A foundational problem in our industry is a lack of connectivity — whether it’s your data, internal teams or external partners. This creates substantial pain across a project lifecycle particularly when it comes to purchasing and supply chain. While some of this pain today is outside the industry’s control, much of it could be alleviated with better technology.
Let’s start at the beginning — the design and the quote. If an independent designer is creating a commercial kitchen, they have limited information about a dealer or manufacturer’s inventory or leadtimes. The same is true for an estimator at a dealer filling out a quote in AutoQuotes. So from the start, equipment is being specified with limited info around it's actual availability.
Once a project has been awarded, the next step is for the dealer to “cut the PO”. While every dealer’s process is different, it usually looks like the following.
- Dealer manually enters every transaction from AQ file into their ERP (few ERP’s have functional AQ integrations)
- The dealer and vendor then manually correct pricing mistakes. Since AQ’s discount data isn’t a live feed from vendors, it is manually supplied by dealers and thus prone to errors. In addition to the manual costs, this can negatively impact a dealer’s gross profits as their customers will likely not accept a higher price because of an estimating mistake they made.
- Any customer price deviations must be known (or they're missed) and require documention to be supplied (entirely manual process today)
- The PO gets printed as a PDF and is then manually emailed as attachments to every vendor (while some dealers have created their own EDI systems, the vast majority are still using “paper” PO’s)
- Dealer waits to see if each vendor in a project can accept the PO via an email response (usually requires many follow-up emails)
- If the vendor accepts it but it requires some price changes, the dealer has to go back into their ERP, manually correct and re-issue the paper PO
- Once a PO is accepted, the dealer then documents this inside their ERP and communicates this to the team managing the project
- Depending on the ERP, there is little technology to help bundle purchases for better discounts or optimize freight costs
- The dealer then hopes the vendor stays true to it’s word and ships the equipment on time
In a normal environment, this is a painful process. In today’s environment — when leadtimes are changing daily — it’s excruciating. Dealers know that many items won’t be available by installation but they don’t know which ones. Frequently, a PO gets accepted only to be rejected later when it’s potentially too late to find an alternate. Importantly, if a dealer is not able to provide a piece of equipment to a jobsite on time, the fingers will certainly be pointed at them.
So now that we've discussed all the problems, how could this be improved?
As a reminder, any defined, rule-based process can be automated via custom software. So step one is to suspend disbelief at what’s possible. Like your commercial kitchen projects, start from scratch and design a new, rule-based PO process that would solve these problems. Below are some ideas that all have one important thing in common. Better connectivity.
CONNECT real-time vendor and/or dealer inventory with their CPQ —> always know what’s in stock
CONNECT dealer quote files with their ERP system —> eliminate redundant data entry
CONNECT vendor discount data with a dealer’s CPQ and/or ERP systems —> eliminate manual price-checks and ensure your profit margins are secure
CONNECT dealer PO system to their project schedules —> efficiently create accurate “need by” dates
CONNECT dealer quotes, PO’s and stock orders together —> efficiently bundle purchases for better discounts and lower freight costs
CONNECT digital PO’s to vendors via weblinks —> eliminate manual communication and instantly know when replacement items are needed
CONNECT dealer's unfilled PO's to the vendor community —> no more calling dozens of vendors...let them bid on your available orders
CONNECT ......this list could go and on and on...
While none of this technology can be built overnight, ALL of it can be built over time. At Centerpiece, we are singularly focused on creating better connectivity like this across the FE&S industry.