Just two decades ago, many of the common supply chain management challenges revolved around pricing or supply and demand miscalculations.
Today, manufacturers and distributors must adapt to new technologies and customer expectations that have reshaped the supply chain industry. In addition to managing inventory and competitive pricing, supply chain managers must add the following customer expectations to their concerns:
- Faster order turnarounds
- Product bundling and discounts
- Improved customer service
- Integrations with quoting software
- Flexible, “real-time” inventory changes
- Payment plans
- Minimizing waste
As a result, the relationship between distributor and customer is changing as global supply chain management evolves.
Supply Chain Disruptors
High standards for accuracy, speed, and financial flexibility stand to become even more stringent. Common disruptors faced by modern distributors include:
- The Amazon Effect: A growing consumer demand for one- or two-day shipping has put significant pressure on distributors to streamline operations.
- Internet of Things (IoT): The increased use of interconnected sensors, smart devices, software, and other equipment to provides fuller visibility and faster operations for shippers and suppliers across the supply chain.
- Big Data: Nearly all supply chain stakeholders are gathering copious amounts of data which can be used to improve forecasting and operations if properly analyzed and applied.
The challenge lies in exceeding the expectations created by these disruptors. Distributors must find ways to offer customers a distinct value proposition in a competitive landscape where many similar providers boast similar advantages. As advanced technologies become ubiquitous, differentiation is only going to become more difficult.
Let’s look at some of the factors supply chain managers are focusing on to meet new customer demands:
Digitization and Automation
The most recent trends in supply chain management center around digitization. The tasks that used to require manual labor can now be completed more quickly and easily with the use of software — which, in turn, is ever-increasingly requiring integration so that all software speaks to each other. This includes:
- Customer Relationship Management (CRM) systems
- Enterprise resource planning (ERP)
- Distributor quoting software
- Sourcing and supplier management software
Technologies that facilitate efficiency, visibility, and interconnectivity will be crucial to the future of the successful distributor.
The B2B landscape now emulates that of B2C, thanks to the growing use of digital outlets like Amazon and Google where an instant, personalized response is expected among consumers.
The Internet has driven demand for highly specific accommodations. Customers expect the ability to select distinct combinations of supplies on their own timeframes, meaning that distributors must adapt their inventory management processes to compensate. This includes:
- Customizable reports to analyze spend
- Customer-specific quotes and orders that can be replicated
- Automated reminders
- Personalized deployments tailored to organizational needs
Emerging Business Models
Combining automation, digitization, and granular services has yielded new business models that alter the supply chain dynamic even further. The supply chain Software-as-a-Service (SaaS) model leverages cloud technology to help distributors expand their services to accommodate more elements of the supply chain. Adopting elements of this model can increase product consistency, support ongoing relationships, and decrease costs.
Predictive analytics is a growing body of data analysis techniques that allow distributors to accurately forecast demand and pricing—sometimes even to the week.
The process uses statistical techniques and machine learning to account for demand and market forces, rendering human estimates almost unnecessary. The more precise these predictions become, the more agile distributors will be in their ability to manage costs and client relationships. Some have speculated that this could even lead to predictive shipping where distribution begins before the customer places an order.
How to Navigate Supply Chain Disruptors
While it’s true that innovations in technology are heightening customer expectations, those technologies also offer improvements to speed, granularity, and efficiency when properly applied. Distributors should focus on finding where and how they can improve their own processes. Broadly speaking, this involves a few critical pieces:
- Integrating planning processes between supply chain partners. Consistency in metrics, communication techniques, and predictive processes can minimize costly errors as a product advances through the supply chain.
- Balancing manual and machine labor. Identifying where machines can enhance human performance will prove key to decreasing lead times and error rates.
- Automating quoting and sourcing processes. Leverage cloud-based solutions to quickly compare and evaluate supplier bids, manage contracts in a central repository, and cutting out time-consuming costs.
In focusing on these three wider categories, distributors can improve the entire flow, from planning to shipping, while minimizing cost and waste.
Supply Chain Management Software
The fastest way for distributors to adapt to industry trends is the adoption of integrated supply chain management software solutions. Customers need to know that their distributors are working hard to meet their unique needs. One of the best ways to establish that rapport is to maintain consistent and accurate expectations throughout the entire distribution process.
Supply chain management software automates much of the estimation process, which makes it easy to establish a customized approach that conforms with pre-defined sourcing rules. With management software, distributors see reductions in costs and lead times while decreasing demands on employees.
Remain at the Forefront of Supply Chain with QStrat
To stay relevant, distributors must closely monitor disruptive supply chain trends and develop quick, effective adaptations to their own offerings. QLM Distributor Quoting lets distributors build and adjust pricing models, communicate with suppliers, and generate actionable analytics—all from the same integrated platform. The result is a reliable framework for every project and every quote.
QStrat has provided advanced quoting, costing, and sourcing software solutions for more than 20 years, improving the ability of distributors to anticipate and meet customer needs. Our advanced Distributor Quoting software is the only package on the market that integrates every element of the quoting process to generate, track, and adjust estimates as circumstances change. This streamlines the sourcing process from the initial quote through delivery.
We offer a free demo and completely custom deployment services to suit your operation. You can also refer to our many customer testimonials, which attest to our record of success in enhancing organizational resilience. Primarily catering to distributors in industrial, medical, automotive, aerospace, and other high-tech industries, we consider our many satisfied clients to be the best indication of the value that we provide.