Throughout 2021, supply chains have slowed, leading to worldwide shortages and affecting consumer patterns. In addition, the distribution industry is constantly under pressure to increase efficiency and reduce costs, while maintaining the health and safety of employees and customers.
So, what are the distribution solutions that can help distributors deal with the unique challenges of the post-pandemic recovery while also increasing revenue by optimizing operations?
The Distribution Industry
Distribution is the heart of the global supply chain. It is the necessary link between producers and consumers, within and across borders. The efficiency of the distribution sector is crucial to ensuring consumers have extensive access to a variety of goods at competitive prices.
Fortunately, distribution presents seemingly endless opportunities for optimization – from sourcing and manufacturing all the way down to delivery to consumers, including warehousing, transportation, storage, packaging, assembly, and a host of other critical supply chain tasks that take place in between.
What is a Supply Chain and How Does it Work?
A supply chain is a network of organizations, people, information, and resources involved in supplying products to consumers. Supply chain activities involve the transformation of natural resources and raw materials into finished products that are delivered to end customers.
Supply chain participants include the following:
- Producers (or manufacturers) make products. This includes companies that produce raw materials and those that produce finished goods.
- Distributors (or wholesalers) take inventory in bulk from producers and deliver a bundle of related product lines to customers. They typically sell in larger quantities to other businesses.
- Retailers stock inventory and sell in smaller quantities to customers in the general public based on demand.
- Customers purchase and use products. A customer may be an organization (a producer or distributor) that purchases products to incorporate into other products that they, in turn, sell to individual customers.
Today, most major companies have supply chains that exist in multiple countries, sometimes on multiple continents.
Challenges Facing the Global Supply Chain
The global nature of modern supply chains creates several challenges. With entities being so spread out, any event that disrupts the supply chain can be catastrophic to operations and put critical customer service obligations at risk.
The past two years have been particularly challenging for the global supply chain for many reasons, but experts say the biggest driver is the ongoing pandemic. In 2020, COVID-19 closed factories, and slowed production worldwide, disrupting the supplies of certain goods. That coincided with a sharp reduction in consumer demand for products, sending economies around the world into a recession.
However, global demand for goods has bounced back quickly, fueled by the rapid development of vaccines, high levels of government assistance, and changed spending habits. The quick rebound in demand has left many businesses struggling to keep up.
On the supply side, problems are compounding, for reasons that go beyond the pandemic. In some cases, the challenge is a lack of metrics required to fuel improvements; in others, it is warehouse management related to order tracking or inventory visibility. Still, others face challenges in communication and workflows. The solution to many of these issues lies in the effective use of technology.
How Utilizing Technology Can Solve Supply Chain Issues
For distributors, efficiency is essential for success. Though businesses work hard to make their operations as efficient as possible, adding the right technology can help them become even more cost-effective.
Here are some ways technology can address supply chain issues:
- Mobile solutions: Mobile technology has turned “ordinary smartphones into powerful business tools that can access different applications to help improve efficiencies, enhance customer service, and increase sales.” Thanks to mobile order entry, for example, sales staff are no longer tied to their cubicles and the sales floor. They can work with customers and businesses directly in the field, promoting a more comprehensive, service-level relationship.
- Purchasing solutions: Automating the procurement process is another way technology helps distribution companies operate more efficiently. Automated purchasing systems can assist them in maximizing cost savings, easing employee engagement, reducing cycle time, minimizing risk, and eliminating transaction disputes. Advanced purchasing tools can be used to forecast demand and predict long-range trends, as well as seasonality, for products.
- Inventory management solutions: This type of technology can help distribution companies track inventory levels, orders, sales, and deliveries while avoiding product overstock and outages. There are several advantages to using a cloud-based inventory management system, including real-time tracking of inventory, reduced hardware expenses, fast deployment, easy integration, enhanced efficiency, and improved coordination.
- Analytics solutions: Distributors are beginning to see the value in advanced analytics to address industry pain points. Analytics software provides organizations with both high-level monitoring that focuses on the overall performance of the company and low-level monitoring that focuses on departmental metrics. These tools can help them identify potential business issues, as well as trends that could lead to business opportunities.
- Customer relationship management (CRM) solutions: Today’s distributors use CRM software as a means to streamline sales processes as well as improve customer service. This type of software comes with monitoring and reporting functionalities that help distributors manage customer information, track product orders, generate invoices/quotes, and automate marketing efforts. The information provided by a CRM tool can be used to build long-lasting relationships.
Ombori Offers a Suite of Distribution Solutions
Ombori offers innovative solutions to address today’s supply chain challenges, and a suite of products that can help distribution companies streamline operations, cut costs and increase revenue.
Using Ombori to Keep Employees and Customers Safe
One of the main concerns across all industries is how to ensure a safe return to the workplace as employees continue to receive the COVID-19 vaccination. As new variants emerge, employers must remain vigilant about occupancy limits, social distancing, and other safety measures.
To assist them in meeting these requirements, distribution companies can implement Ombori People Counter and Occupancy Control. Together, these tools allow users to track the number of people in a physical space and control the opening and closing of entrances based on occupancy levels.
Likewise, distribution companies can protect the safety of their customers by adopting Order Pickup, which allows clients to collect products without entering the distribution center, and Self-Checkout, which allows them to make purchases from a mobile device or laptop.
Using Ombori to Build Partnerships Across the Supply Chain
Ombori products also allow businesses to collect and analyze important data, which can be used to build stronger partnerships across the supply chain. Distributors can see where orders are derived from, where shipments are going, when they are expected to arrive, how many customers are leaving the website with items still in their cart, and more.
Pulling data from point-of-sale systems, people counters, and queue management software, Ombori Grid can present information in an easy-to-read dashboard that business leaders can use to make key decisions. Retail Analytics, the process of providing analytical data on inventory levels, supply chain movement, consumer demand, and sales, provides distributors with the information they need to identify potential problems, forecast trends, address concerns, and reward customer loyalty.
Using Ombori to Assist with Inventory Tracking and Maintenance
Ombori solutions also integrate with inventory management systems, which help distributors track and deliver products. These systems monitor on-hand, allocated and ordered quantities to show actual stock levels. They also show current value and provide historical and trend information for planning purposes. Inventory management software helps balance supply levels so that sufficient quantities are on hand to meet customer needs without investing too much capital or having expired inventory.
By incorporating Ombori services with existing tracking and technology, distribution companies can take inventory management to the next level, increasing both access and accuracy. Inventory Management allows distribution companies to plan for seasonal fluctuations in sales, better manage cash flow, and monitor inventory levels. Likewise, BOPIS (buy online, pickup in-store) allows customers to research products online and see which items are in stock without entering the distribution center.
The Distribution Industry Continues to Evolve
The distribution sector is in a state of continuous evolution as companies seek to bring cutting-edge technology and service to supply chain partners and end customers. Societal disruptions, like those caused by the pandemic, can lead to changes in the way producers and supply chain managers handle distribution networks. However, tech companies continue to be there with solutions for whatever challenges come next in the distribution industry.
Björn is Chief Experience Officer of Ombori Grid. He spent the early part of his career in the music business before moving into retail design and video production. His passion is for creating unique and memorable retail experiences that excite and delight customers. He spent 6 years at Visual Art in Stockholm before joining Ombori in 2018.