How OMS technology can help distributors become value-added partners

By | 4 minute read | June 9, 2021

With the modernization of technology, manufacturers have more tools at their disposal to serve customers directly — challenging the distributor’s role in the supply chain. Distributors should consider leveraging technology to enable and strengthen their customer and supplier partnerships, creating value that might not otherwise be possible. B2B order management solutions create opportunities for manufacturers and distributors to work together for improved sales, reduced costs, enhanced collaboration and stronger customer relationships.

Improve sales

The B2B market is restructuring and digitizing, with B2B eCommerce estimated to account for 17% of all B2B sales in the US by 2023. Distributors need technology solutions built for B2B that power their growing eCommerce footprint, with scalability for even their highest demand. Distributors relying on their ERP are not prepared to thrive in an increased eCommerce environment. ERPs lack the ability to harness real-time inventory and fulfillment data, and their disjointed processes lead to lost sales and backorders. By augmenting ERPs with advanced order and inventory management solutions, distributors can unify disparate data sources and provide a more accurate picture of what inventory is available to customers. With insight into inventory, distributors can optimize stock levels to guarantee fulfillment of orders.

Additionally, inventory visibility lays the groundwork for a successful customer eCommerce experience. A single, unified view of inventory makes complex orders easier to manage. This visibility enables delivery tracking so distributors can create a transparent customer experience, giving them confidence in where the order is and the ability to accurately promise when it will be delivered.

Reduce costs

Even with value-added services and self-service capabilities, distributors still struggle to expand margins, requiring a need for greater innovation. And, with COVID-19, business priorities are shifting to focus more on operational efficiency, with reducing costs at the top of the list. Distributors can use modern order and inventory management technology to reduce costs through several avenues:

  • Reducing human error: By automating manual processes in pricing, ordering, processing and sourcing, distributors can avoid the costs of human error.
  • Smart sourcing and fulfillment: Rather than relying on a person to select the best fulfillment option, use AI to analyze all fulfillment options to find the true lowest cost-to-serve option that still meets SLAs.
  • Reduce inventory costs: With full visibility into inventory across the supply chain, distributors can spot redundancies and find opportunities to reduce excess inventory holding costs.
  • Avoid contract penalties: Instead of traditional first come, first serve processes to determine how they fulfill orders, distributors can lean on smart supply chain technology to prioritize customers based on their contractual needs, so they serve the most critical customers first and avoid penalties.

Enhance collaboration with data sharing

There are clear trust barriers to sharing data between distributors and manufacturers, stemming from fear of unintentionally giving away valuable competitive data. However, there is real value in data sharing with manufacturers. It creates visibility across the value chain to enable all supply chain stakeholders to react more quickly, and improves trust and provenance across the value chain. Although this collaboration is only successful with clear value propositions and rationales for data sharing, as well as mutually beneficial agreements, it can provide significant benefits for both parties and the end customer.

Data sharing can improve resource coordination and visibility into value chains, ultimately delivering better customer experiences and accelerating profitability. When organizations don’t share data, they create blind spots. Sharing information helps select the best possible customer outcome- whether that’s a direct to customer delivery from the manufacturer, a drop-shipment, or a delivery from a distribution center. And, with data sharing, distributors and manufacturers can gain end-to-end visibility across the value chain, improving the ability to react quickly to unexpected events and reduce inventory.

With visibility across the supply chain, distributors are able to understand and act on changes in the market as they occur – to perfectly balance protecting margins, utilizing store capacity and meeting delivery expectations. These sourcing decisions can dramatically increase profits, especially during peak periods. Perhaps the manufacturer has inventory that could be delivered to the customer at a lower cost, but a distributor’s warehouse is much closer. With hasty delivery prioritized, the distributor and manufacturer both know they are serving that customer best by going through the distributor instead of direct to customer.

Closer customer relationships

With changing customer demands, distributors must rethink their supply chains to satisfy customers and drive profitability. Distributors must prioritize exceptional customer relationships and invest in improving customer experiences. Technology creates opportunities to make smarter, more insightful decisions to serve those people even better and improve customer retention.

Personalized eCommerce

Distributors excel because of their local, personalized services. Distributors can go one step further in tailoring the order experience by providing unique online sales catalogues or pricing options based on the customer themselves, providing more relevant and helpful eCommerce experiences.

Seamless self-service

Distributors are increasing their use of self-service tools to drive online sales. By simplifying their online ordering experience, distributors can empower customers to seamlessly complete complex orders across multiple brands.

Modern fulfillment experiences

By embracing automation and AI, distributors can deliver to customers cheaper and faster than ever before, enhancing the customer experience.

Enabling customer confidence

With today’s order and inventory management technology, distributors can give their customers the confidence to know that their order will arrive on time and in full, improving customer loyalty and repeat purchasing. Distributors can enable customer confidence by investing in technology that provides real-time inventory availability for sales catalogs and calculates accurate delivery estimates backed by intelligent insights.

With growing customer demands and changing technology, distributors need to navigate their complex commerce landscape with a customer-centric perspective, creating value from order to delivery. By augmenting existing supply chain applications with IBM Sterling Order Management, they can fill key capability gaps to enhance the customer experience and increase revenue.