As long as you can prove the return on investment, you can get the attention of distributors when it comes to technology that improves productivity. Distributors are implementing a wide array of software, hardware and gadgets that deliver efficiency gains. Many of these technology tools also are doing the double-duty of making distributors more customer-friendly.

Visit a distributor today and you'll find that technology tools include warehouse management automation, Web sites that make ordering easy, and portals that allow customers and suppliers to check inventory and order status. You'll also notice wider use of barcode scanning to help with inventory management, as well as pick and pack. Even voice recognition has entered the scene, giving warehouse workers the ability to track the stock they pick with their hands free.

A number of trends are driving the adoption of new technology. One is the growing understanding that technology advances make a competitive difference. Nobody wants to look out-of-date in front of the customer. Another adoption driver is the recognition that vendors are now creating technology packages with a clear ROI in mind. They know that distributors want a quick payback for their investment. The average implementation now is designed to deliver an ROI in six to 12 months, 18 months at the most. Finally, there's a new generation of managers and owners coming aboard who are not resistant to technology. As they get their hands on the company's computer system, they're saying, "Hey, did you know this system will fax invoices over to customers as soon as they're entered? That'll save us $1,500 a month!"

There is one area of efficiency gain that wasn't intended as a productivity measure. Automated and improved customer relations efforts have begun because of the competitive desire to draw close to customers.

"One technology that is taking a stronghold is Internet storefronts, where customers are doing customer service and order entry on the Internet," says Doug Levin, executive vice president of Prophet 21 Inc. in Yardley, Pa.

Rather than just a nifty tool for customers, Levin notes that customer relations technology is a competitive differentiator.

"Distributors are winning contracts over their competitors because of the value," says Levin. "And it lowers cost for distributors since there's no re-keying. The Web site sends an acknowledgement and advance ship note to the customer."

According to Levin, distributors who make life Web-easy for their customers could grab business from distributors who lag in technological advances.

"A lot of people say, 'My customers won't want to enter their orders into our Web site,'" says Levin. "But the acknowledgement is imported into the customer's system, so the Web becomes the portal for customer ordering. The customers say, 'Now it's so easy to deal with you, I think I'll buy janitorial suppliers from you, as well.'"

Some insist that customer-facing advances are more than just a way to get an edge up in the market. Progressive customer service technology is a competitive necessity as customers come to expect distributors to provide useful Web interfaces.

"If you don't offer services on a Web site, customers will begin to view you as out of it," says Denny St. Dennis, product manager for TakeStock at Aperum Inc. (previously Software Solutions), Duluth, Ga. "The distributors' customers expect them to have it, just like they expect a fax machine."

Over at McJunkin Corp. in Charleston, W. Va., the distributor decided to make it easy for customers to use its automated e-procurement systems to buy goods. "We spent time in the last year learning the systems that our customers are on," says Pam Davenport, vice president of implementation. "We have a lot of knowledge about SAP. We don't use SAP ourselves, but now we can help them design the interface because we know what their system is doing. Our customer sees it as a huge differentiator."

Though customer relations technology is typically introduced for competitive reasons, distributors who implement technology to serve their customers tout the value of the systems for driving down internal costs.

"At our Web site, called Applied ACCESS, customers can self-serve their parts with their own unique pricing," says Jim Hopper, vice president and CIO at Applied Industrial Technologies in Cleveland. "They can see availability at our location and through to our suppliers. We truly have created visibility down the supply chain." In most cases, efforts to automate the customer connection come with their own ROI. Simply put, if you capture your customer data electronically, then you can move through purchase order, pick and pack, shipping and invoicing without additional keying, thus speeding order-to-ship time and reducing errors.

For distributors, the warehouse is a vast territory of past waste that's undergoing a technology makeover. With inventory holding capital hostage, even small productivity gains can deliver quick ROI on technology purchases.

"Distributors are automating their warehouses because they want to get a hold of their inventory, which is one of their largest assets," says Danna Nelson, FACTS (a warehouse management tool) product manger at Aperum.

She explains that the desire for productivity improvement is partly a result of the economic downturn.

"In a down economy you can't just increase revenue by adding products," says Nelson. "So distributors are turning to technology to trim costs. They're increasing their margins rather than increasing revenues."

While some portion of warehouse efficiency involves inventory management, another territory ripe for improvement is the process of picking orders.

"We have started to do more with RF scanners," says McJunkin's Davenport. "Our guy scans the bin as he picks up the material. By the time he comes back to the counter, he has the invoice and the information goes real time into the system."

Advances in barcode scanning also reduce the need for extensive training, since scanners can easily discern the correct product. With high turnover in warehouse staffing, a reduction in the need for training goes to the bottom line.

"Distributors don't have to invest in all the training of someone who might not come back next week," says Aperum's St. Denis. "Now they say, 'Here's your handheld and off you go.' The handheld tells the assistant what bin to go to in the warehouse and shows where it is."

Barcoding delivers even more productivity gain when it's combined with voice-recognition technology.

"Voice recognition has become a viable and affordable technology. Customers are looking at voice because it has a quick ROI for distribution," says Martin McLean, vice president of development at Intek Integration Technologies Inc. of Bellevue, Wash. "Instead of a prompt on a screen, he hears a prompt on his headset. The script is customized around the customer needs."

Even small technology advances can make a bottom-line difference. Steve Epner, president of BSW Consulting Inc. in St. Louis, insists that distributors can create savings simply by deploying technology that already resides on their PCs.

"People in distribution send out invoices. An invoice costs $1 minimum if you look at the cost of paper, stamps and back office," says Epner. "Every mainline computer system allows you to fax invoices directly from the machine."

According to Epner, a company that faxes 1,000 invoices each month can take a monthly savings of $1,000.

"It's straight to the bottom line and they're still afraid to do it," he says. "But when they finally do it, they come back and say 'This is great.'"

W.W. Grainger has long been on the forefront of technology advances in distribution. One recent area of concern is the company's ability to get products close to customers. Eschewing the FedEx model of centralizing logistics, Grainger is working on the idea of keeping products close to the customer rather than close to the distributor. They're even testing drop-shipping as a way to reduce product handling.

"We've launched logistics transformation," says Jarnail Lail, vice president of business systems at Grainger, Lake Forest, Ill. "The object is to get the distribution centers in places where we don't have them and eliminate one of the tiers so we're not handling the products as much."

Another improvement Grainger has initiated is placing product vending machines within the customer's facility.

"We have implemented a locker system at the customer's site," says Lail. "They look like dispenser machines."

Lail explains that the customer enters a password into the locker/vending machine and chooses the product. The machine sends the information to Grainger by landline, generating an order and an invoice.

"They use the password and take the material away. It eliminates will-call orders. We touch the product once and don't waste our time or the customer's time. Just like any other order, it is integrated into our SAP systems." Initiatives like these are making a difference in the way many companies are going to market. More importantly, they're raising the bar on service, which helps bring distributors even closer to their customers.