Digital Transformations Are Key to Distributors Realizing Optimistic Projections for 2021 - Modern Distribution Management

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Digital Transformations Are Key to Distributors Realizing Optimistic Projections for 2021

To make this a successful year, distributors looking to grow their businesses are likely to improve their chances if they grow their digital capabilities, said industry experts Diane Yarrow and David Saunders.
In the weeks and months leading up to MDM's SHIFT conference, podcast guests spoke on a variety of topics, with transformative actions and evolving roles among the most-talked-about.

A top lesson from the onslaught of the pandemic last year: Distributors can’t sit on their laurels this year, according to two industry experts.

Speaking on MDM’s recent webcast, “On the Bright Side: How to Create Opportunities From 2020’s Disruptions,” Ultra Consultant’s David Saunders and Oracle NetSuite’s Diane Yarrow spoke about where the industry is headed in 2021, what the challenges are and how distributors can solve them.

Starting in March, the pandemic accelerated distributors’ shift to the cloud in order to re-direct their efforts on the fly as customers were forced to embrace remote working, new delivery models and compromised supply chains.

In order to have improved visibility into internal processes and customers’ demands, distributors need to do a better job of analyzing information that is already at their fingertips, NetSuite’s Yarrow said.

“If you can manage your orders, manage your inventory, have visibility into your supplier network and make good on the promise to deliver the right product to the right person at the right time at the right price, you’re going to do well in business,” said Yarrow, senior regional director at Oracle NetSuite. “There’s lots of fragmented data out there. It’s our business model to bring that together for more actionable insights.”

Through the use of machine learning and artificial intelligence, Yarrow said distributors can use actionable analytics to improve business outcomes such as supply chain management.

Saunders, who is a senior consultant for Ultra Consultants, said process improvement can be boiled down to three areas: people, processes and technology.

“If you’re going to change technology, there’s an impact on processes and people,” he said. “If you’re going to change the process, you need to look at technology and the people. If you’re going to change the people, you may need to look at process technology, or understanding your people may guide you to do different processes and technology. So they certainly are interrelated and certainly overlap.”

Distributors also face a cultural hurdle when it comes to enabling their digital transformations. Employees are used to doing their jobs a certain way and may be resistant to the automation of tasks that were previously typed into an Excel spreadsheet and then manually implemented, according to Saunders.

“I’m collecting all this information,” he said. “It could be forecasts from customers. It could be information from our supply chain partners. I’m getting all of it, but what do I do with it in? How do I take that and convert it into actionable information in real time? It takes me a week to put it into Excel spreadsheets and try to crank through it. How can I make it more real time so I can be more responsive?”

Think Beyond Excel

Saunders said there was no value for inputting data into three separate Excel worksheets that then needed to be implemented manually back into a system.

“Contrary to popular belief, and I know this may be shocking to some of you, Excel really is not a tool you should be running your business on,” Saunders said. “Although I know a lot of people do it. I’ve had people I’ve worked with who swore that they could run the entire company in Excel. And maybe to a certain extent, that’s true, but for the long haul, if you really want to grow the business that’s not how you want to do it.”

Analytical tools that use AI and ML can automate the data gathered into actionable items such as automatically provisioning workflows on an order once the information has been analyzed to meet a pre-set criteria.

Along similar lines, robotic automation can enable social distancing by moving products from one set of employees to another without them interacting. In addition to keeping social distancing in place, robotic automation also improves operational efficiencies.

While enterprise resource planning and customer service management software are a boon to distributors, something as simple as better overall planning will also make a difference for even smaller distributors.

“Scenario planning aided by technology can be really important, particularly your demand plan,” Yarrow said. “So, looking at a best-case scenario, a same scenario, and a worst-case scenario can really put in plans and processes and redeploy people to react.

“It’s proactive reaction, and technology can certainly help that. Any time you have technology that’s integrated, it’s going to help you control inventory as well as set better expectations on the customer.”

Both Yarrow and Saunders are optimistic that distributors will grow their businesses this year, as long as they continue to grow their digital transformations.

“We do think things are getting brighter as we move forward this year,” Yarrow said. “But it’s going to take both resilience in our supply chains and in ourselves.”

Listen to this MDM webcast in full by clicking here

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