Distribution

The above visual shows the complexity involved in managing a collaborative Supply Chain.

Collaboration today is severely limited without the correct digital tools that allow for vision, implementation, strategizing, flexibility and change.

Steps to building a successful collaborative model.

Priority 1 – get close to your customers

1. Find out what is important to them, why they buy from you, and how can you make it easier for them to grow their business with you.

Priority 2 – get close to your vendors

1. Same as above except for the vendor side. Understand why you are buying from them, how can you make doing business with them easier, how can you grow your foot print and level of importance for your shared success.

Priority 3 - Build your supply chain based on the information gathered from your customers and partners. Build innovation teams and include your supply chain partners. Start small and work your way up.

Priority 4 – build flexibility into your processes to reflect customer/vendor preference changes as quickly as possible across your supply chain.

Priority 5 – be creative and forward thinking – reimagine your supply chain on a regular basis and keep asking yourself – “Just Imagine if…” (apply no limits on a first pass and then re-invent on following passes).

Priority 6 – continuous reiterative process beginning back with priority 1 and following through repeatedly

Priority 7– never ending process with resulting specific task completions dates after each review as part of the overall process that include your vendors and customers. This is not only an internal project!

Are you equipped to perform the above? Do you have the tools? Do you have the right employees? Do you have the right customers? Do you have the right vendors? Are you listening to your supply chain partners at all levels?

The above graphics are an accurate representation of typical CPG Supply Chains focusing on different daily functions performed in an active supply chain environment.

How can you manage all these fast-moving parts, none of which can be accurately predicted, over a pre-determined time period? The only standard in any supply chain as complex as those applicable to the CPG industry is change! So how do you manage this constant change and provide the services your partners expect?

How do you execute on the 7 priorities listed above for true collaboration and still manage your business?

In recent times, technology has impacted the way people communicate, work and live in the world. Apart from digitally enabled sectors such as IT and BFSI, agriculture, CPG, and food processing, Distribution and supply chain operations are also on the road to digital transformation. Further, complete digital disruption has led to changes in the way businesses are functioning.

Using data with superior intelligence is the measure for running Distribution exceptionally well today. It is only with digital enablement, that copious amounts of data generated from customers, partners, and business can help with streamlining of business operations. Complexities in Distribution is now ascertaining the need for digitization, as the efficiency of distribution today affects top-line growth as well.

To postulate this, a study by Deloitte showed that around 80% of organizations with excellent Distribution capabilities rank above average in growth per se, as compared with 8% of those with lower Distribution competence that are reflecting below average revenue growth.

The benefits of digitization for Distribution include shorter lead times, reduced complexity and faster functionality of overall operations. These add to the effectiveness of Distribution operations and consequently to the organization’s performance, drawing a clear result between output and outcome.

The following trends are a clear indication as to the criticality of digitization for Distribution networks:

1. Supply networks that are global – While operations are increasingly being spread worldwide, data and information requirements are bound to be on the rise too. Each city, or each country have their own indigenous systems and domestic quirks as to the quick pace of paperwork being conducted, and how for instance, loading and unloading is done. Real-time data on port traffic or weather conditions play a significant role in planning. Further, insights based on this data are crucial for optimum planning, which can lead to an efficient global Distribution network.
2. Dynamic milieu and automation - Real-time decision making requires voluminous data, and automation in such circs becomes more important. Since we are living in an age where we are hyper-connected, meaning we can have access to different kinds of info, this can help in planning a more responsive and robust distribution. While goods are increasingly getting commoditized, there is a parallel increase in service quality and delivery. Similarly, real-time info on stock availability, status in shipping, updates in pricing, regulations, etc., can boost service quality.
   
   As the whole world becomes more connected and intelligent, order visibility and views of inventory, etc., becomes super important for different parties involved, be it, customers, suppliers or distributors.
3. Smart goods – With superior intelligence built-in, all components of Distribution are connected today. All products or even individual boxes can have smart tags that permit us to track their location as well as storage conditions (such as, humidity, temperature, pressure, etc). Collecting such data points will ensure the product is in prime condition but will also help settle disputes, in case of spoilage.

An un-fragmented approach, where participants are collectively looked at is the best way for superior Distribution. An able platform that ropes in customers, and suppliers bringing that onto the same page is the only solution for achieving this.

Take a peek at our Modern Distribution and view the case studies on how some of our customers nailed digitization with our help: https://www.sonata-software.com/ip/industry-platforms/modern-distribution

Whenever I speak with wholesale and industrial distributors, I’m almost always asked to provide assistance in improving their productivity.

Nonetheless, when I ask the next question as to what they have done to achieve it so far, an immediate response follows, which is – initiatives have been taken only to the level of operational functionality in warehouses with TMS and WMS approaches.

This is not incorrect and there usually is improvement in productivity using appropriate tools available from analytics, to improved inventory management, to mobility, and transportation management with a revision in workflows that have also been simplified.

However, this is only a part of the potential underlying the opportunity to increase your (distributors’) productivity.

Before any kind of transaction reaches business operational areas, there is plenty of work required to get it there as much as there is to pick, pack or ship.

Here are some areas that need consideration:

• Product catalog or website:
• Is your product catalog up to date with the latest product lines you carry?
• An outdated product catalog could prove very dear in terms of number of sales, for companion/additional products on the order because the customer usually doesn’t prefer to place multiple orders, (chiefly to different vendors) to meet the demand required
• Lengthier order processes to correct or avoid errors
• A significant amount of time on the phone to explain changes to customers
• Having to procure a particular item you don’t carry to satisfy a customer
• Pricing
• Is your pricing current?
• Are all vendor and customer rebates included in your pricing?
• Is all the current pricing information held in a system, providing the apt pricing at order entry and which doesn’t require a group of employees to check orders for pricing to avoid errors or customer dissatisfaction?
• Are your prices supporting margin expectations?
• Accounting
• Are you accumulating all vendor rebates as is agreed (timing and dollar amt)?
• Are you paying all customer rebates as is agreed?
• Are your invoices containing the correct amount the first time?
• Are supporting documents provided to both vendors and customers automatically?

Of course, what is listed above is limited and there are a multitude of areas where customer satisfaction and productivity can be improved.

Using the appropriate digital platform allows you to completely improve productivity across your Company – and not only your operation processes. The pertinent software system improves it overall and will apply the “ultimate” approach to ensure that the rules you have negotiated are respected and applied – with regard to pricing, rebates, product catalogs and more. The correct system will be adaptable enough to allow for improved productivity any which way in your process, improve customer experience and manage margins as soon as today, and far better tomorrow.

With Omni-Channel’s having become the ‘blitzword’ today, consumer Companies no longer consider the following operation a challenge, but a solution, i.e., Supply Chain. McKinsey raised the question as to how many organizations had a clear-cut approach with regard to omni-channel; about 80 per cent said that they were trying to make progress in that direction, with 20 per cent who considered themselves to be on the right side of it.

It is true that the feat of building adept supply chain capabilities may be herculean, but winning with omni-channel for world-leading CPG players is actually a few skips away. Here are the insider’s secrets:

1. Multi-directional collaboration – The phrase of ‘omni-channel supply chain’ might be better had by the nomenclature of ‘omni-functionality.’ Looking at its business functions and operations, an organization that conducts everything from an integrated perspective, by, for eg., setting up cross-functional teams, with the onset of the omni-channel journey through the defining incident to implementation – which are the teams who are given resources with authority who can be decision makers to drive progress. The functions so represented, are inclusive of marketing, IT, supply chain finance, customer service, brick and mortar store operations, and e- Commerce.
2. Omni-channel know-how – The second best-have is a go-to-market and service agenda, which outlines which channels the Company ought to serve, and what they want to offer to their customers online, in their own brick-and-mortar stores, or to wholesale and/or retail customers. The course that the Company charts out needs to be defined in such a way that every channel, product category, customer group, and location carries their bearing which sounds out the Company’s USP, enabling the desired integrated approach to serve customers better.
3. Supply chain grid – The third must-have for omni-channel fruition, is an optimized supply chain network/grid. Getting the right kind of support requires a Company to laterally conceptualize the outcome of positioning inventory or the uniqueness of product delivery by personalizing even their flow from the factory to reaching its customers. Deciding who the chosen partners would be, how they would run the show and which other organizations that should be partnered with, will help in strengthening the grid and aid in meeting service levels, decrease distribution costs, and maximize profitability.
4. Consumer and product flow analysis – Consumer and product flow analytics include certain elements, such as comprehending cost-serve expenses for various service levels. These can be combined with a proliferation of benefits that accompany it (consumer and product flow analytics). It also helps in a deeper understanding of underlying drivers in consumers’ behavior, which translates into novelty in demand (demand shaping) as well as dynamic pricing.
5. Flexible transition plan – Implementations have got to be malleable when it comes to new segmented supply chains. The approach and mindset has to be different each time, as frequent changes and rapid adjustments in the world of omni-channel requires the project implemented (with change management) to be iterative, contemporary, yet traditional. Further, implementing smaller pieces before everything is ready, testing and learning with the help of pilots and experiments on a small scale before rolling it out to the whole organization also helps in ideation, before finally applying those ideas (prior to implementations) across the broader spectrum.

So, what have you deduced? An improved supply chain performance with omni-channel through an emerging data source that gives you the required anteing-up, is a successful CPG’s only call. Take it now, read up here and come along with us!

What are CPG Companies’ concerns? Delivering quality services and products by viewing the exchange scenario (of those products and services) through the consumer’s eyes. The best way for CPGs to do this in 2019, is to adopt the lateral thinking route, rather than going strategic.

It’s true that most businesses and industries have a whole strategy that they execute when approaching a group of consumers, but this needs to change. Changing the trend begins by adopting this methodology to cater to the fast paced goods and services hungry citizens. Reviews, ratings and alternatives for every independent service will soon follow.

Here are 3 key trends for 2019 that are most likely to earn CPGs a good name this year:

1. Omni-Channel and Online Sales – Here’s a CPG business trend that got sighted as one because more than 50% of shoppers are likely to make their purchases online and are also given the welcoming in-store experience they desire. There is a cascading effect of such online shoppers as CPGs build strong bridges to create a viable omni-channel experience this way. CPG businesses are also widely offering home delivery to touch a larger customer base as well as expanding their reach through collaboration.
2. Greater Focus on Credibility, Trust, Values and Sustainability – A sizeable set of consumers are relying on trustworthy and credible Companies/brands that they emote with easily (or who have had a history with those brands in the past), and what syncs with their beliefs and values. A firm reliance on sustainability occurs, owing to the promise that a service or a product has so given them, either by being eco-friendly, or by being enduring in nature, or merely those brands that have pandered to customers’ tastes. This is set to be a rather fiery trend, giving a CPG Company that extra edge in its dealings with customers.
3. Data and AI – Since bottom-line growth is central to the CPG industry, wide swaths of data comprising consumer preferences, marketing campaigns, reviews and feedback must be given due consideration. Data is the oil, the sun and everything in between for CPG Companies today. AI helps in harnessing copious amounts of real-time data, in order of priority, as well as sends alerts regarding corresponding or relevant KPIs and reports that the business decision maker should review. AI also provides insights that would result in taking a discretionary, albeit valuable business decision that would then allow the CPG Company to direct realistic action accordingly.

Convenience, efficiency and better touted products and services that suit customers’ needs and tastes, along with the widespread use of social media, will help the CPG industry to influence purchases.

Making themselves available everywhere is what matters the most, and while I’ve shared what is most likely to trend in ’19, breaking some of the existing trends by closely priming in on these will be able to solicit a result (for CPG Companies and Customers) that will cause a boom independently and by being in-dependence on each other.

Question is, are you in-deep with these ideal tr-ends? Read on for more about us in the Distribution space.