The real cost of manual order entry
Re-keying orders is the most visible cost of manual ordering and not the largest. The expensive part is what your sales team stops doing in order to make time for it.
Ask a distributor what manual order entry costs and you will get a number about wages: so many hours of order desk time, at so much an hour. That number is real and it is the smaller half.
The three layers
Transcription is the visible layer. Someone reads an order and types it into a system. It has a duration and an error rate, and both can be measured.
Correction is the second layer, and it is usually larger. Every transcription error becomes a credit note, a redelivery, or an argument, and each of those consumes several people rather than one. The reason this layer is underestimated is that it never appears as a line item; it is spread across whoever happened to pick up the phone.
Displacement is the third, and it is the one that actually matters. Order entry happens in a fixed window before a cut-off. It is urgent, and it crowds out everything that is merely important, which in a distribution business is the account management that grows revenue.
The question that surfaces it: in the two hours before your cut-off, what is your sales team doing? If the answer is taking orders, that is the cost, and it does not appear in any wage calculation.
Working out your own number
There is no industry benchmark worth quoting here, because the variance between distributors is enormous. Yours is easy enough to derive:
- Orders per week arriving by phone, email or spreadsheet, times minutes to key one, gives you transcription.
- Orders per week that generate a correction, times the total time spent resolving one across everybody involved, gives you correction.
- Hours per week your commercial people spend on order entry rather than on accounts, times what an hour of account management is worth to you, gives you displacement.
Most businesses find the third number is the largest, and most have never calculated it, because it is the only one that requires putting a value on work that did not happen.
What automation actually removes
Be sceptical of anyone claiming to eliminate all three. Self-service ordering removes most of the transcription layer, because the person who knows what they want types it themselves. It removes a large part of the correction layer, because validation happens at entry: pack sizes, minimums, discontinued lines, credit position.
It does not remove the orders that arrive by phone from the venues that will always ring, and it does not remove the judgement calls. What it does is shrink the urgent work enough that the important work fits in the day, which is the entire point.