3 Challenges Facing Modern Distributors
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3 Challenges Facing Modern Distributors

4/6/2016

In a recent survey sponsored by Epicor, MORAR Consulting found 58 percent of businesses reported growth in 2015 and nearly 70 percent expect to grow in 2016 – but only 11 percent experienced growth totally in line with their plans in 2015

This begs the question – why? Distributors need business systems that keep their businesses healthy and thriving in the face of change – solutions that empower them to grow and adapt into the future – and many find their old ERP software won’t deliver the capabilities they need as they continue to evolve.   

Anticipating challenges, and having the tools in place to overcome them, is sometimes the single most important way to ensure your organization is positioned for success. Read on for three obstacles facing nearly all distributors and how to help address them with modern technology. 

Changing Relationships

All businesses must remain competitive while increasing efficiency – or simply put, all of us are trying to do more with less. In distribution that means many business processes have become automated, and high levels of process automation are changing the relationship between suppliers and customers.  

You can set your distribution business apart from the competition and solidify customer relationships with specific, customized services and pricing, customized quotes and contracts, specialized assembly and kitting services, and vendor-managed inventory. A modern ERP solution should offer these features and more. 

In fact, many business relationships have become more integrated in recent years as both customers and suppliers are driven to link their automated processes together. While tighter integration can be an advantage against competitors, it is also less tolerant of errors, requiring robust processes and well-trained support personnel.3 Challenges Facing Modern Distributors

Employee Retention 

Speaking of personnel, finding and keeping qualified staff is one of the most challenging tasks for any business; at the same time, specialization and industry consolidation have necessitated a reliance on hard-to-find skills for distributors. Fewer and fewer people have the skills and experience for any particular job, so it has become mission-critical to train and retain your best employees. 

Obviously a lot can be said on this subject, and the influence of compensation and management styles cannot be overstated. However, in distribution organizations, many potentially great employees struggle with complex ERP systems or become frustrated with their lack of features, like on-the-go mobile access. This is especially true for the millennial generation. Investing in technology that today’s workforce expects is too often overlooked as a viable strategy for retention. 

Look for solutions that reflect what your employees experience in their personal lives. The solutions you have in place should be both user-friendly intuitive, even – and allow your staff to work on the go. A built-in CRM capability is the icing on the cake. These features empower employees to succeed in their jobs while saving time, reducing stress, and improving satisfaction and engagement in their roles.

Customer Expectations 

Last but not least, in a world run seemingly run on iPhones and Amazon, it’s no surprise that today’s customer expects everything faster, cheaper, and better. More recently, this desire for instant gratification has found its way into the B2B sector, and most distributors recognize they have no choice but to keep up.

In this case, the solution is quite clear – the best way to meet your customers’ expectations is with an eCommerce website solution that simplifies both browsing and purchasing; it’s no longer enough to have static presence on the web. 

Think of your online storefront as a digital calling card, introducing your core values, products, and services to both current accounts and prospective customers of tomorrow. Your solution should act as a vehicle to attract new business while making it easier to service existing accounts. Obviously, it must also integrate seamlessly with the rest of your business. 

They say the only constant is change, and that statement certainly holds true for the modern distributor. In the past several years, distribution professionals have seen their markets, products, and customers change seemingly overnight. 

On the one hand, transformations like these present new challenges; on the other, when addressed properly, these changes also offer new opportunities for growth. 

Looking for more insights on growth in distribution? Check out Epicor’s whitepaper on Growing a Modern, Integrated Distribution Business

Posted by Michael Lovelace, Director of Business Development, Distribution Group

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