Background
Shop Tools is the largest independent distributor of industrial supplies for manufacturers and machining companies in the Colorado area. As a provider of industrial vending solutions, Shop Tools has built a key division of their business by providing on-site vending machines at customer locations to simplify the purchase of high demand products. The size and inventory is tailored for each customer offering small items like markers and gloves, all the way up to consumable tools. With a daily delivery service, Shop Tools prides itself on ensuring their customers always have the tools they need to do their jobs, which requires maintaining sufficient stock at all times. To efficiently manage their inventory that exceeds $2M, they rely on Epicor Prophet 21 to streamline communications. Shop Tools was eager to implement a solution that would allow them to process customer orders more efficiently.
Challenges
Need to Simplify Inventory Management: On-site vending machines offer a host of customer benefits including better usage monitoring, faster access, reduction of waste, and automatic replenishment. But managing the vending machine business was complex and incredibly labor-intensive. To track purchases, managers remoted to on-site computers or vending machines to manually extract reports to account for sales and replenishment data and transferred this information into large reports, often more than 50 pages in length. Then this data was manually re-keyed into the ERP system for replenishment and rekeyed again for invoicing.
Need to Reduce Data Entry Errors: Considering that each order contains as many as 300 part numbers, manually re-entering this volume of data many times introduced the possibility for human error at each stage. Sometimes this resulted in incorrect billing, which created unnecessary administration. But more frequently, it meant an incorrect part or quantity, which could lead to replenishment errors for an essential item. In a worst case scenario, this could bring a customer’s business to a grinding halt while they waited for Shop Tools to resolve the situation.
Need to Reduce Cost of Error Resolution: Some of the largest vending machines reach an impressive 7'2 and can hold up to 2,700 items. With this volume, it’s easy to imagine how stocking errors could add up. When errors inevitably occurred, Shop Tools was committed to immediate resolution in order to maintain their excellent reputation for customer service. This meant that staff found themselves driving to the customer’s location to correct errors, sometimes as often as once per week, which posed a significant cost to the business.
Need to Shorten Order-to-Cash Cycle: Due to the high volume of data that required processing and the multiple steps involved, handling vending machine orders was a long drawn-out process. Since data was touched up to four times prior to invoicing, the order-to-cash cycle was less than ideal, often around 45 days and any keying errors further delayed invoicing. Shop Tools identified the opportunity to improve the speed of invoicing and subsequently receiving payment.
The Solution
After evaluating several options, Shop Tools turned to Conexiom for sales order automation. Conexiom proved to be the ideal solution to bridge the gap between customer usage and order replenishment. It directly receives data from vending machines and automatically translates it into stock replacement sales orders in their existing ERP system. “Conexiom has eliminated the need to manually process volumes of data multiple times for each customer, saving us a tremendous amount of time,” shared Kelly Young, VP of Operations at Shop Tools.
Shop Tools was also impressed with the simplicity of getting started. They selected one customer to enroll in Conexiom and they were up and running within a matter of days. “Conexiom is incredibly easy to use. Now that we’ve mastered the mapping process, new customers can be enrolled within a single day,” said Young.
Benefits
Faster Processing and Saving Money: Time is the number one benefit. Eliminating the manual handling of vending machine orders has saved the team hundreds of hours. “Now customer orders are processed in minutes rather than hours,” said Young. “By the time we arrive in the morning, 30 percent of the daily orders are already completed thanks to Conexiom.” The team is thankful for the elimination of tedious data entry and rather than hire additional employees to process orders, Shop Tools has noticed a significant reduction in labor costs.
Error-Free Processing: Eliminating the multi-step data and order processing has dramatically improved Shop Tools’ accuracy rate. Customers are enjoying seamless product replenishment with fewer incorrect products or stock-outs due to keying errors. Although they’re seeing less of the Shop Tools staff due to fewer on-site emergency resolutions, customer satisfaction is strong and Shop Tools is enjoying cost savings from processing fewer returns and handling urgent errors.
Accelerated Order-to-Cash Cycle: “It used to take about 45 days to get paid,” shared Young. “But with Conexiom, we’re getting paid about 15 days sooner.” Automating the sales order process means invoicing occurs faster, freeing capital for Shop Tools to reinvest in the business. “An added benefit is the increased visibility which allows us to rely on actual usage data, rather than customer-supplied requirements. This helps us to better manage inventory supplies while successfully reducing overstocking and stock-outs. It’s a big win for both Shop Tools and our customers.”
Future Growth: After reaping the immediate benefits with their first customer, Shop Tools has successfully enrolled the majority of their vending machine customers with Conexiom. “Conexiom is remarkably easy to use and delivers outstanding value. For the time savings alone, it just makes sense,” expressed Young. Shop Tools employees now have free time to review order quantities before they’re sent out for stocking. This additional check helps to ensure order accuracy and further decreases the risk of errors. Conexiom has changed the way Shop Tools does business and they’re thrilled. “I’ve already recommended Conexiom to others because it’s a huge time saver,” exclaimed Young. In addition to enjoying time savings and improved accuracy rates, the business case for Conexiom remains strong. “From a cost perspective, we’ve achieved ROI in the first 30 days and we’re excited to enroll even more customers.”
About Conexiom
Conexiom allows manufacturers and distributors to focus on serving customers, not entering orders. The patent-pending Conexiom sales order automation solution was created by ecmarket, a cloud solutions developer. Conexiom enables printed or emailed customer purchase orders to be converted to electronic sales orders automatically, eliminating manual entry and allowing companies to better serve their customers. With 100 percent data capture accuracy, Conexiom has become a reliable business solution that helps customers maintain a competitive edge. For more information visit conexiom.com.
