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Servicing Increasingly Demanding Customers Within the Distribution Industry
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September 15, 2021 Blog

 

Distribution companies have two reasons to constantly review the business systems they use to automate their processes. The first is that as they grow, operational complexity increases so systems need to adapt also. The second is that the outside world is changing rapidly with the wave of digitalisation and competition from new players, all of whom are using technology to disrupt this space.

To stop themselves from losing customers, distributors are forced to up their game. They are pushed to provide value-added services, ensure stock availability, short delivery times, all while maintaining their flow of operations which consists of juggling multiple products, services and distribution channels. In other words, they must continuously find ways to evolve and improve in order to keep up with rising customer demands.

From ensuring cost-efficient planning to customer satisfaction. Players within the wholesale distribution industry are currently plagued with four key issues that must be addressed to ensure success:

  • Controlling Expenses
    In the end, it is all about the profit margins. What can your company do to ensure a healthy bottom line? Wholesale distributors must always look at ways to reduce operating expenses and COGS. To achieve this, distributors should find ways to reduce IT costs and complexity alongside logistics and inventory management costs. Relying on a cloud-based solution is both cost-effective and productive for the business.
  • Customer Retention
    Major disruptions brought on by digitalisation and increased interconnectivity have made customer retention more challenging than ever. New business models and new competitors, from the likes of internet giants such as Amazon, Alibaba and other non-conventional distributors, are driving heightened competition. Customers are demanding more and more from their suppliers and switching over to alternative product distribution services has never been easier. The time has come for distributors to replace the transaction-focused model with a customer-focused model. One that looks into the wants and needs of your retail and manufacturing customers. These days, data has become a crucial enabler that allows wholesale distributors to know when to replenish stocks without an order to meet expected customer demands or organise sales promotions to reach new customer segments – more on that later.
  • Increasing Revenue
    The goal of any business, in the end, is to increase revenue. As smaller distributors compete with larger competitors and competitors with new innovative business strategies, they must find other ways to increase their revenue. That is why distributors must increase value-added services, be it in the form of warehousing, re-packaging or assembly services – giving them an edge over those unwilling or unable to rise to such challenges. Managing these value-added services also means that your business must transform to run more complex processes.
  • Finding Talent
    To the younger generation, typically, the wholesale distribution industry is not their first choice – which makes attracting and retaining new talent, as the current workforce ages, more challenging. Distributors must find new innovative ways to overcome the lack of experienced talent. Digitalising the business may be the best way to retain business know-how and reduce dependency on experienced employees to perform critical business activities.

The single biggest asset that distribution businesses can leverage to increase operating margins and keep customers happy is data.

The irony is that distribution companies create data across their entire business operations from sales to finance to customer service. However, in many cases, the data exists in silos across various disparate systems and is not consolidated for executives to know their current state of business for pre-emptive measures to be taken to keep the business on its revenue and profit targets.

With the streamlined nature and analytics function of an ERP system, distributors can take on a more predictive approach to managing their businesses. It is no longer viable for distributors to be reactive to the problems that may emerge. Instead, preventative measures must be taken before issues even arise. A McKinsey report states that to survive the current pandemic ecosystem, distributors should leverage the digital and analytical resources available to them to create better demand plans and ensure effective resource allocations.

As the global wholesale landscape goes digital, so too should your business. ISS Data can help you implement solutions to address the issues presented above, with SAP Business ByDesign. SAP Business ByDesign is a complete cloud-based ERP suite that contains fully integrated solutions across all business functions from sales to warehouse management to logistics. Including built-in processes based on best practices within the industry.

It is built for the growth of your business, providing insightful native analytics, which supplies your company with real-time information to track the pulse of your business. Allowing you to make the best decisions for your business and manage costs better.

As your business grows, Business ByDesign can scale to continue to support your evolving demands and adapt as your business expands internationally. For people on the go, the solutions are innovative as Business ByDesign has created a comprehensive set of mobile applications.

ISS Data, Singapore’s leading solution provider of SAP Business ByDesign, can provide the necessary solutions for your business to overcome these issues. With the help of ISS Data, companies undergo a business transformation, becoming nimbler to ensure profitability, resiliency, and sustainability—reducing your dependency on labour-intensive processes.

 

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