Lessons in Technology: What Next Generation Distributors Need to Know

"Digital transformation": these words are often bandied about in the distribution industry-and while most people agree it's necessary in this age of constant change and disruption, it still raises some trepidation.

"The first thing that comes to mind (when we talk about transformation), is probably fear," said Steve Levy, VP of Enterprise Architecture at Infor Distribution.

However, that fear stems from the traditional concept of transformation-incrementalist approaches tend to achieve resounding success.

"A majority of (transformations) have been fantastic and have produced some great results for companies that are now thriving as a result of their transformation efforts", he said.

"The key is creating a blueprint and a strategy-first, you must figure out what your organizational goals are."

The blueprint for operational excellence

To achieve operational excellence, your organization must be able to consistently, efficiently, and safely meet customer expectations, while minimizing waste and maximizing value.

However, there are some universal critical challenges that distributors face when trying to achieve these goals:

Rising customer expectations

One of the biggest challenges faced by distributors is how the influence of organizations like Amazon has created a demand for increasingly efficient services.

"We've been spoiled-we want to buy what we want, when we want, and have it delivered the same day, or by the next day," said Will Quinn, Director of Industry & Solution Strategy at Infor.

Supply chain disruptions

Historically an existing challenge for distributors, supply chain disruptions have only gotten worse over the years, causing significant interference with inventory levels. To mitigate this, organizations have started stocking up on inventory, which results in valuable capital being tied up, overfilled warehouses, and inefficient distribution centers.

Labor retention

An existing challenge since before the pandemic, hiring and retaining labor has become increasingly more difficult since, as the rise of e-Commerce sees an explosion of new warehouses and distribution centers.

"They want a gaming environment, something that's familiar and similar to what they do at home," said Jerry Beaston, Infor's Senior Product Manager for WMS. "So they need to be able to create or finish the transactions easily, but at the same time, have accuracy."

Mapping the journey of transformation

The nature of transformation is that it's more a journey than a one-off project. And this journey begins with a single step: in this case, creating an organizational transformation blueprint to ensure focus remains on value creation and your overarching business goals, as opposed to mere tech outcomes.

As organizations take the leap into digital transformations, it's important to remember that while the tech outcomes are clear goalposts to track progress, the real impetus needs to be driven by business outcomes.

"When we say we want to move to the cloud, everyone becomes focused on that. But it's not about moving to the cloud, it's about making our distributor worth more money," Steve said.

"At Infor, our customers are starting to realize we don't want them to use our software, we want to make them worth more money. We're a means to that end, a tool to make that company more valuable."

Leveraging tech solutions for operational efficiency

While keeping up with technological advancements can be a daunting task, the right technology-and the right partners-can help your business operations by mitigating some of the most pressing challenges distributors face.

From small branches, which require a basic locator system, to large warehouses that leverage robotic technology, alongside artificial intelligence (AI) and machine learning, tech solutions make distribution operations more effective and efficient.

For larger warehouses, modern warehouse management systems (WMS) play a critical role in optimizing logistics and inventory management, which in turn, work towards boosting revenue.

"The right WMS can increase profit margins from half a point to over a point, and that's significant", said Will.

Warehouses that utilize WMS solutions can see a 3-8% increase in on-time in-full (OTIF) orders, 2-4% reductions in damaged inventory, and a 1-5% reduction in overall labor expenses, while having an 8-15% increase in team productivity.

"Technology is a tool-you wouldn't think to move pallets around the warehouse without a forklift anymore, but companies are still not using the right technology and tools to get things done," Will said.

This is where Infor's WMS solution shines: this intuitive warehouse management solution combines warehouse fulfilment with embedded labor management and 3D visual analysis for a shorter learning curve and faster route to return on investment.

Boosting competitive advantage through AI and cloud-based solutions

While AI and machine learning have existed for decades, new technological advancements have finally made them accessible and applicable for a broader range of businesses. The result: AI integration has emerged as a critical factor in improving warehouse operations.

"It's an opportunity lost if you are not considering AI strategies right now because it's important for a distributor to have visibility on its supply chain to understand its market," said Sandeep Anand, Infor's Senior Director of Decision Analytics & Science.

Implementing solutions like Infor's Coleman AI automates repetitive tasks and enhances decision-making, enabling employees to focus on higher-level, strategic functions while offering data-driven insights into customer behavior and preferences.

While AI is typically seen as a contender or possible replacement to humans, Sandeep said that AI is not about replacement but rather empowering people to make informed decisions and reach their business goals.

"I always think of AI as a people-first solution-Augmented Intelligence-because people are helped by it, versus it replacing people," he said.

"Infor is one of the largest providers of enterprise solution software right now. Our business model is helping you make data-driven decisions to help make your business run effectively."

"We're building enterprise software that allows you to make business decisions without focusing too much on the software, and instead just focusing on what you want out of your business."

Improving customer experiences through tech

More and more people are moving towards digital transactions, and statistics show that trend is here to stay. This means distributors need to deliver a frictionless, intuitive buying experience by implementing front-end technology solutions that streamline the entire purchasing process.

"We don't have that face-to-face connection as much as we did before," said Shelley Horn, Infor's Director of Solution Strategy. "From an automation perspective, I think we can break down a distributor's response in three ways: differentiation during the resource process, reducing costs, and streamlining the buying process while cross-selling and upselling."

A seamless front-end operation allows customers to efficiently research, order, and receive products with minimal barriers, reshaping the entire customer experience.

Leveraging Infor's integrated solutions allows distributors to enhance customer engagement and personalize the buying experience. On the back end, a unified platform that integrates multiple functions, from inventory management to customer relationship management (CRM), helps distributors to develop a holistic view of their operations and customer interactions.

"Every distributor is looking to see how well they're performing, how happy their customers are, and if they're getting return business," said Kelly Squizzero, Senior Director of Industry & Solution Strategy at Infor.

"If you empower your employees with information by using AI and machine learning to make smart recommendations and automating processes to improve accuracy, you are only going to improve your customers' experience."

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