The past couple of years have been extraordinary times. The impact of the global pandemic, Brexit in the UK and global instabilities continue to cause supply chain volatility and disruptions. These supply chain disruptions have resulted in the need for highly agile organisations that are responsive to ever-changing market needs.
In a competitive industry like distribution, survival of the fittest is key. Today’s distributors must evolve, become more productive, and efficient and build stronger, more satisfactory experiences for customers. Distribution has always been about building and maintaining customer relationships, but digital disruption has changed the landscape. Now, the market for wholesale distribution is transforming and there’s an urgency to maximise supply chain performance and deliver an improved customer experience.
Today, empowered customers can purchase goods across multiple channels and they demand personalised and customised products, pricing flexibility and little tolerance for delays in goods. The omnichannel model (a multichannel approach that provides customers with a seamless shopping experience, whether they’re shopping online, by phone, or in a store) means that the power now rests with buyers as switching distributors is now much simpler.
Indeed, with changes in the way that data is now used, traditional channels of distribution may have been made obsolete. Distributors today face more challenging and complex fulfilment requirements, such as the need to manage their traditional B2B business together with an eCommerce website. Below are six critical challenges facing distributors today.
1. A lack of executive understanding
Digital transformation requires a top-down approach and buy-in from leadership. Leaders need to demonstrate commitment and an understanding of how technology can improve the business. Distributors must seek out training or new technical experts to fill the knowledge gap.
2. Existing silos
Distributors are often separated into departments with their objectives. However, today this is a dynamic that causes problems. Digital transformation requires collaboration between departments that can’t happen in silos.
3. Legacy applications
Distributors may be dependent on legacy technology for their day-to-day business. However, they need to build new digital transformational systems in parallel with these legacy systems, taking advantage of historic data that could be extremely valuable going forward.
4. Data without context
Data without context is not useful. Distributors can generate huge amounts of data, but with no context and the means to identify what needs attention, it becomes meaningless. There is a need for concerted efforts in making sure trained people are leveraging and interpreting the data.
5. A lack of ownership of customer outcomes
Distributor leaders must have a vision and strategic plan in place, where results and continuous improvement are achievable. Leaders must take ownership, or there is limited forward progress, and the rest of the business isn’t inspired.
6. Misaligned metrics
Successful digital transformation requires alignment on key metrics such as customer satisfaction and value delivery. There needs to be measurement where every part of the business can see its role reflected in the value chain.
The above challenges are just a few examples of the many and sometimes complex requirements the distribution industry needs to manage to drive growth in their businesses.
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