3 Ways Generative AI Solutions Are Reducing Costs in B2B Sales Order Management

In today’s manufacturing and wholesale landscape, B2B enterprises face the challenge of managing complex order lifecycles efficiently. Traditional manual processes can be time-consuming, error-prone, and costly. However, the integration of Generative AI in B2B order management is transforming how companies handle orders, leading to significant cost savings and improved customer experiences.

What Are The Current Problems Faced By B2B Enterprises?

Current order management practices in B2B manufacturing and wholesale often rely on manual processes, spreadsheets, and outdated ORC document management software.

• Labor-Intensive: Manual order data entry and processing demand large teams dedicated to repetitive tasks.
• Prone to Errors: Manual data entry or outdated OCR technologies carry high error risks, affecting order accuracy and on-time deliveries, ultimately leading to poor customer satisfaction.
• Reactive Inventory Management: A lack of complete order visibility fails to predict demand accurately, causing overstock or stockouts, increasing holding costs, and leading to lost sales.
• Manual Communication: This leads to miscommunication and inefficiencies, slowing down the order fulfillment process.
• Lack of Real Transactional Data: Traditional methods do not provide real-time insights, hampering strategic decision-making.

These approaches struggle to keep pace with the dynamic needs of modern businesses, resulting in higher operational costs, reduced efficiency, and missed opportunities for revenue generation.

How Generative AI Order Management Solutions Are Cutting Costs?

1. Enhancing Resource Optimization

AI-powered systems are revolutionizing order management by significantly reducing operational costs. By automating routine tasks such as order entry, validation, and updating customers with order statuses, businesses can achieve substantial financial savings. AI enhances efficiency by processing orders faster and more accurately, allowing for better resource allocation. Here are some key figures and insights:

• Resource Reallocation: Gen AI automated sales order processing allows one person to handle 950 orders per day compared to just 47 orders processed manually, enabling staff to focus on high-value tasks like revenue generation.
• Faster Processing: Manual processing takes up to 10 minutes per order, while AI completes it in just 30 seconds, freeing your team to serve customers and generate more revenue.
• Lower Costs: The direct cost of manual order entry is $20 per order, whereas AI reduces this to $5 per order.
• Maximize ERP Investments: By integrating AI-powered order management with your ERP system, you can enhance the efficiency and accuracy of your existing infrastructure, ensuring you get the most value from your ERP investments.

This efficiency supports a reduction in operational expenses by 25-30%, optimizing resource allocation and enhancing financial performance.

1. Reducing Order Errors

The average direct cost of a single order error is around $5,100, attributed to several factors:

• Returns, Shipping, and Restocking
• Correcting Before Shipping

AI-powered systems drastically reduce errors in order management by leveraging advanced technologies to ensure higher accuracy and consistency. By automating error-prone tasks and implementing real-time validation, AI removes human errors that can lead to costly mistakes and operational inefficiencies. Here’s how AI-driven automation reduces errors:

• Automated Data Entry: AI systems perform data entry with 100% accuracy, eliminating typographical errors common in manual processes.
• Real-time Validation: AI validates orders in real-time, cross-checking with your business master data before processing. AI also handles special exceptions or agreements with your customers, which helps catch and correct errors immediately.

By automating data entry, performing real-time validation, and detecting and correcting errors, AI significantly reduces the likelihood of costly mistakes, leading to substantial savings and improved accuracy in order management processes.

1. Reducing Customer Churn

Even though customer churn is an indirect cost, it is highly impacted by order errors. Around 80% of customers are likely to buy from competitors after experiencing two or more errors. The average cost of customer churn related to customer satisfaction in the manufacturing industry is $12,900. AI plays a crucial role in reducing customer churn by enhancing customer service and ensuring timely deliveries. Real-time insights from AI enable better service delivery and improved accuracy, leading to higher customer satisfaction and retention. Here’s how AI-driven automation reduces customer churn:?

• More Time to Serve Your Customers: AI reduces the repetitive manual tasks of your team, freeing them to focus on serving customers.
• More Perfect Orders: AI improves on-time and in-full deliveries by 22% and reduces order cycle times by 46%, leading to more satisfied customers.
• Customer Retention: With AI-automated sales order solutions implemented, businesses report a significant reduction in customer churn by upwards of 34.5%.
• Enhanced Service: AI's ability to streamline processes and provide real-time insights contributes to a 20% boost in Net Promoter Scores.

By improving customer satisfaction and retention, AI fosters long-term loyalty and promotes sustainable business growth. It is between 5 and 25 times more expensive to acquire a new customer than to retain an existing one. Satisfied customers are less likely to churn, ensuring a stable and loyal customer base.

How VAO Can Help Achieve These Results

VAO's Generative AI solution is designed to address the challenges of order management with a focus on fast and easy integration with any enterprise system. Here’s how VAO can help:

• Seamless Integration: VAO's Generative AI solution can be easily integrated with existing systems, minimizing disruptions and ensuring a smooth transition from manual to digital transactions.
• Comprehensive Order Management: VAO offers a complete sales order management solution, providing 100% visibility in your order-to-cash cycle, going beyond simple document management or data extraction.
• AI-Driven Accuracy: By leveraging AI, VAO ensures accurate and efficient processing of orders, significantly reducing errors and improving overall order accuracy.
• Real-Time Insights: VAO provides detailed AI reports and dashboards, offering real-time insights into order status, and helping businesses make informed decisions quickly.
• Improved Customer Experience: With faster processing times and more accurate order handling, VAO enhances the customer experience, leading to higher satisfaction and retention rates.

By adopting VAO's Generative AI solution, businesses can achieve substantial cost savings, minimize errors, and reduce customer churn, leading to improved financial performance and a competitive edge in the market.

Explore how to start your enterprise digital transformation with VAO. Visit our website to learn more and schedule a demo today.

References?

“The Role of Artificial Intelligence in B2B Order Management”

Smith, J. (2023). Journal of Business Automation, 45(2), 78-92.

This article discusses the impact of AI on order processing efficiency and cost reduction.

“Unlocking Operational Savings with Regenerative AI”

Patel, R., & Lee, S. (2024). International Conference on Intelligent Systems, 123-137.

The authors explore how Regenerative AI algorithms optimize supply chain operations and reduce operational costs.

“Customer-Centric Order Fulfillment: A Case Study”

Garcia, M., & Wang, L. (2022). Supply Chain Management Review, 30(4), 56-71.

This case study highlights how B2B order management software improves customer experiences and drives cost savings. VAO Survey: Order Management in the? Manufacturing and Wholesale Industry.? (2024)