How Manufacturers and Distributors Can Build an Agile Supply Chain for the Post-Pandemic Era

By: | Category: Distribution / Manufacturing, ERP

Slowly but surely, the world is reopening. Factories are catching up on backlogs, and supply chains are rumbling back to life. Despite these positive signs, no one is suggesting we go back to business as usual. Wholesale distributors and manufacturers are adopting new strategies and rethinking old ones to keep their supply chains healthy and moving. What strategies are working for industry leaders? Are there common threads that all distributors draw upon to improve their chances for success in the new, post-pandemic economy?

Use Technology as a Catalyst for Change

Many distributors and manufacturers continue to rely on paper forms, manual workflows, and duplicate data entry tasks to support their supply chain. There’s been hesitation to invest in modern technologies where the return-on-investment is uncertain, especially during the pandemic when budgets tightened amid uncertain cash flow projections.

At the other end of the spectrum, industry-leading companies accelerated their digital transformation efforts during the pandemic, deploying technology to help automate workflows, minimize human contact, and control costs. The declining costs and broader use cases for key technologies such as the Internet of Things, cloud computing, robotics, and business intelligence will allow all savvy distributors to use the pandemic-related slowdowns as a catalyst for change. One fundamental technology industry leaders all rely on is ERP optimized for the distribution sector.


Use Visibility to Boost Agility

Even before the pandemic struck, distributors and manufacturers grappled with the need for greater visibility across their supply chains.  A company cannot react to late shipments, quality issues, or cost increases without deep end-to-end supply chain visibility. One major barrier to visibility is disconnected applications that don’t easily share data.

Organizations that adopt a comprehensive suite of interconnected business applications have the proverbial single source, 360-degree view of the truth. With one ERP database holding orders, inventory, sourcing, and fulfillment — along with marketing, sales, and support data — companies gain the necessary agility and visibility to improve business performance and increase customer satisfaction.

Leverage Analytics to Look Around Corners

The sting may still be too fresh to consider the pandemic-induced challenges faced by distributors and manufacturers a learning exercise. Still, there is much to be gained from analyzing a business over time — even over unprecedented times.

Industry leaders use analytics tools to improve efficiency, drive strategy and change, and monitor and improve their financial performance. Analytics can be descriptive or predictive, and both combine to inform better decision making. A modern, comprehensive, suite-based ERP application can include analytics and business intelligence tools that allow distributors to look at their operations in a multitude of ways. The best offer pre-configured dashboards and KPIs that provide organizations with real-time insight into key financial and operational data, helping leaders identify issues, trends, and opportunities.

Sharpen Demand Planning to Lower Costs

The pandemic caught many (if not most) distributors with a demand problem: either too much or too little. Even the most sophisticated demand planning tools are no match for the chaos a global pandemic brings, but effective inventory management is critical to the ongoing success of manufacturers and distributors.

Industry leaders rely on accurate demand planning to reduce inventory holdings, increase inventory turns, and reduce lead times. Demand planning has always been part art and part science. The art come from experienced teams with institutional and industry knowledge and sharp instincts. The science comes from an ERP designed for wholesale distributors. The best ERP applications provide flexible configuration so that an organization can choose the planning method/s (linear regression, moving average, seasonal average, or sales forecast) that apply to them. It’s important to note that visibility (mentioned above) is critical for accurate demand planning, reinforcing the value of an integrated suite of supply chain modules.

An Agile Post-Pandemic Supply Chain

Building a more agile supply chain in the post-pandemic era is remarkably similar to building an agile supply chain during pre-pandemic times. Fundamentally, very little has changed. Instead, the pandemic revealed vulnerabilities in data access, workflows, and processes. In doing so, it is prompting many manufacturers and distributors to accelerate their rate of technological change, adopting technologies that deliver visibility and business insights while streamlining and automating tasks. By incorporating a powerful suite of business technologies designed for the industry, companies can gain the agility needed to balance demand, reduce risk, and better control costs.