5 Common Challenges Facing the Distribution Industry

Any business owner or manager that operates within the distribution industry will be aware of the highly competitive nature of the market. The movement of goods between suppliers and retailers – and other B2B sales – is an incredibly active market with growing opportunities and digital access.

However, the challenges and adaptations required of businesses within a growing 21st Century industry are inevitable. The distribution industry’s facing massive technological and operational disruptions across all sectors, largely due to the proliferation of smart technologies, such as IoT devices, predictive analytics, automation and machine learning.

In order to remain competitive, companies in the distribution industry are having to adapt to these technological advancements. Their clients and customers demand access to online inventories and real-time information about their orders. Goods need to be manufactured, packed and shipped with constant updates for those you supply.

From inventory to supply chain management and online sales, keeping up with the technological and consumer demands of a bustling, modern industry can be tough. In this article, we’ll be looking at five common challenges facing businesses in the distribution industry and how to overcome them.

  1. Stock and Inventory Management
    One of the most significant challenges facing distribution companies are stock and inventory management. Traditionally, a supplier would simply conduct periodic inventory checks to determine the quantity, quality and asset value of their stock. The results would be recorded by hand on paper or a computer, and stakeholders would be given updates now and then.

    Today, this won’t work. There are a variety of ERP – and other business management – solutions to help distribution companies digitally monitor every piece of inventory and every shipment. The long days of counting items and scanning barcodes or overstocking warehouses and incorrect data are over. Now, distribution managers can conduct inventory checks and search through stock instantaneously and without error.

  1. Meeting Changing Consumer Demands
    Meeting demand for your goods or services can be difficult in the modern world. With more online and transportation access worldwide than ever before, companies need to make sure their supplies are more readily available and affordable than their nearest competitors. B2B customers, such as retailers and wholesalers, are in their own e-commerce battle to cut down costs and beat out their market competitors.

    In turn, distribution companies need to be able to cut down on their own costs and improve their own sales mechanisms. Distribution companies are facing this challenge with ERP solutions that help streamline a variety of critical daily operations. This digital infrastructure offers relevant stakeholders’ access to real-time, accurate and actionable information about any B2B sales. ERP software helps distributors make more cost-effective, quick and reliable business decisions.

  1. Battling in Competitive Markets
    As we’ve been discussing, the distribution industry’s one of the more competitive markets out there. Distributors are competing with companies around the world, who might offer a more affordable and easily accessible version of your products. In order to remain competitive in the digital age, companies need to invest in digital business solutions, like ERP software, which help distributors collect reliable data and provide actionable insights.

    The actionable insights provided by ERP solutions can help companies improve their business operations, supply chain network, online purchasing tools and inventory management, including transport and tracking. It’s critical to keep up with these technological advancements and find these areas for improvement, because they’ll be the difference between you and the next best option.

  1. Supply Chain Networks and Management
    The purchasing behaviour and habits of businesses and consumers are changing. As access to online purchasing, global markets and new companies increases, so does the complexity of the supply chain network that manufactures, distributes and sells those goods. Improving your distribution company’s supply chain management will be one of the bigger challenges to overcome in the 2020s.

    Businesses and customers are demanding exact delivery dates, real-time tracking, transportation details and continual availability of the goods they’re purchasing. ERP solutions give distributors the ability to share information across the organisation and with customers more easily. Combined with historical sales data, companies can better manage orders and predict precisely when they’re being shipped and delivered. ERP software makes it possible to give customers the exact information they require.

  1. E-Commerce and Online Purchasing
    In recent years, we’ve seen an incredible growth in the amount of online purchasing and e-commerce being conducted. Modern distribution companies are becoming more accessible to potential buyers and expanding their market possibilities. Selling directly to businesses and consumers, rather than wholesalers, allows distributors to increase their profit margins and sell to a wider range of consumers. ERP software helps manage the challenge of increasing online demand from global consumers, by digitalising the supply chain.

Overcoming These Challenges

Adopting modern business solutions, like ERP software, is a critical investment in the future of your company. Distributors need to keep up with the incredible technological advancements and digital changes that are occurring across every industry. By investing in ERP solutions, distribution companies can optimise their management processes, supply chain network, sales strategies and business operations.

For South African distributors that are looking to integrate world-class ERP solutions and optimise their business operations, look no further than Lorge. Let us help you ensure that your business remains competitive in the digital age.