Lindsay Konzak, editor of Modern Distribution Management’s management and strategy blog, recently posted four trends in distribution from the publication’s 2011 Distributor Landscape Report. She elaborated on these findings in an interview with John Sonnhalter in the blog Tradesmen Insight.
- Customers want more.
Nearly all distributors said they are seeing an increase in demand for services. Customers who have pared back staff and resources in response to the recession want distributors to do more for them. The challenge is that many end-users want that increase in service in return for very little or for free.
- Inventory management continues to be a priority.
Despite demand growing quite quickly in some sectors post-recession, distributors and manufacturers have been reluctant to increase inventories at the same pace. Instead, many have increased their focus on forecasting: determining when and what to buy.
- There is a reluctance to hire again.
Distributors are taking advantage of process improvement tools to shave costs and waste from internal processes. Smart distributors and manufacturers are working closely to do this, recognizing that there is opportunity to improve profitability up and down the supply chain. Many are also including key end-users in evaluation processes; they recognize that they not only provide a service for the end-user, but costs can be incurred at the end-user level that affect the entire supply chain. A more granular understanding of processes across the extended enterprise is key.
- They have a focus on diversification.
More distributors of all sizes say they recognize the need to prioritize diversiﬁcation into new markets or product types to buffer their companies from the ups and downs of business cycles.
All these trends point to the renewed pressure distributors are facing in these tough economic times, as well as the heightened importance of business communications and resource planning in successfully running a distributorship. In this environment, the quality of distribution business software is critical.
Epicor believes that not all distribution software is created equal. Choosing the best distribution software can provides the right tools to efficiently plan, assemble, ship, and deliver the goods customers want, when they want them. Choosing the wrong warehouse and distribution software might result in not meeting customer’s needs and losing key opportunities to increase supply chain performance.
Posted by the Epicor Social Media Team