Distribution Challenges - Staying Ahead of the Trends

As a distribution business, your company faces challenges unique to the products you sell. However, no matter how unique your business and no matter how many SKUs you have, many problems continue to present themselves that are continuing to reshape the distribution world.

A recent study by Deloitte found that return on operating capital (ROC) continues to decline, marking a “fundamental shift […] that will both expose and constrain weaker players, while also creating a breakaway opportunity for leaders.”

Bracing for challenges in the industry, many distributors are turning to technology for increased visibility, time savings, and inventory control. Today, we would like to explore three trends in the distribution world and discuss how technology can help you take control.

Increased Competition

The distribution industry is already incredibly competitive, but as 2019 progresses, competition levels will only increase. Competitors will enter new markets, leverage new distribution channels, and try to outpace your business. Add to this such trends as direct-from-manufacturer-to-customer disintermediation, and many distributors are feeling the pressure.

As competition increases, it’s on you to simplify and automate your business processes, taking steps to pivot where needed and capitalize on what you can.

Global Growth Challenges

From a potential economic slowdown to uncertainty in Europe to trade wars in China, growing globally will present a wide range of challenges for distribution firms. Combined with the increased competition, firms will need to take action to shore up their supply chains against the risks that may present themselves.

Understanding the risks that present themselves both internally and externally requires the right levels of visibility. Whether you purchase from international suppliers or sell to international customers, supply chain visibility and currency management will continue to become more important as you fight for growth.

Higher Expectations

As the world changes, customer expectations have as well. Driven by continued evolutions in consumer e-commerce, business buyers now expect similar services from distributors. Add to this the continued growth of Amazon’s B2B platform—Amazon Business—and the pressure increases for distribution firms.

Customer self-service platforms have become one way to make distribution more buyer-friendly, but it also makes it a challenge for distribution firms to maintain visibility into their inventory. To combine the customer focus with the inventory visibility, distributors need to get smart about their business intelligence, ordering, and fulfillment capabilities no matter how many locations they have.

The right technology can help you Gain real-time access to inventory and trends, identify challenges that may pop up before they appear, and empower your sales and facility staff to do more for customers.

Conclusion

In case after case, it is clear that the technology you choose to run systems and processes will put distance between you and your competition, either in a negative or positive direction.

At Milestone Information Solutions, we specialize in delivering Acumatica Cloud ERP for our clients in the distribution industry. Featuring powerful business intelligence functionality, strong integrations, and automation capabilities that increase your speed and visibility, this product is designed to serve your distribution firm now and in the future.

We invite you to learn more about our work with Acumatica, download Distribution System Evaluation Checklist, and contact us for a free consultation.