Distributors with all the right moves October 9, 2009
Posted by Meg Sewell in Actionable Intelligence, Business Community Management, Inovis Solutions, Supply Chain Visibility, outsourcing services.Tags: B2B Outsourcing, conveyance, cross docking, distributors, Infor, material handling, packing, picking, receiving, shipping, slotting, the Economy, workforce management
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Over on the Infor blog, Gary Rippen has published a great post entitled, “So the Economy is Down; What Distributors Should Do to Prepare for Recovery.” In his article, Rippen makes the great point that savvy distributors can take advantage of the tough economy by using the lull in activity to identify ways to do business better.
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By using this time to seek out new growth strategies and identify ways to implement new processes, distributors can add value and build the business up so that when the market starts to come back around, the company will be positioned for success and working with that momentum. Gary also points out that the distribution industry is full of moving parts, with a large number of business processes that can be examined for fine-tuning. His recommendation? Evaluate your current software as well as potential new software tools that can optimize performance in such areas as shipping, receiving, material handling, conveyance, picking, packing, slotting, cross-docking, and workforce management techniques.
Gary Rippen also provides these five suggestions for distribution companies:
- Determine which products are ordered most frequently – While this may sound pretty simple, clear visibility into high-order products can enable companies to recognize the DC so that those products are located closest to the shipping areas. Over time, the added efficiency of pickers will really pay off.
- Examine automation needs - Implementing wireless, barcoding and RFID technology can greatly improve the performance of the warehouse and speed order to customers.
- Expand to the Internet - Not only can e-Commerce open up new revenue streams, but integrating a website with an existing ERP solution can enable real-time visibility into stock levels and order status for existing customers.
- Get a hold of inventory levels – Tools exist that can help distributors determine the right level of inventory to meet customer demand without the expense of maintaining excess products.
- Consider outsourcing – It may not be necessary, but some distributors stand to save a lot of money by outsourcing certain tasks to other companies.
In sum, by utilizing effective technology and focusing on methods to improve business performance, distributors can deal with complex issues while managing the bottom line during downtime, and emerge from the recession new, improved and ahead of competitors.
What items would you add to this list?
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Based on my conversations with both suppliers as well as distributors – collaboration should be high up on his list. Focusing more on BPI over vendor compliance is an opportunity for distributors to collaborate at a higher level with suppliers who have proven themselves to be solid compliant partners over the years.
‘Determining which items are ordered most frequently’, ‘get a hold of inventory levels’, and ‘consider outsourcing’ could all be considered components of a VMI, SBT or other more highly developed and collaborative replenishment flavors. Certainly “automation needs” – regardless of the method (sensor, barcode or otherwise) will require help, support and (We would certainly see) collaboration with the vendor in this area as well.
The retail vertical has spent the last decade focusing on vendor compliance and looking for ‘visibility’. We believe the distributors who are most successful in BPI initiatives during the downturn will be the ones who collaborate the most effectively with their vendors NOW.
Jim, you make a great point. Collaboration is extremely important, especially given today’s market. After all, you are only as efficient as your trading community.
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