The Wholesale Distribution Industry faces a lot of hardships in terms of digitizing critical business operations. It is critical for wholesalers to react to changes in the technological environment and emerging business strategies.
Building back-end systems is the best way to secure long-term success in any company, and this is obvious in the wholesale sector. Because they work in the background, between product creation, manufacturing, and delivery; wholesale and distribution functionalities are critical to be handled by the businesses with raw manual labor.
With the support of digital technologies, the wholesale business is at the helm, steering the ship away from the storm. Time to look at how to sculpt the transition to a digital environment utilizing the intelligent technologies offered by SAP.
Let’s begin with the challenges faced by the wholesale distribution sector while undergoing digital transformation;
Obstacles that delay your transformation:
The wholesale distribution sector requires distributors to cope with a number of obstacles that might potentially turn into possibilities for future growth. Major challenges faced by the wholesale distributor industry are listed below:
● Planning and execution of the supply chain: Wholesale distributors are searching for methods to increase visibility throughout the whole supply chain, safeguard client relationships, and establish long-term supply chain resilience.
● Bulk outdated legacy systems: Wholesale distributors’ conventional distribution routes have been badly harmed, and in certain circumstances, totally shattered. The ability to automate the quotation and proposal process, provide improved customer service, boost e-commerce capabilities, and provide the insights needed for better decision-making will all be enhanced by updating the IT infrastructure.
● Financial risk mitigation: Distributors often devote substantial resources to ensure product availability, vital operations, and response, with limited visibility into the costs associated with these efforts. The business can better examine the financial consequences of key business choices by offering a single view of financial data with the capacity to simulate and analyze it.
● Taking Value-added services to the next level: For years, wholesale distributors have offered value-added services mostly for free. With rising market rivalry, distributors must take these value-added services to the next level, leveraging them to dramatically boost revenue and bottom-line profitability.
● Talent management: For a long time profound expertise has been a trademark for many wholesale distributors, but they are increasingly trying to pass on that experience and knowledge to the next generation of employees. Distributors must provide their staff with the knowledge and resources they need to succeed, such as simple access to information and technologies that may help them be more responsive, productive, and discover new and better ways to do business.
Wholesale Distribution Industry: Path Towards Transformation
In today’s competitive marketplaces, wholesale distributors must optimize their non-differentiating business processes, evolve current offerings, and seek chances to go above and beyond what their competitors have to offer. Simply breaking bulk and establishing intimate client ties is not enough in this century.
Leading distributors strive to deliver a highly scalable e-commerce platform to their volume channel while also providing superior client-centric services and working towards a superior customer and brand experience.
Prime objectives of each industry focus on key sector of improvements to enhance the industry’s efficiency in terms of ROI.
The prime objectives of the Wholesale industries are mentioned below:
● Provide high-quality services
● Providing anything, anywhere, anytime
● Provide complete client solutions
● Improve business operations
SAP solutions for the digital transformation of the wholesale distribution industry focuses on transforming the traditional cycle with new-gen cycle features mentioned below:
● A single embedded platform for transportation management to deliver products to customers.
● Real-time tracking of goods in transit.
● Check product availability in real-time using source confirmation alternatives and complete integration with vendors for non-stocked products.
● Anticipate modest stock movement and examine inventory redeployment using intelligent technologies that efficiently accomplishes these difficult activities in a timely way.
● Live material resource planning, allowing insight to action in real-time with a single uniform user interface.
● Role-specific screens to expedite order management and its execution.
● Interaction channels that are integrated to provide a 360-degree perspective of and for the consumer.
Strategies to Streamline Digital Transformation
There is no one-size-fit-for-all business operations for accelerating the digitization process. Every wholesaler needs its customer-centric approach that is adapted to its specific value chain. Hence there are a few strategies suggested for the wholesale distribution industry to ease their digital transformation journey. They are:
- Wholesalers can connect directly with end customers via B2C e-commerce
Wholesalers may capitalize on their advantages by directly engaging customers, either through specially designed B2C websites or by affiliating with third-party marketplaces. These B2C operations are frequently carried out under a new company name. Wholesalers may reach out directly to customers with competitive offerings and prices by launching pure-play spin-offs with systematic digitization of all transaction processes.
- Wholesalers can establish direct sales to small and mid-sized retailers and trade companies
Wholesalers that primarily serve bigger businesses and industrial organizations might diversify their customer base by selling directly to small and mid-sized merchants and skilled trades, either under their current brand or under a new one.
- Wholesalers can become full-service providers for manufacturers
The wholesale business is well-positioned to provide full-service e-commerce solutions that enable associated manufacturers to sell directly to consumers, given its historic relationship with manufacturers. The distributor entitles full responsibility for the supply of all services on behalf of the manufacturer under this model, resulting in added value for the supply chain.
- Wholesalers can become full-service providers for smaller specialist retailers and dealers
By giving access to shared e-commerce platforms, multi-regional wholesalers and buying organizations may help their clients and members compete more effectively. Smaller business clients and mid-sized specialist shops typically lack the means to develop their e-commerce systems. They may, however, boost customer retention within their region and reach out to new customers by utilizing these common platforms.
The Wholesale Distribution Industry is undergoing an irreversible upheaval, in which enterprises must either undertake a quick digital transformation or risk becoming outdated. This move is progressively being accepted by the wholesale distribution business. However, due to existing poor profit margins and high talent acquisition expenses, it is becoming increasingly difficult for them to make a meaningful shift.
As a result, the wholesale distribution industry needs a scalable and trustworthy platform that can deliver a fully integrated B2B eCommerce strategy without incurring the additional cost of employing an expert to execute it.
SAP S/4HANA Cloud is one such solution that can offer the wholesale distribution sector intelligence and industry-specific benefits through a digital core ERP system. To know more about how SAP S/4HANA or about other solutions that can help enterprises in the wholesale distribution industry, do get in touch with our experts!
What are challenges faced by Wholesale Distribution industry?
The obstacles they face are Planning and execution of the supply chain, Bulk outdated legacy systems, Financial risk mitigation, Taking Value-added services to the next level and Talent management.
What are the benefits of SAP S/4HANA in Wholesale industry?
SAP S/4HANA, is useful as it provides faster financial closing, enhanced data management, better corporate cooperation across all departments, personalized service, high scalability, increased reliability and improved data security.
What are the primary objectives of the wholesale industry?
The wholesale industry’s primary objectives are to provide high-quality services, efficient supply chain management, maximize profit, provide comprehensive client solutions, and improve business operations.
What are the features of using SAP solutions in Wholesale Distribution?
The features are a Single embedded platform for transportation management, Real-time tracking of goods, Live material resource planning, Checking product availability, Anticipated modest stock movement, and examining inventory redeployment.