Timely Implementation is a Matter of Survival for Small and Medium Distributors.
REDWOOD City, CA., - June 6th, 2008
NEW YORK - With supply-chain partners scrambling to reduce costs in today's unstable economic climate, Mark Barnekow, president and CEO, Amphire Solutions, Inc. , said electronic order-management systems significantly lower expenses among trading companies.
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MARK BARNEKOW |
"Technology can reduce costs, enhance revenues and streamline the whole supply-chain process so that when the operator takes accountability and places orders himself, there are fewer errors and the size of the order will increase. We have seen that between pre-electronic ordering and post-electronic ordering, there is a 10-20% increase in order size.", Barnekow, a member of the ID Editorial Advisory Board, said during a recent interview with ID.
He said distributors that use the system can save $25-100 per order based on eliminating human inputting and less reconciliation of issues in the order.
"There is a significant cost reduction of more than 50% by placing an electronic order because you're eliminating the need for human intervention and errors", he said.
Amphire Solutions of Redwood City, CA, a global software as solution provider, was founded some eight years ago and today 400 manufacturers, 125 distributors, 27 of which are ID Top 50 firms, and 100,000 operators take advantage of its e-commerce process.
Barnekow said distributors using Amphire’s system have been able to streamline and improve significantly the quality of their orders thereby saving them money and improving their already thin margins. He said they then have the flexibility to pass on pricing benefits to their operator-customers by offering them competitively-priced products.
"As long as distributors load catalogues properly with correct pricing and the operator places the order correctly, distributors can see cleaner orders with the electronic method", he said.
The process also frees DSRs from having to input orders during a sales call. This extra time allows sales reps to offer business-building consultative services to their customers, he said.
"DSRs become more consultative rather than mere order takers. In this environment, sales reps can really help operator-customers solve their problems and attract more patrons to their restaurants", he said.
The benefit for operators is that they have access to an automated ordering system that is available round the clock, Barnekow said, allowing them to place orders without interruption. The system frequently records restaurateurs' on-line presence after midnight, he added.
"The operator has the ability to use the system to build the order over time and not be confined to a predetermined window. Operators can see what’s going on in their businesses throughout the day, update and increase their orders so long as they submit it by the distributor’s deadline so that he can fulfill it. They have a lot more time to build their orders", Barnekow explained.
While many distributors have said some of their customers are opposed to technology, Barnekow said this reluctance is diminishing because a younger, tech-astute generation of restaurateurs is entering the business and, additionally, computers are becoming commonplace and Internet bandwidth is expanding.
"The system is more available today", he said.
As for the future, Barnekow said up until now the company has been busy integrating supply-chain partners with this software and then getting transactions flowing among them. A next step would be to leverage their abilities to do what he called higher-value tasks such as rebate tracking.
Foodservice software providers that have survived until today are expanding and being able to service their customers more effectively with broader services, he said.
"Eight years ago some brave companies got behind Amphire and we came through for them. Today we’ve become bigger and successful which should give smaller companies in the supply chain confidence that they can work not only with Amphire but also with our competitors", Barnekow said.
Smaller companies will be able to take advantage of technology that was developed for larger firms at lower costs, he said.
"We will know that we've really become successful when we get smaller companies to embrace what we do. It's a matter of survival for smaller and medium-size distributors", Barnekow said.
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