2018 Distribution Challenges and Opportunities

From responding to customers’ buying preferences to understanding the true cost to serve, Modern Distribution Management highlighted a list of key challenges facing manufacturers and distributors in its 2018 State of Distribution Report. While these challenges are certainly relevant to the distribution of foodservice equipment, they also help shine the spotlight on some potential opportunities for growth.  These opportunities include: 

1. Managing Customer Transactions:  Distributors and manufacturers need to understand how their customers want to make transactions, and make it easy for them to do so. Buyers and buying preferences continue to evolve and so, too, must the structure of sales teams. Inside sales teams may be best served by a focus on improving customer relationships, perhaps through automated purchase orders that promote improved speed and accuracy while freeing up reps to focus on customer needs.

2. Analyzing Unstructured Data:  Distributors often gather customer behavior data via e-commerce and other digital touchpoints, but with up to 80 percent of orders still being placed through email, there’s a tremendous amount of unstructured data that’s being neglected. Analyzing this data can lead to a more accurate reflection of buying trends, key customers, volume, timing, and other factors that may help foster more informed decision making.

3. Understanding the True Cost of Serving Customers:  EDI, web portals, and other similar platforms help boost sales efficiency, but measuring success by the total sale or gross margin doesn’t paint a complete picture. To have a true understanding of the cost to serve customers, the transaction must be evaluated from start to finish, accounting for customer exceptions along the way. Once the cost of the platform is combined with the cost of customer exceptions, distributors may find it worthwhile to explore alternative solutions.

4. Maximizing Digital Transformation:  Digitizing business processes can be a great way to reduce costs and boost efficiencies, but it must be done in a way that does not negatively impact customer satisfaction. Proactive communication, speedy processing times, and consistently reliable accuracy must also be maintained to ensure continued customer loyalty.