5 CHALLENGES DISTRIBUTION COMPANIES FACE

The distribution industry is transforming on a massive scale because of recent advancements in technologies such as machine learning and predictive analytics.

In order to remain competitive and ahead of the pack, distribution companies will need to adapt and incorporate new technologies into their business. 

Customers want access to information about their orders and shipping updates in real time. They demand that their orders are always shipped and received on time, and that they are kept in the loop for the entire process. 

In order for companies in the distribution industry to meet the growing demands of their customers, they will have to adopt Cloud Enterprise Resource Planning (ERP) software.

5 Common Challenges in the Distribution Industry

The distribution industry is highly competitive. In order to succeed in this industry, your company has to perform at a high level. To do that, you will have to overcome these 5 challenges. 

Inventory Management

One of the largest challenges faced by companies in the distribution industry is inventory management.

Traditionally, distribution companies would manually perform routine checks of inventory in order to determine the cost, quantity, and quality of inventory before every order. These routine inventory checks would be recorded manually and the information would be input into a spreadsheet or other platform. 

When inventory is recorded with pen and paper, there is room for human error. 

As a result, inventory will oftentimes be overstocked, resulting in higher costs of warehousing. Or, inventory will be understocked, resulting in customer backorders and delays.

Oftentimes, inventory is miscalculated when employees keep track but with cloud ERP, it is accurate and provides data in real time.  

Meeting Demand

In the modernized business world, companies in the distribution industry often struggle to meet customer demand.

Customers, such as wholesalers and retailers engaged in e-commerce, must cut their costs in order to remain viable in their respective industries. In turn, distribution companies must reduce their own costs in order to be competitive in their own industry.

Distributors can reduce their costs by improving the efficiency of their operations. One of the ways distributors can improve efficiency is by enabling the entire company, as well as partners in the supply chain, to have access to accurate, real-time information about the business. 

Cloud ERP software allows your entire company to have all of this data at their fingertips. 

The accurate, real-time information provided by ERP software solutions allows business decisions to be made more rapidly and intelligently than could be made without the aid of ERP software.

Competition 

Companies that want to remain competitive in the distribution industry should invest in an ERP software solution.

Among other advantages, distribution companies that use ERP software solutions are able to collect and track more valuable business data than companies that do not use ERP software. With this data, companies using ERP are better able to understand where shortfalls are occurring in their operations and how those shortfalls can be remedied or improved upon.

Complex Supply Chain Networks

As the purchasing behavior of businesses and consumers change, so does the complexity of distribution supply chain networks.

No longer is it satisfactory to give purchasers estimated delivery date windows. They want to know exact delivery dates, and often even exact delivery times, in order to accommodate their own logistical setups and requirements.

ERP software makes it possible for distributors to give purchasers the exact information they need.

Since ERP gives distribution companies the ability to share information more easily across the entire organization, customer purchases quickly go from sale to shipment. And, by analyzing historical data, distribution companies are better able to predict when customer purchases will be delivered and share that information with purchasers.

E-commerce

The rise in e-commerce compounds the difficulties created by the increasing complexity of the distribution supply chain.

Manufacturers that engage in e-commerce are, more and more, avoiding the use of wholesalers. Consequently, distributors now have to be prepared to fulfill purchases not just from a handful of wholesalers, but also direct purchases from many businesses and consumers.

How to Overcome Challenges and Scale Your Distribution Business

Not only do you have to overcome these challenges of working in the distribution industry, you have to do so better than your competitors. One way to gain a competitive advantage is to adopt new software, like cloud ERP software, to increase performance. 

ERP software provides you with the data you need to streamline operations while becoming more efficient. One of the best features of ERP software is its cloud accessibility. Cloud ERP software can be accessed from anywhere, as long as you have internet connection, allowing users to make faster and more precise decisions. 

The distribution and manufacturing industries have a reputation of being the last industries to adopt new technology. Don’t get left behind, lead the pack. 

At ACC Software Solutions, we specialize in implementing Cloud ERP software tailored to distribution companies. We have successfully implemented ERP software for many distribution companies and we can do it for you! 

To request a demo or learn more about the benefits of Cloud ERP Software, contact us today!