Distribution software trends: Distributors shift technology lanes
Focus trends toward solutions that help companies run their businesses more efficiently and profitably in the long-term.
Epicor Senior Product Marketing Manager Tony Corley has seen a bit of shift in the focus of the software company’s distribution customers.
“More and more are looking to focus on their business instead of IT by looking for cloud or hosted solutions,” he says. “Doing so eliminates the time and effort of software upgrades and allows distributors to scale/grow dramatically faster.”
Corley adds he sees Epicor customers morphing toward solutions that will help with process improvement, integration with outside systems, electronic ordering (via eCommerce or EDI) or products such as AutoOrder that convert customer purchase orders into electronic orders.”
He’s also seen one additional shift in the market over the last year. “We’ve seen customers looking for tools to help manage or optimize margin,” Corley says. “In the past, most margin optimization tools only focused on improving list-less pricing, but now distributors are looking for tools to assist with the cost-plus portion of their business.”
TruCommerce Director of Sales Tom Hoar notes he is seeing distributors reacting more swiftly to a fast-moving supply chain and aggressive pricing landscape thanks to companies such as Amazon and the swift adoption of companies selling online.
“Their customers expect higher service levels, and the progressive wholesalers continue to look for ways to keep pace,” he says. “Wholesalers have a more committed focus on accurately stocked inventory to support their value-added solutions and services. Top challenges for wholesalers include clean purchase-order data, and improving supply-chain effectiveness. Higher in-stock positions and a wider product breadth are two key elements to help meet these challenges. We see an industry push where wholesalers are leaning on their strategic suppliers.”
Hoar says suppliers are helping improve project transitions, new product introductions and overall assortment in-stock levels through initiatives such as VMI or vendor-managed inventory. “Collaboration tools such as VMI allow wholesalers to reduce buying time while improving inventory and customer-performance metrics. All of this happens by embracing technology,” he notes.
NetSuite’s Kristin Swenson sees suppliers and customers demanding more insight and visibility into supply chains. “There is a much greater reliance or expectation for software to help automate supply-chain processes,” she explains. “Especially in light of today’s escalating trade wars, many organizations are looking for alternative options to protect themselves from volatility. Companies need the ability to see supplier performance and ratings along with pricing.”
Unilog Senior Vice President of Marketing Scott Frymire says unified commerce demands greater control over the flow of product data and content across front- and back-end systems. “A couple years ago, many distributors weren’t familiar with the concept of PIM or product information manager and how it benefits online selling,” he says. “Now they are better educated, and in many cases, demanding this capability as part of their digital transformation.”
> TruCommerce’s Tom Hoar’s says distributors looking to jump Into technology upgrades may want to start Internal steering teams. “It gives them the ability to stay on top of Issues and not hide from them,” he says. Photo courtesy of TruCommerce.
Frymire says the biggest shift he’s seen of late in the digital transformation process is a greater sense of urgency. “For distributors, the most significant change I’ve seen in the past year is an understanding of how critical it is to have a better way to manage product content,” he says. “Relying on the limitations of ERP product files is not enough when selling via a digital branch or online marketplace.”
Frymire feels the real change in the industry hasn’t been technology itself, but how supply chain and distribution companies are thinking about its applications. “Technology is no longer the domain of IT,” he says. “I’m seeing more engagement among leadership at distributors as they try to figure out how to adapt their business models to leverage emerging tech such as IoT and Blockchain. That’s a dramatic switch from only a year ago.”
Corley says his advice to a company that may be at the beginning of its digital upgrade is to embrace the fact change is continual. “It’s not something you do once a year or once every few years,” he says. “You need to foster an environment in your company where change is the norm. Build a scalable, repeatable process based on change. Create a process improvement team that’s cross-functional. Include members from all your departments and meet on a regular basis, perhaps once a month, and evaluate your business and processes looking for areas of improvement. Don’t just look internally. Sometimes you don’t know what you don’t know. Do some research to see what tools and technology are out there and how/if you can leverage them in your business.”
Hoar suggests starting internal steering teams to address topics such as data, VMI, supplier portals, EDI, e-commerce and supply-chain delivery. “It gives them the ability to stay on top of issues and not hide from them,” he said. “It builds more corporate support in these complex areas. Reach out to industry respected service providers for help. Companies don’t need to be the experts anymore. Qualified and knowledgeable service providers will be true partners in your business.”
Frymire cautions not embracing technology changes and trends could have severe consequence in today’s marketplace. “I once heard a wise person say the sole job of a CEO is to make sure everyone else in the company has a job five years from now,” he says. “As a business leader, if you’re not embracing technology and the change that comes with it, you are putting your employees and revenue at risk. It may sound overly dramatic, but it’s true. Every day, week, month or year you procrastinate embracing the potential of technology, you slip further behind competition that looks to steal your customers and market share. Embracing technology is all about future relevancy.”
NetSuite’s Swenson agrees it’s all about the long-term view. “Companies need to respond to today’s changing competitive landscape as well as keep pace with modern technology or they risk becoming obsolete,” she says. “Now is the time to invest in a scalable software solution that will position you for long-term success, not just short-term survival.”