The subject of supply chain management can be complex to even the seasoned logistics professional. Put simply effective supply chain management is a lot of work, requiring a great deal of experience and demanding agility. Successful supply chain management encompasses a variety of concerns specifically social, environmental and economic and is a balancing act between vendors and customers in aspects of procurement, sourcing, logistics and production. This blog will discuss some of the concerns of the modern distribution company.
Social – Managing customer expectations within modern distribution
Distributors must constantly measure, evaluate and adapt their customer service delivery performance, therefore an agile supply chain must be in operation. Customer preferences evolve and can go in seemingly unpredictable directions, influenced by competitors’ products and services as well as advancements in technology and purchasing behaviour. Loyalties can change fast, and distributors, without a finger on the pulse can be left behind. Your top seller today could become your slowest seller overnight. Without measurement, a single point does not mean a trend.
The internet has changed the face of the logistics market. In 2011 it grew to 11% of the total retail market. Business-to-business (B2B) digital ecosystems drive a fundamental shift in the way companies cooperate and compete with one another. Customers’ expectations have changed when ordering a product; they want to be able to track and trace and change delivery schedules so distributors must be able to fulfil the needs of the ever-changing customer landscape.
Environmental – Modern distribution must consider sustainable business models
As environmental impact is becoming more prevalent in the minds of the consumer, distributors must be seen to be doing their bit in moving towards a sustainable supply chain model. Route optimisation and vehicle loading optimisation can increase efficiencies and save on fuel costs. Distributors can reduce their carbon footprint by implementing reverse logistics to reclaim used packaging, unsold products and end-of-life products to reduce the dependency on landfill and increase the reuse/repair/recycling of products.
At a recent Circular Economy round table event, Simon Ellin from the Recycling Association expands this idea further, “…if we are going to have HS2, it should take lorries. You can charge them x amount per mile, you get off the train, deliver your goods and pick up recycling materials and get on the train back. This cuts carbon from non-renewable fossil fuels, it clears the motorways, cuts maintenance costs on lorries and you invest in your transport hub to move goods rather than people… Anything being driven on the road, why not put them on the train? Most of the distance would be on train and only short trips on the road. This makes savings all round and is good for the environment. ”
Whilst this relies on a modern look at infrastructure, these sustainable practices are a vital part of the supply chain in terms of increasing efficiencies, reducing costs and enabling sustainable modern distribution. In order to develop sustainable practices companies must drive innovation, an ERP system, such as Microsoft Dynamics NAV or Microsoft Dynamics AX, can free employees of time consuming administrative tasks in order to focus more time on sustainable business practices.
Economic – Traceability, accountability and visibility are the keys to success
In problematic trading environments, and as price‐led strategies increase, cost control is a top priority for distributors. Traceability and accountability are vital to monitor the internal economic environment. Internal conditions can be somewhat controlled with appropriate monitoring tools, however distributors must be able to respond appropriately to external economic conditions which are out of their control such as suppliers, stakeholders and the UK economy as a whole. Modern distributors must be kept informed of economic changes and be able to forecast demand patterns and have contingency plans in place.
Best practice in supply chain management requires understanding the whole supply chain not just focusing on how much profit can be generated. Today operations managers must have an understanding of different methodologies, supply performance, regulations, economic concerns and service delivery to name a few.
A business management system such as Prodware Adjust Wholesale Distribution powered by Microsoft Dynamics ERP, helps distributors optimise their performance providing the tools to; buy and sell quickly, communicate with customers and suppliers, and control the flow and exchanges of information throughout the supply chain.
Prodware Adjust Wholesale Distribution covers the key functions of the trading business including purchasing, traceability, quality control, logistics, distribution, exchange, marketing, finance, etc. By promoting collaboration and integration throughout the business, distributors can drive innovation, increase production efficiencies and implement agile go-to-market strategies.
Contact Prodware today to find out more about how our solution can redefine approaches toward innovation, knowledge management, supply chain optimisation, product development, and sales and marketing.