The purpose of any supply chain is to get materials from the point of origin to the place of need as quickly and inefficiently as possible. In today's market — now pockmarked by erratic supply chain disruptions — fulfillment is easier said than done. Distributors large and small feel mounting pressure to perform under capricious economic conditions.
While there is no quick fix, understanding the driving forces and taking a more proactive approach can ensure fulfillment continuity. However, doing so is virtually impossible without tools and automation technologies that provide a more granular level of visibility into customer needs and market trends. Automation in manufacturing can help be the driving force to lift some of the burden felt by many distributors across the globe.
Top Distributor Challenges:
1. Unpredictable Consumer Demand Trends
Traditionally, organizations got away with loose forecasting and just-in-time (JIT) inventory management to match production to consumer demands. Ever since the pandemic, demand trends have become far too unpredictable. According to a recent report by Instawork, 60% of industrial businesses struggled to keep up with increased demand last year. Over the last 12 months, 58% reported additional demand increases.
2. Upstream Supply Issues
Manufacturers are struggling with the same product and shipping delays as consumers. Without the equipment and materials needed to ramp up production, consumer demand will continue to outpace delivery, leaving few distribution companies with the connections or sourcing capabilities to consistently meet customer fulfillment.
3. Labor Shortages
In warehouses, 73% of operators can’t find enough workers (Instawork). On the road, the American Trucker Association estimates needing more than 160,000 drivers to meet current demand increases by 2030. The downstream labor deficit contributes to inventory shortages for retailers and prevents manufacturers from getting the materials needed to meet production demands.
4. Rising Fuel Costs
At a record high of six dollars per gallon in some regions, transportation and freight costs are soaring to astronomical heights, leaving distributors with a tough decision to make — operate at a loss or pass the buck to customers who are also struggling with prices at the pump.
To address these challenges, distributors will need access to robust market insights, pricing visibility, better inventory allocation, and out-of-the-box ways to costs saving. Having a diverse fulfillment network is an important part of the equation, but key partnerships are only a part of the overarching manufacturing strategy required to meet challenges head-on. In addition to diverse supply chain networks, distributors must accelerate digital transformation efforts to make data a core driver of business processes.
Benefits of Automation in Procurement Technologies
Manufacturers and distributors aren’t the only ones feeling the business pressures of supply chain disruption. Their customers in the healthcare, commercial, and hospitality industries also realize the dire need for procurement solutions that eliminate inefficiencies and improve agility. Rather than defaulting to price-shopping, which can jeopardize product quality, inventory levels, and the customer experience, forward-thinking procurement leaders are prioritizing technologies that automate data and empower them to extract more value from the sourcing process itself (not just the end result).
Optimization Through Data Automation in Manufacturing
Not all procurement optimization platforms are created equal, especially when it comes to converting inputted data into high-value insights. First and foremost, production automation solutions must offer an omnichannel shopping experience to meet customers where decisions take place. In today’s post-pandemic business world, that could be anywhere. More importantly, enterprise customers need solutions that are advanced enough to automate decisions based on a complex assortment of business needs and priorities.
Data Beyond the Customer Experience
The value of data automation in procurement reaches far beyond the customer experience; it can also serve as a powerful sales and consulting tool for distributors. When leveraged to its fullest, data-driven procurement solutions act as a consulting tool for sales reps, giving them the power to conduct independent market analysis, identify brand/category trends, realize market placement and opportunities, and tap into micro-businesses or new consumer markets.
From an operations standpoint, automation in manufacturing also helps distributors build predictive models to forecast demand with greater accuracy, and context. Machine learning offers procurement teams visibility on how to optimize category management, prevent overstocking, support inventory transparency, and improve fulfillment capabilities.
The Most Robust Procurement & Consulting Tool
AFFLINK’s free consulting software, ELEVATE, is the only data-powered procurement technology capable of translating your customer’s spatial, operational, and marketplace data into product recommendations that align with pre-defined, industry-specific business priorities.
For customers, this means a more effective way to:
- Maintain inventory
- Meet business objectives
- Improve utilization and efficiency
- Eliminate waste
- Control costs
For sales reps, this means gaining the intelligence to:
- Uncover what’s important to the client.
- Pinpoint exact quantities needed
- Identify the best quality-to-cost ratio
- Implement value-based selling
- Increase top-line sales
In short, AFFLINK’s goal is to help distributors better understand their respective markets and customers so that they can sell differently in a way that benefits upstream partnerships and downstream customers. Introducing the power of automation in distribution as an asset to better understand their market, procurement function, and manufacturing process.
Learn more about how we help distributors meet consumer demands, ensure fulfillment continuity, and source products that few others can.