Bridging the Gap in Wholesale Distribution
Posted by Don Snyder on Tue, Feb 14, 2012 @ 01:58 PM
While the economic landscape has undergone significant changes in the last five years, the challenges facing the wholesale distribution industry seem to have remained fairly consistent. Through my interactions with wholesale distributors on a daily basis, I’m regularly confronted with what seem to be three primary areas of concern: electronic data interchange (EDI), demand planning and warehouse management; all of which go hand-in-hand to running an efficient, cost-effective distribution business.
- EDI While this structured transmission of data between organizations by electronic means seems fairly straight forward – for example, retailers send orders via EDI to distributors where the distributors computer systems capture the information and fulfill the order, tracking all purchasing and inventory data along the way – there are still a few barriers to adopting EDI. Primarily, distributors are challenged when it comes to exchanging point of sale (POS) information with external entities and then integrating that data from assorted retailers back into their internal systems for easy analysis. Thus which leads me to my next point…
- Inventory Demand Planning Distributors need to ensure that all business resources and operations are optimally aligned with demand. Working to demand projections or sales forecasts is a very poor substitute for a single, complete and up-to-date picture of demand. Of utmost importance for distributors should be finding the ability to provide organization-wide access to information that lets managers and supply chain partners make fast, strategic decisions.
- Warehouse Management Proper warehouse management is integral
to the overall supply chain and aims to control the efficient movement and storage of goods within a warehouse. However, in order to compete in the ‘on demand’ world we live in today, distributors need to ensure warehouse management activities are automated and real-time information is accessible on the status of items.
Speed or business velocity determines success in the distribution industry. Poorly integrated systems, reliance on manual processes, or re-keying data already available in one system but not accessible to others is always bad news—a major cause of delays and a common source of errors. Looking at the picture as a whole, it’s clear that all of this hinges on the EDI component mentioned above and the ability of distributors to bridge the gap between retailers and their supply chain.
Today, I’m finding distributors are increasingly interested in gaining the ability to collaborate with retailers and suppliers to achieve their supply chain goals. Having a system in place that enables buyers and suppliers to access critical POS data, leveraging a single source of data, is proven to help increase sales, reduce stock-outs and boost margins.
At BCG Systems, we’re finding that there are a few systems available today that do a fine job of bringing together supply chain partners on a shared platform to make informed inventory decisions. What’s more, along with being responsive to customers, such systems ensure that retailers rely on distributors as trusted trading partners.
Distributors that make doing business easy and enjoyable for suppliers and customers can maintain strong relationships. Distributors whose systems integrate easily with supplier systems gain a cost advantage. Sounds like a win-win to me.
Feel like you’re struggling to connect the dots in your supply chain? Want to learn more about available supply chain solutions and how they’re gaining traction in the wholesale distribution industry today? Contact us to discuss challenges you may be facing or access the recording of a recent webinar where we examined the four biggest challenges facing wholesale distributors.
