Sage Advice US

Distribution challenges for a fast-moving market

We don’t need to tell you that against a backdrop of globalization and cost-cutting, competition is fierce and competing on price has become the norm. In order to gain market share and prosper, companies in the distribution and retail sector must deliver high-quality products and services at a low cost.

Retailers, wholesalers and logistics service providers operate in a market which has rigorous quality requirements, high volumes of international trade, and places intense pressure on all stakeholders, including distributors, customers, and suppliers.

To achieve this ambitious goal and maintain customer satisfaction, there are three key things that companies must do:

Streamline processes to eliminate inefficiencies

Efficient supply chains reduce costs and increase time-to-market. Monitor your supply chain, identify where problems are beginning, and enable your business to take action. This will optimize costs.

Adopt best practices and learn from business intelligence

What works well for your company? Management tools are essential for analyzing and measuring a company’s key data: sales performance by customer or product, manufacturing cost analysis, etc. Decision-making tools enable users to collect, consolidate, model and extract available data with a view to making the best possible decisions, both operational and strategic. Providing users with the right information at the right time increases efficiency.

In addition to looking at your own practices, research what leading companies are adopting now and determine how to adapt and integrate into your processes.

Use innovative technologies to automate and improve

Make your technology help you versus structuring your process around the technology. With modern technologies, you have better supply chain visibility and can stay ahead of your competition.

Technologies are continuing to grow and improve to give distribution and retail companies a higher chance to meet the above objectives. You can boost distribution efficiency with measurable results.

Several tools and processes are now critical: sales forecasting; optimized order management; procurement, and delivery execution. In addition to providing these fundamental requirements, enterprise resource planning (ERP) systems must be capable of evolving at the same pace as the sector’s companies, providing solutions to problems and assisting them with new challenges they face. Mobility, radio frequency identification (RFID) technology and Business Intelligence are at the core of new practices and a necessity for successful distribution businesses.

This fast-moving market presents numerous complex business challenges

Sales forecasting

Rather than a manual process that costs vast amounts of time (and therefore money), technology helps to ensure accurate forecasts at the click of a button. Not only does this save time, it also allows informed decision-making and planning for improvements.

Order management and procurement processes

One of the biggest challenges faced by the distribution sector involves stock. No business will make a profit, or survive if customers are left waiting because products are out of stock. Inventory management is a constant balancing act to match demand to stock levels. This balancing act must be adjusted in line with seasonal variations, market trends and conditions so as not to be too low or too high.

Inventory tracking enables complete control over restocking and replenishing so that the business is never over-stocked and therefore not losing money in doing so. Notifications can allow the business to understand what needs to be restocked, using insight into products that are selling best, too.

Procurement processes make it easier to choose the right suppliers and the most cost-effective solution.

Delivery execution

Inventory levels must be optimized in order to meet customer demand and ensure fast delivery times.

Customer orders can be fully tracked with set workflows and assigned resources to ensure they get the best service and a good delivery time.

A modern enterprise resource planning (ERP) solution enables management and control over all of the above. Mobility, radio frequency identification (RFID) technology and Business Intelligence are at the core of new practices and a necessity for successful distribution businesses.

Conclusion

In order to combine performance, innovation and strategic decision-making in a fast-moving market, it is, of course, critical to anticipate technical and organizational developments, and be equipped with appropriate solutions, implemented by partners who are both knowledgeable about your business constraints, and share your ambition.