The world of B2B distribution is undergoing fundamental change, and distributors must rise to the occasion. Today’s procurement professionals expect a consumer-like experience, gravitating toward shopping portals that offer products from many vendors, allow the luxury of small quantity orders, and provide overnight delivery. At the same time, the key commercial players are invading each other’s sales channels. Distributors are bypassing retailers to sell direct to consumers; manufacturers are bypassing distributors to sell direct to retailers; retailers are creating their own brands and selling through distributors. 

Distributors must meet the needs of a more demanding and diverse customer pool by undertaking a complete digital transformation of their legacy order, warehouse, and enterprise management systems. Sales channels must go beyond a single website to include a presence on multiple aggregator portals. Order management systems must be able to traffic orders from multiple sources while recognizing customer-specific pricing patterns. Warehouse management systems must be reengineered to process small orders quickly, and automation must be increased to reduce the deleterious bottom-line effects of higher handling costs. The physical plant must be recast, transforming the traditional single large distribution center serving customers everywhere into a network of distributed smaller operations that deliver goods more quickly to customers and replenish automatically. They must also share inventory efficiently, eliminating the occurrence of stockouts that can drive demanding customers to competitors. The customer who has been served by a single DC in the past may now receive goods from a number of branches that share inventory.

While a complete digitalization of a distributor’s operations will require a significant investment in time and money, instituting best practices throughout the company’s supply chain will obviate costly and ineffective manual interventions now required to iron out the kinks in a company’s outmoded order and fulfillment system.

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