Improving profitability with operational efficiencies

Today, we're going to talk about toilet paper. I know, the title says something about operational efficiencies and I'll get to that, but the fact of the matter is: everyone, all around the world, uses toilet paper (although my mother tells of a time when it was replaced by pages of last year's Sears catalog in order to gain economic advantage).

We're facing a global economic crisis of sorts. We may or may not still be in a recession, depending on which economist you talk to and whether or not you happen to be unemployed. Consumer spending is down, and companies seeking to improve profitability are facing a dilemma. How do you increase profitability? The obvious answer is, "Sell more stuff."

But, you can't do that in a recession, so corporations are turning to other means. Instead of bringing in more dollars, they are reducing the amount of dollars that have to be spent to achieve the same amount of revenue. The end result is the same.

So where does the toilet paper come in? I'll stop short of advocating use of the abovementioned catalog as an economical replacement product, lest Sears' corporate attorneys unleash their wrath upon me. PAVECA is Venezuela's largest paper goods manufacturer and exporter, which manufactures toilet paper, paper towels, tissues, and other paper products. The company enjoys a significant amount of market dominance, and seeking to maintain that, they chose to use some interesting e-commerce technology to cut operational costs and improve customer service at the same time.

The Venezuelan company was able to shave two days off their order processing time, which not only led to faster order approval, but also increased the number of daily shipments out of their warehouse. Part of the solution revolved around a wireless implementation that allowed their sales reps to use their PDAs to enter orders while in the field.

They connect to the Internet through their wireless device, and can log directly into the intranet to get all the information they need in real time to service the customer. Orders can then be entered into the system in real time. The time between when the order was taken and entered into the ERP system was reduced from about three days (using a manual process) to about 20 seconds (using the wireless solution).

The system revolved around two pieces of software from iWork Software (http://www.iworksoftware.com): an automatic data collection system, and a workflow integration solution. The combination allowed them to automatically register sales transactions into the ERP system as they occurred. Each salesperson had a PDA that connected them directly to the company's ERP system in real time using the Pocket PC operating system. When an order is entered into the PDA, it goes into the ERP system, and follows a pre-defined automated workflow.

While the main goal was to improve workflow, there's another potential benefit here for anyone who implements this sort of sales force automation: better customer service. This is a topic I've talked about often, not because I see myself as some sort of consumer advocate, but simply because it is good business. Provide good customer service, and you'll make more sales, it's that simple. Because of the direct links and integration, customers can get their orders faster, and there's less chance of errors occurring. Customers are happier and more loyal, and so indirectly, the bottom line increases yet again because customers are more likely to place additional orders in the future.

Dan Blacharski has authored several books on technology, business, and entrepreneurial concepts. He has been a freelance writer and editorial consultant for nearly ten years and currently covers high-tech topics for the trade press. You can read more about his work at http://www.startuptrends.bigstep.com, or reach him directly at dblacharski@attbi.com.

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