GPS, delivery instructions, clock-in/clock-out feature for driver stops, and added features that come with having a smartphone, can speed up your drivers.
- Profitability. POD potentially can make you more profitable in three ways: route streamlining, loss prevention and billing. Harry said, “If there’s something wrong with the order or if the material is damaged, the driver can take a picture of it. We’re also hoping we can bill our customers quicker. We usually bill next day; but, we think we can bill even faster.” Drew said, “You can match a signature time up with the time on the GPS file coordinates so that you have a picture of the truck going into their yard at a specific time. This has the potential to save losses that might have been written off in the past.”
- Cost. Taking on any kind of new technology can be costly. For POD, there are many layers of possible expenses: software licensing/subscription; smartphone for each driver; an upgraded cell phone plan for data; an app for each phone; Eclipse setup fees; maintenance fees and IT time; replacement costs for lost, damaged or outdated phones; and custom reporting. As you can see, the costs can add up quickly. Drew from All-Tex felt comfortable with his purchase, though. He said, “We needed to upgrade all of the drivers to Android, which some distributors will be leery of because of the cost and what drivers will do with them. But I don’t like making decisions based on fear.” He also said, “The product has the potential to pay for itself by proving that you actually delivered the material.”
- The blessing and the curse of technology. Every helpful technology advancement brings with it minor setbacks due to glitches and unforeseen impacts, especially with a new program. Drew noted, “Even with all of the time Eclipse had to work on it, there were five major bugs that we had to work out early on. I’m still seeing some buggy-ness; but, not remotely as much as when they first turned it on. Now, maybe 3 or 4 % of signatures are not getting attached.”
- Culture change. There’s a cultural shift with cell phones that must take place before you consider implementing POD. “Any company that goes on it has to be willing to embrace Android before they can embrace the product,” explained Drew. “If they still have Blackberries, and only for executives, there is a fundamental disconnect with the way they handle technology in their companies.”
- Internal adoption and learning curve. Change is hard, especially for people who have been used to doing their jobs the same way for many years. Implementing POD includes training and process changes that may require patience until they take root. Drew said, “Internally, it was a challenge to get the dispatchers and drivers consistent with using them. We’ve been on POD three months now and we’re doing pretty good. On any given day certain branches will get 100% of the signatures, but our total overall hit rate is coming out to only about 85-90%. At this time, we’re still having them sign an additional ship ticket because the POD product is not 100% reliable between some of the bugs and human error.” Then, there’s the added complexity of new hires and temporary workers. Drew said, “It’s hard to have a temp driver go out and know how to use it.” Also, training was a challenge for All-Tex because they have six branches that are not near one another. “It took us two months to implement it,” noted Drew. “For companies with one central warehouse that wouldn’t have to work out bugs, it would only take a couple of weeks.”
- Reporting. A current deficiency with the POD product is with reporting. There are no standard reports to go along with it. All-Tex has a custom report with their manifest that tells them whether they’ve gotten the signature, and provides visibility on the drivers’ clock in and clock out times.
Each distributor likely will weigh the above advantages and disadvantages differently; and therefore, the answer to the “is it smart for you” question isn’t straightforward. Drew feels much of the adoption will be spurred by word of mouth: “They’re going to want to talk to other distributors who already have it to make their decision.”
Cost can be a major deterrent for some distributors, and rightly so. In general, we’re not opposed to spending money to implement valuable change. In fact, we’re all for modernism in distribution and believe that change is necessary for continued profitability. In this case, though, our opinion on the ROI remains to be seen. It’s too new to say for sure whether or not this technology has a necessary place in the industry, as most distributors don’t have the same requirements as finished goods. For example, your trucks often are loaded with many large items going to a few places, versus many small items going to many different homes and businesses. You have fewer stops; and, product typically isn’t going cross-country. Therefore, there usually are less scans and opportunities for error.
The most appealing benefit we see is the professionalism of being paperless and the efficiencies that are gained there. But, we’re not sure if that’s enough to justify the upfront and ongoing costs, especially when the demonstrated accuracy with the product isn’t yet 100%.
As of now, we feel the technology is best suited for larger distributors or those covering vast geography, like All-Tex and Electric Supply. Harry from Electric Supply feels, “the benefits will outweigh the cost” for him. And, Drew believes, “the product is a winner.”
So, we’d like to know … what are your plans for POD? Do the pros outweigh the cons for you? Click here to take our quick and easy poll. The more people who answer, the more accurate results we’ll acquire to share with you in our next newsletter.