Businesses are reeling from the additional cost loads brought about by the government’s recent budget.
Could technology provide solutions, writes David Gilroy.
No trip to Rome is complete without a visit to the Colosseum. Evocative and awe-inspiring, the Colosseum is the largest ancient amphitheatre still standing. A testament to the quality of Roman architecture and building capability. Built using wood, limestone, tiles, cement and mortar, the stadium was designed to accommodate around 65,000 spectators and could be scaled to up to 80,000. That compares favourably to modern day sports stadia. Taking ten years to complete, the project was initiated by the emperor Vespasian and finished a year after his death in 80 AD by his son Titus. How did the Romans manage to achieve such a feat without computer aided drawing, project management tools, heavy machinery and mechanised transport? Just drawing the plans must have been a massive undertaking. The Romans deployed hundreds of professional builders, engineers, carpenters, painters and decorators. Most importantly they assembled an enormous slave workforce of unskilled and unpaid labour from prisoners of war. Common practice in Roman times. Recruitment, retention, employee rights, and labour costs were not a brake on progress for this project.
The Christmas cocktails are but a distant memory and we are now facing the reality of a January hemlock cocktail served by the government comprising increases in employers’ national insurance, national living wage, capital gains taxes, and duty increases on alcohol, tobacco and vaping. Whether by design or unintended consequences, businesses of all types are having to look hard at productivity. Which let’s be clear is getting the job done with less people than before. There are basically two ways to improve productivity. Squeeze the lemon. In other words, keep reducing manpower until the pips squeak and ride out the lowering of standards in all areas until they become critical. Or by investing in technology solutions to enable greater efficiency, streamlining, task elimination or a total reimagining of business processes. Our G7 partners seem to be much better than us at investing and working smarter. Key question is what technology solutions are available to wholesale to improve productivity? Opportunities abound in inventory management, checkout processes, sales teams, deliveries, supply chain and logistics, employee scheduling, data driven insights, electronic marketing and energy management systems. Each one would benefit from an in-depth analysis through a productivity lens. I have selected four for discussion.
Sales Teams
Sales teams are expensive to run. Not just the basic salary costs. The bonus structures, vehicles, welfare, food and accommodation expenses all add up. They are notoriously difficult to manage too. How do you know that you’re getting real value from your sales force? What is their purpose? To acquire new business, develop leads, close leads, retain customers, account manage or act as order takers or all the above? Obviously, they need to be given clear and measurable targets, and their vehicles should be on trackers. I would argue that unless a salesperson is adding significantly to the bottom-line profit of the company through new business acquisition every year, it is questionable whether they should be on the payroll. Similar thinking applies to telesales operators. Are they operating inbound calls and order taking or outbound calling, order prompting and selling? And how much of their work can be handled by online and app order receiving? Can Artificial Intelligence (AI) be harnessed to reduce the workforce in this area?
Inventory Management
Inventory management is a cornerstone of productivity in retail and wholesale. Having the right stock in the right place at the right time is absolutely key to profitability. Traditional methods are prone to errors and inefficiencies, but modern solutions offer transformative benefits. Radio Frequency Identification (RFID) and Internet of Things (IoT) sensors provide real-time tracking and monitoring of inventory. These systems reduce manual errors and improve inventory accuracy. According to a study by Attaran (2017), IoT-enabled inventory management can reduce stock discrepancies by up to 50%. Predictive analytics powered by AI uses historical sales data and market trends to forecast demand. By ensuring optimal stock levels, businesses can minimise overstock and stockouts, thereby reducing holding costs, handling and improving cash flow (Chopra & Meindl, 2019). And we are now seeing trials in the major multiples using camera technology to identify stock failures and trigger replenishments.
Checkouts and Payment
The front-end sales process is a significant determinant of productivity. Technology streamlines checkout and enhances transaction efficiency. mPOS devices enable flexible and fast checkouts anywhere within the outlet. These systems reduce long queues and improve customer satisfaction. According to a report by Deloitte (2019), retailers using mPOS reported a 20% improvement in checkout efficiency. Self-checkouts are now well-established across the service industry. They empower customers to complete their purchases independently, reducing the need for cashier intervention. A study by Pantano and Timmermans (2014) highlights the importance of self-checkout in enhancing the shopping experience and improving staff productivity. Technologies like Apple Pay and NFC (Near Field Communication) simplify payment processes, accelerating transaction times and increasing throughput. Open banking offers huge savings on merchant fees, improvements in cash management, visibility of payment, control of debts and a frictionless experience for customers.
Vehicles
Operating an efficient fleet transport system is a big productivity win. Half empty vehicles and long periods of vehicle downtime eat into profits. Smart vehicle routing using optimisation software with real-time data to determine the most efficient journeys is essential. Optimising the drops per day is essential. As is reducing the complexity of individual calls. This includes parking restrictions, access ways and double handling. Management should be taking a hard look at customer delivery points which erode profit by being too far away or those with high degrees of difficulty. Double manning on vehicles should be avoided at all costs, as should taking cash payment at the delivery point. Planning routes that avoid high-traffic zones, where vehicles are likely to be stuck, reduces fuel wastage and unnecessary emissions. Load balance software to ensure trucks are carrying the maximum amount without overloading, which can reduce the number of trips and fuel usage. There will be opportunities to pick up new loads on the return trip to reduce empty vehicle returns. The Colosseum has stood the test of time and represents a high-water mark in Roman engineering – built in record time for its era. Today we have an array of technology to help us work smarter, faster and more efficiently. The government’s recent budget has put productivity at the top of the business agenda.
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