Four Trends for Distributors: Facing the Forces of Change

by Thomas Cutler - Date: 2006-11-15 - Word Count: 446 Share This!

The four definitive trends listed in the National Association of Wholesalers-Distributors' publication Facing the Forces of Change are fairly straightforward, although meeting these customer expectations often proves difficult for an unprepared distributor. Learn to successfully cope with these trends is often assisted through the implementing an enterprise resource planning (ERP) software package, which is a critical first step for wholesale distributors.

Founded in 1990 and headquartered in Toledo, Ohio, Technology Group International ( is a proven technology leader delivering Tier 1 application software functionality at a price performance level that can be readily accepted by wholesale distribution organizations of all sizes. A best-of-breed ERP software solution provides the basic footprint for managing the four trends outlined and Enterprise 21 offers functionality well beyond that of the standard distribution package. Enterprise 21 provides full ERP functionality with a fully integrated e-commerce module. It is one of the few ERP systems to meet the needs of today's wholesale distribution without the need for expensive and time consuming modifications.

In Facing the Forces of Change (available at the four trends are detailed:
Customer Self-service: Providing customers with up-to-date technology that allows access to pertinent account information and provides the customer with an avenue to immediately act upon this information as needed. Examples include such functions as: online ordering, online access to product offerings and documentation, interactive product configuration management, and access to inventory levels or order status. Not all ERP systems are equally suited to meet this distribution requirement.

Strategic Sourcing: Leveraging an organization's existing purchasing power to lower product and transportation costs, reduce product lead-times, and streamline the overall purchasing process. In companies with multiple locations, this can easily be achieved by centralizing purchasing, instituting formalized purchasing policies, and automating the purchasing process through the usage of distribution requirements planning or DRP processing. Again, many ERP systems fall short in assessing distribution requirements.

Fee-based Services and Pricing: This concept allows distributors to offer value-added services to differentiate themselves from their competition and improve profitability by providing customers with a service offering they both want and need. The key is to offer products that are backed by exception services which help augment the customer's own profitability and aid in the purchaser reaching their own sourcing objectives. Many ERP systems cannot accommodate the exceptions common in distribution.

Logistics and Fulfillment: As more third-party logistics companies vie for the market share of the wholesale distributor, these old school distributors need to become savvier with their service and fulfillment offering. Simple order to cash processing will no longer appease the average customer; distributors must advance their offering to show exceptional customer focused value. ERP systems must have the capacity to accommodate fulfillment.

Jaclyn Aldrich

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