Making Your Presence Known: How Distributors Distinguish Themselves in an E-Commerce World

As brick-and-mortar companies succumb to the new world of virtual and on-line giants, many businesses scramble not to be added to the rubble. And that means reimagining a business model that once proved so successful, the model of distributorship. Between the shift in consumer buying behavior and the uber rapid evolution of technology, many distributors often feel as if they are becoming obsolete, “realizing that what might have worked fine in the past, might not work in the future—or even the present.” 1 This blog series delves into the key challenges facing distribution companies and how new technology is helping them not only meet those challenges but also solidify their importance in the distribution market.

Overcoming Inventory Management Challenges
Managing inventory to handle every issue from supply chain disruptions to intensifying customer expectations (which we will address in later blogs), can be a 24/7 job. But in today’s market, inventory management needs to be more like a 3/3 job just to fit in all the other required tasks to run a successful company. “Do more with less time” is the new workflow norm, but wouldn’t you like to add “with ease”? To do so, you’ll need to invest in a modern ERP system, preferably cloud based. Sound expensive? Not as costly as going out of business. Fortunately, the best technology isn’t reserved only for the mega-e-distributors who can afford it. Any distributor from a small start-up to an established large corporation can afford an ERP system that fits their current company size and grows with them.

Challenge #1: Flying Blind (Accurate Demand Forecasting without Surprises)
Solution:  Real-time visibility into demand

“One can have only as much preparation as insight.” – Jim Butcher

At this stage in the game, no distributor should ever be surprised by a rise and fall in demand or even by a black swan event. If you’re using solutions for demand forecasting, then the benefits automatically spill over into better warehouse management. Cloud ERP systems often incorporate advanced analytics and forecasting capabilities, allowing you to analyze historical sales data, market trends, and other factors to generate accurate demand forecasts. Today, AI and machine learning can support forecasting and order anomaly detection, and these capabilities work symbiotically with your current inventory system to manage and lower inventory levels. If you’re using solutions for demand forecasting, then the benefits automatically spill over into better inventory management.

Challenge #2: “We’re gonna need a bigger boat” (Managing Inventory Growth without Overstocking)
Solution: Real-time visibility into supply

“The more inventory a company has, the less likely they will have what they need” – Taiichi Ohno

Do you feel like your inventory needs are growing faster than weeds? Do you sometimes wonder, on the warehouse floor, if the right hand knows what the left is doing? By implementing a robust inventory management system, you can improve inventory efficiency and save time and money for your company. Modern ERP systems, especially cloud-based ones such as CloudSuite Distribution, provide unprecedented real-time visibility into inventory levels across the entire enterprise, including warehouses, distribution centers, and stores. ERP systems offer stock auditing solutions, allowing distributors to track stock anomaly levels accurately, monitor inventory movements, and make informed decisions regarding stock replenishment, reordering, and allocation. By setting minimum stock thresholds, reorder points, and lead times when inventory levels reach a specified threshold, these solutions help prevent stockouts and overstocking, optimizing inventory levels and reducing carrying costs.1 In addition to real-time visibility is mobile accessibility, which “enables distributors to easily manage warehouse functions such as cycle counting, storage and allocation, and inventory tracking by bin location to name a few”.2 Overall, using automated processes to manage your inventory from floor to door will keep you from spending money in the wrong places (literally) and allow you to reinvest it where you’ll see the biggest rewards.

Challenge 3: Inaccurate Data (Better Data Collection Without Tedium)
Solution: Real-time visibility into operational data

 “What gets measured gets managed.” -Peter Drucker

Inventory accuracy includes not just how much inventory is on hand, but where it is in the warehouse. Inventory accuracy also encompasses tracking information about the inventory, such as lot numbers, serial numbers, expiration dates, country of origin, and ownership (distributor, vendor, or customer). Having inaccurate information not only causes confusion in warehouse operations (with wasted time and money chasing down the right information or looking for product), but also “creates a cascading effect on other aspects of the business, including sales and finance. In addition, if the counts aren’t right, the purchasing department doesn’t have the right information when determining what to buy, when to buy, and how much to buy.” 1

Challenge 4:  “Where’s Mary?! We need Mary!” (Managing Your Inventory Operations Without Overly Relying on One or Two “Go-To’s”)Solution: Finding a trusted cloud partner

“Knowledge is like money: to be of value it must circulate, and in circulating it can increase in quantity and, hopefully, in value.”
-Louis L’Amour

If your business is operating on a dated or legacy on-premises ERP system or WMS (warehouse management system), chances are only a handful of people understand how to manage and maintain that system successfully and perhaps only one individual fully understands the complete picture. Let’s call her Mary. Just like your data, Mary is siloed, making her indispensable. But what happens, then, if Mary or anyone from your “go-to” team leaves the organization? How can your organization ensure the continuity of day-to-day operations with the potential loss of technical expertise? Whether this loss comes through resignation, retirement, health issues, or merger and acquisition,” 3 you’ll not only need to find replacements but also spend time and money growing new Mary’s.

By shifting your ERP system to the cloud, “your organization is supported by a comprehensive solution that is continuously updated so you don’t have to worry about current trends forcing you to upgrade your system down the road. Furthermore, a trusted cloud partner should have a substantial investment in IT personnel that would be difficult for some of the largest organizations to match. A small army of Marys are dedicated to monitoring your organization’s ERP system and your data to ensure they are optimized and protected .” 3

The warehouse is the heart of your company, and better technology can help you overcome the main challenges of running its inventory at optimum levels. And when your inventory is meticulously organized, “the rest of your supply chain will fall into place.”4 By investing in or upgrading your current ERP system or to a best of breed WMS system, you level the playing field between you and larger competitors.

1. Infor, “Why warehousetech investments are a distributor’s best strategy”
2. Infor, “CloudSuite Distribution, A cloud service designed to empower wholesale distributors to drive innovation and productivity
3. com, “Gain confidence with cloud-based warehouse management”; https://www.infor.com/blog/gain-confidence-with-cloud-based-warehouse-management
4. https://www.bigcommerce.com/articles/ecommerce/inventory-management/