The wholesale distribution industry is a critical link in the global supply chain— the all-important connection between producers, retailers, and consumers worldwide. For years, distributors have had to contend with a familiar range of business challenges. These include managing inventory and warehouse space effectively, tracking batches and serial numbers, cost management, demand planning and forecasting, regulatory compliance, and dealing with warranty claims, returns, and repairs.

Today, the industry faces numerous challenges, left, right and center. For starters, the unstoppable rise of e-commerce of Amazon, AliBaba, and other e-commerce giants have completely upended traditional distributor models and significantly changed customers’ expectations – they buy what they want, when they want it, and at the lowest possible price — with same-day delivery if at all possible. The sheer convenience of modern online shopping means that customers place smaller, more frequent orders. For distributors, these changes means companies must process more orders and deliver increasing numbers of smaller shipments, which erodes overall profitability.

Then, there’s the pandemic. As Covid-19 swept the globe, it exposed how fragile the global supply chains are, on which businesses and economies depend. It gave rise to new political disagreements, which impacted trade. And it played havoc with the day-to-day operations of producers, distributors, and retailers alike. Some distributors were agile enough to pivot their business operations and adapt to the new reality; others found themselves at the heart of in- demand sectors and were able to rise to new heights. Many others have held on as best they can, focusing on survival above all else.

Despite these challenges, some firms have been able to adapt, thrive and level up their business. The secret to their success lies in the MDM Distribution Intelligence study; it revealed that those who focused on revenue growth and gaining better visibility into the company’s overall performance succeeded whereas those who focused on reducing headcount and improving employee productivity, cutting product and transportation costs, and minimizing inventory investments struggled.

Successors looked for opportunities to improve cash flow, profitability, inventory management, customer retention, employee training and in automation to increase efficiency. In our experience, these thriving organizations have capitalized on ERP systems and other digital technologies to achieve the insights, agility, and responsiveness needed to meet customers’ demands in a challenging business environment.

SAP Business One helps achieve those insights, agility, and responsiveness needed to meet customers’ demands in a challenging business environment with real-time information and seamless e-commerce integration. This improvement in demand planning and inventory and supply chain management gives you and your teams the space you need to focus on delivering value to customers and growing your business.

Sharpen your competitive edge with SAP Business One and learn more about becoming the strongest link in the supply chain in our latest whitepaper: