Challenges Facing the Distribution Industry

Ten years after the recession, the U.S. economy is doing well — and distribution companies are benefiting from strong sales. Nevertheless, due to technological disruption, regulatory issues and changes in the workforce, the distribution industry faces several distinct challenges. Here’s what you need to know.

It’s More Challenging to Find and Retain Skilled Talent

The average unemployment rate in January 2019 was only four percent. And although there are currently four generations in the workplace — Baby Boomers, Gen X, Millennials and Gen Z — distribution companies are finding it increasingly challenging to find and retain talent with the right skills and experience. In general, there are two reasons for this talent challenge.

First, due to technological advancements, many companies have started operating with new equipment. However, talent that knows how to operate the equipment while also possessing the right experience for the job is scarce.

The second issue is that many younger individuals — Millennials and Gen Z — quickly become frustrated with decentralized data management systems and other technological solutions that haven’t yet been upgraded. As a result, they prefer jobs where they can work with solutions that are similar to the apps they use in their personal lives.

Regulatory and Political Issues Are Making Importing More Complicated

New and revised regulations on products, as well as tariffs on certain goods, are changing how companies purchase and import goods. With more stringent regulations and higher tariffs, prices often rise — and that, in turn, can impact demand. Companies then have to adjust the volume and frequency of their shipments as well as their revenue expectations.

Streamlining Business Data and Processes Is Critical

Vendors value transparency when they’re working with distribution companies. Moreover, distribution companies need full visibility to properly manage their inventory and align their resources with demand. Any distribution company that wants to achieve full transparency and visibility needs a distribution ERP that streamlines processes and enables centralized, real-time data management.

By leveraging top-quality distribution ERP solutions, companies ensure they can efficiently process sales orders, sync inventory data, check inventory levels, schedule shipments and place new orders — regardless of how many locations they have.

At the same time, comprehensive ERP solutions that are specifically geared to the distribution industry enable companies to optimize their supply chains by offering seamless integration with their vendors’ tools. This ability helps build stronger business relationships and streamlines the entire distribution process.

It’s Essential to Deliver a Good Customer Experience

Nowadays, customers know how to educate themselves about products and the companies they purchase from. In addition, they like to share their experiences with others and often base their purchase decisions on reviews from other customers. Clearly, it’s essential for companies to deliver a good customer experience — or CX. And while it’s important to provide transparency about the status of orders, it’s equally critical to handle products with care and provide outstanding customer support that’s geared toward the fast resolution of any issues.

According to experts, we’re experiencing an economic growth of over three percent. Moreover, consumer confidence is strong. That means there’s plenty of opportunity for distribution companies — as long as they know how to overcome these industry-specific challenges and position themselves for success.

Learn more about our ERP solutions for the Distribution Industry or Contact Us today.

2019-02-25T06:28:17+00:00 February 20th, 2019|Distribution, General ERP articles|Comments Off on Challenges Facing the Distribution Industry