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Digital Is Here: What Does That Mean?

Three or four months ago, digital transformation was still optional: each company would have to do it sooner or later. But the immediacy of digitization has become imperative. For survival, each business in this industry has to start that journey today.

“Digital” is a broad term, and it’s hard to know exactly how to define it. The truth is, it means something a little bit different for each company, depending on existing tools, capabilities, and investment in digital platforms. But if you consider the context of our specific industry, it can be defined in a concrete way. For the Electronics Industry, it means transitioning functions that use phones, faxes, paper, or conversations to more efficient processes that work all the time, under any circumstance. Paper and manual operations have a number of pitfalls: if an employee is out sick, the process fails. If the paper gets lost, the process fails. If a disruption mandates a remote workforce, the process fails.

For many companies, the quick-and-dirty digital remedy has been a shift to emailing spreadsheets and files. But that solution is not scalable: with so many manual touchpoints, email and spreadsheets fail when someone is out sick, on vacation, or furloughed. Furthermore, siloed communication can not be analyzed in the aggregate, preventing visibility across the company. Email is, in fact, the enemy.

“It’s like the consumer market with Amazon. Your customers want to see what you have, if it meets their needs, and how quickly they can get it at a reasonable price. The future is now in terms of automation for business to business.”

Tim Fredricks
Channel Account Manager

True digitization means adopting a new business process, centered around a platform that supports a few key tenets:

  1. First, information must flow into the selected digital platform in an automated way. The time it takes to manually key in data is too costly (for example, receiving a PO and having to manually enter that into an ERP or MRP for fulfillment), and the typically small transactional sizes in the Electronics Industry cannot support that level of overhead going forward. Automated intake of the data is the only way to drive costs out of each transaction and to ensure profitability in any circumstance.
  2. Second, the resulting data and process must be transparent. With automation, all of the required data is pulled into a centralized system for easy access and viewing. So if all quoters happen to call in sick one day, a colleague or manager can view their work queue, see what quotes are new or in process, and easily pick up that work to ensure a positive customer experience. The same transparency must hold for all data inflows to a company, not just RFQs. Sales Orders, Forecasts, Change Orders, Shipping Notices, Invoices, etc. — all of these critical pieces of information that are central to selling or buying parts must be automated as they move in and out of a company.
  3. Third, supporting data must be integrated. Having data stored in multiple systems is a real challenge for those processing Quotes, Sales Orders or other key documents, requiring a lot of copying and pasting just to process a request. Digitizing doesn’t mean those systems have to be replaced – it just means that the data should be integrated into a central platform to allow a process (or multiple processes) to be automated. For example, when a Sales Order is received, a salesperson must validate that the part number is correct, then that the quantity on hand supports the requested buy, and that the delivery date is achievable. This might mean logging into 2 or 3 different systems to gather that information  for validation before processing. Integration of that required data would allow the Sales Order to be automatically validated against a series of rules, and then processed. If validation fails, “processing” might mean following up with the customer and adjusting the Sales Order for successful fulfillment. Or, if all the data is valid, the Sales Order can flow directly into an ERP/MRP for fulfillment without a human having to touch it. Digitization enables your talented, well-compensated teams to perform key strategic tasks for your company rather than spending valuable time manually entering and processing data.
  4. Finally, data must be joined, or linked, together to create analytics and insights. As a result of the tenets above, all of the data necessary to automate and process intake of key documents is now accessible from a single, centralized system. Add to that the automated intake of the documents themselves, and a company can now clearly understand the success rate of quoting, the frequency of Sales Orders from a particular customer, or the number of exceptions or successes from a particular supplier or trading partner. Insights revealing demand by time of year or how it relates to large industry events or shifts can also support decision-making. With the centralization of information, your company can now make solid and well-informed decisions founded on real and actionable data.

Once these few tenets are met, your business processes are now digital. It may seem easier said than done, but it is achievable, and it is required. The process of working through steps 1-4 above will be a journey that reveals both your company’s strengths and shortcomings.  The determinations  will be different for everyone, but the outcome is always the same: improved business processes, clear internal transparency, higher reliability of outcomes, happier customers, and a much more resilient and durable company.

Digital Is Here: What Does That Mean?
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