How Distributors Can Deliver Digital Self-Service Through Inventory Management

The pandemic forced distributors to increase their online footprint to meet demands from customers; the result is now the new normal.
How Distributors Can Deliver Digital Self-Service Through Inventory Management

We all know that COVID-19 forced many distributors to rapidly increase their online presence to meet growing demands from customers for self-service and online product information. This shift to more digital self-service, paired with an increasing demand for remote interaction with sales reps, is the new norm.

According to a recent study by McKinsey and Company, digital service and sales will remain a dominant part of the B2B go-to-market model, regardless of customer size. The McKinsey study found that B2B customers are increasingly using and preferring digital channels to interact with suppliers, and companies responded by shifting sales channels toward digital. The study also found that B2B decision-makers overwhelmingly expect the new model to persist, even when the pandemic is over.

While in-person sales have largely returned for many distributors, buyers have come to embrace an omni-channel approach. In this environment, distributors are asking: How can I continue to deliver customers top-notch service given a fluctuating supply chain and changing customer demands?

While most distributors are adopting e-commerce as a solution to meet customer demands for self-service, there’s another less-traveled avenue ripe for digital self-service: consigned and customer-owned inventory automated replenishment.

Technology now exists that can facilitate digital self-service inventory replenishment at the point-of-use for manufacturing and contractor customers.

An automated inventory management program can provide the following benefits for the distributor and end-user:

  • Real-time visibility into stockroom inventory, whether consigned or customer-owned.
  • Inventory usage data, helping distributors to optimize their distribution centers and customer’s stockrooms to reduce inventory investment and carrying costs.
  • Automated triggers to replenish stock when items reach set minimum levels, providing peace of mind that the customer will not have stockouts or over-stock.
  • Touchless replenishment with IoT sensors, allowing distributors to expand the reach of their sales teams. They can meet manufacturer’s restrictions on visitations and redirect their focus to proactive selling instead of doing onsite inventory counts.
  • Elimination of forecast error in distribution centers if a distributor uses replenishment apps that calculate demand based on what customers are actually using, not what they have historically ordered, better meeting demand in a fluctuating supply chain.

Many distributors that manage their customer-owned inventory or provide vendor managed inventory (VMI) often check stock in-person — with a clipboard in hand ready to count items onsite and key in orders back at the office — because they believe that it fosters customer loyalty. A manual approach to inventory management is not proactive and doesn’t reduce errors or stockouts like automation can.

The same customer loyalty can be inspired from a distance. Your customer just wants it to be easy, and for products to be available when they need it. With an inventory management app, distributors can offer automatic replenishment of their customer’s stockrooms, with digital tools and without a rep onsite. The customer can do their own replenishment using mobile apps or IoT sensor bins to automate replenishment.  No human intervention needed. When employees are no longer counting SKUs, they are free to focus on more strategic work.

An additional benefit: Distributors can mitigate some of the supply chain issues plaguing their customers right now by offering their A-level customers consigned inventory or by managing their customer-owned inventory as value-added services to ensure they have critical items in their stockrooms. This system works well when paired with an app designed for point-of-use inventory management that provides customer and distributor real-time visibility into inventory and uses actual consumption data for replenishment.

Usage data allows for more accurate calculations when there is fluctuating demand. For example, if a manufacturer shut down for a couple of months to accommodate pandemic distance requirements, a distributor using a system that calculates replenishment of their distribution center based on the previous year’s orders would likely end up with significant over stock.  At the manufacturer, if last year’s orders determine what inventory levels are needed versus most recent usage, which is zero, there would likely be significant overstock — prompting the manufacturer to be dissatisfied with the distributor’s service.

With the increased desire of their customers to manage interactions with suppliers remotely, a distributor can give their customers the digital self-service they want while also continuing to nurture customer loyalty.

Rock Rockwell is CEO of eTurns, a point of use inventory management app that automates inventory replenishment in stockroom and service trucks using phones, RFID and TrackStock SensorBins™. Contact Rockwell at rock@eturns.com.

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