Wholesale distributors occupy a middle position in the supply chain between manufacturers and secondary distributors or retailers for a wide range of durable and non-durable goods, industrial goods, and consumer products. This positioning presents unique challenges to profitability. In today’s competitive global marketplace—where supply networks are becoming increasingly complex and customers demand more choices, faster fulfillment, and lower prices—wholesale distributors often find themselves squeezed from both sides.
Increasingly, satisfying diverse customers means providing custom products and packaging. A growing number of items and SKUs (stock keeping units) can add complexity and cost to inventory management. At the same time, global competition means that retailers can, and do, demand faster service, lower prices, and compliance with requirements such as radio frequency identification (RFID). Finally, companies of all sizes conduct business across international borders, which adds the complexity of dealing with multiple currencies, languages, market expectations, and regulatory requirements. As a result, many wholesale distributors struggle to meet customer needs while still turning a profit.
To survive and thrive in this pressured supply chain position, a wholesale distribution company needs to control already tight margins by increasing efficiency and eliminating waste. Yet many distributors find themselves hindered by manual or disconnected processes, information delays, excess inventory, and purchasing information that’s locked in the minds of individual employees. The good news is that technology can help by integrating processes, streamlining information flows, and providing easy access to the information required for confident decision-making and operational improvement.
Solving the Challenges: How Technology Can Help
An appropriate and integrated business management solution can help wholesale distribution managers optimize operations and enhance profitability by connecting people and processes. Many companies have evolved using separate systems for sales and marketing, purchasing, and invoicing, with limited or no automation for the warehouse. The disadvantages of such disconnects include wasted time, increased risk of error, higher costs, missed opportunities, and unhappy customers.
The right solution can integrate not only customer, order, and financial information but also complex item structures and inventory tracking, warehouse layout and use, pick/pack processes, labeling, shipping, and order tracking. Repetitive tasks or those dependent on successful completion of an upstream process—such as order distribution, generation of picking lists or packing slips, carrier assignment, or customer invoicing—can be automated or batch processed to save time, reduce errors, and focus employee attention on satisfying customers. Investments in inventory can be maximized by improving decisions related to item acquisition, storage, handling, and replenishment. Finally, quick access to and analysis of key business information can increase a company’s success by empowering managers to plan effectively, make smart, informed business decisions, and comply with regulatory or customer mandates ranging from Sarbanes-Oxley to product tracking and recall capabilities.
Yet small and midsized companies can find it difficult to find an attractively priced, end-to-end business management solution that is at once easy to use, fast and easy to implement, readily adapted to meet unique business or industry requirements, and flexible enough to provide a long-term solution as the company grows.
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