In recent articles, we discussed distributors that achieve spectacular successes amid supply chain challenges and an ongoing pandemic. What most of them have in common is that they extensively use data insight to stand out from the competitive crowd, serve customers better, and pursue transformative initiatives. Let’s consider some of the most efficient ways distribution companies can take advantage of their existing data to ensure the health of their business. There are many ways to create more value from information even without developing a new technology discipline like artificial intelligence (AI) or machine learning (ML).
A key element in innovating distribution
During today’s supply chain disruptions, resourceful distributors develop many strategies to continue serving their customers and remain competitive, valuable businesses. They diversify their suppliers, reduce dependencies on vendors and manufacturers on other continents, open warehouses closer to where customers are, launch new products and services, improve the quality of their customer and partner experience, and offer customers eCommerce channels for some of their products. All these activities can be hugely rewarding at the right time. They could also be fraught with risk or incur unexpected financial costs or unwanted operational consequences. How can you take the right measures to ensure success?
We help distributors answer this question and many others by assisting them in making sense of the data assets they already own. Many people may think of data as an essential element of the business that needs to be protected and retained. But it can be more than that. Think of it as a raw material of great potential—a sort of real-life magic lantern that can be helpful and revealing if you give it the right touch.
What’s the current status of your data assets?
It is still somewhat uncommon that organizations treat data at a strategic level. Most companies own a wealth of historical data on their customers, vendors, markets, and business results. They generate more information every day. Often, data lives in multiple software systems that support financials, procurement, sales, logistics, and other key areas of the business. Knowledgeable people in the business groups may use the data in their domain to gain insight, but its value potential for the entire company may be unexplored.
If a company has an ERP system that serves as the central record for all business information, the usefulness of data depends on the transformative effects of the implementation. Did the software project simply translate existing processes onto a different technology platform, or did the business work with the ERP experts to connect processes and business roles to bring greater visibility and more efficient workflows into the company? Sometimes, ERP cements the status quo, and even some counterproductive data silos linger on. ERP deployments can be truly transformational when aligning with a company’s strategy, delivering tangible, operational improvements, and providing greater insight and decision-making support based on existing data assets.
Putting information to work
When Sikich distribution consultants work with clients to make their lives easier and help them reach the next stage of their business, they usually spend much of their time freeing data from needless boundaries and making it more meaningful and transparent. We deploy several leading ERP systems and build integrations to connect data sources with them. We use the best solutions we know to access, process, and present data in a meaningful manner. Often, that means building intuitive, graphical dashboards that help people answer their questions without navigating unfamiliar software systems or asking for expert assistance.
If we deploy an ERP system for a distributor, like Microsoft Dynamics 365, it already includes standard tools to make data meaningful. For instance, Dynamics 365 offers warehousing metrics that can tell you how fast processes such as putting goods away or shipping items take place. The master planning engine in Dynamics 365 can use inventory data to help keep the right stock levels on hand. If you commit to certain inventory quantities for some of your most important customers and trading partners, you can reliably stay above the minimum thresholds. When it comes to evaluating the quality of suppliers and vendors or how a vendor performs in terms of the company’s goals, Dynamics 365 provides data metrics that can help you create more value from these relationships.
We often use Power BI from Microsoft to help distributors gain intelligence from their data in Dynamics 365 and other systems. Often, when clients see how easy it can be to use Power BI to deliver real-time data insight to anybody who needs it on their preferred device, they begin using the Power BI tools on their own for many more use cases.
How the most successful distributors use data
Some of our highly resilient distribution clients—those who, even during the pandemic, increased their business volumes or overcame supply chain issues to launch profitable new products and services—rely on data insight to reduce the risk of new endeavors and improve the customer experience. They may not be able to control most events in their complex, layered supply chains, but when they can improve their visibility by processing data streams, they can more confidently take the right measures to meet their promises to customers and keep the flow of business going. They might procure from alternate sources, adjust inventory levels when lead times lengthen, time their ordering differently, shift inventory among warehouse locations, or serve an emerging customer need by restructuring some processes. When so many other companies are struggling with answering customers’ questions regarding delivery lead times, even the ability to share dependable information can be a competitive distinction.
Broadening the data insight arsenal
There is another opportunity for distributors hoping to achieve more with data. Microsoft recently launched two new products, Dynamics 365 Intelligent Order Management and Dynamics 365 Supply Chain Insights. Debbie Altham, Senior Director – Enterprise Technology at Sikich, and Jesse Alleyne, Digital Strategy Director – Manufacturing at Microsoft, discussed what becomes possible with these solutions in a video conversation on the topic of visibility during our recent Supply Chain Summit.
Both Intelligent Order Management and Supply Chain Insights include advanced analytics built with Power BI technology and offer easily configurable and automated ML and AI capabilities. They can reach into data sources like your Dynamics 365 ERP as well as other business systems, including planning software, third-party logistics, supply chain notification tools, or even news sources and weather reports. While they are part of the Dynamics 365 solution family, you don’t necessarily have to have the full ERP system deployed in order to benefit from Intelligent Order Management and Supply Chain Insights. Without undergoing a lengthy ERP deployment project, you can deploy and configure the solutions quickly and receive the data insights you’re looking for now. You can continue to modernize your business technology at your own pace.
Intelligent Order Management focuses more on the customer experience side of distribution. You can work with Intelligent Order Management to automate fulfillment and optimize order flows with real-time inventory data. You can anticipate and forestall potential disruptions by reconfiguring order flows and managing the entire order lifecycle based on current information. In addition, you can boost the quality of the customer experience by improving your on-time delivery rate, becoming more flexible as customer needs change, and always being able to provide reliable answers to their inquiries. The solution’s dashboards present data and decision options in an action-ready format.
Supply Chain Insights, on the other hand, helps you make decisions related to vendors, logistics services, and other supply chain elements that are usually invisible to customers. The solution sheds a bright light on conditions and events to do with your suppliers—including the dependencies of multiple tiers of suppliers’ vendors. You can sooner take the initiative in working with your vendors to resolve potential delivery delays or shortages or explore other avenues for sourcing products. Taking a page from a still-recent innovation in manufacturing technology, Supply Chain Insights allows you to create a digital supply chain twin, which you can use to run what-if simulations and model the impact of decisions and changes. The AI built into the solution makes data intelligible and insights actionable, so you can continue meeting customer needs even when supply chain constraints loom.
Data intelligence becomes standardized and immediate
Sikich distribution clients have expressed a lot of interest in Intelligent Order Management and Supply Chain Insights. Our technologists are incorporating them into HeadSTART, our approach to achieving fast, outcome-driven Dynamics 365 deployments. The complete ERP model in HeadSTART will be enriched with a wealth of data insight functionality. The processes in HeadSTART, standardized on industry-best practices, usually meet at least 80 percent of distributors’ requirements for ERP. Following these additions, HeadSTART can also satisfy the lion’s share of their data insight and visibility needs. Dynamics 365 already includes many flexible, easy-to-use AI and ML capabilities, for instance, within the forecasting and inventory modules. With Intelligent Order Management and Supply Chain Insights, you can expect to see a more valuable business contribution from practical, distribution-optimized AI.
Distribution is probably the industry that is most impacted by the ongoing pandemic and supply chain disruptions. The Sikich supply chain and distribution teams work as quickly as they can to help clients find answers to their most pressing questions. Now we can use state-of-the-art analytics technology applied to a company’s data sources without first implementing an ERP solution. In time for their next sales campaign, for instance, you can see which customers or market segments are most profitable, which vendors offer the best quality, or which emerging customer needs you should start solving now, so you can promptly deliver at the moment of demand. With our expertise and the Dynamics 365 tools, we can help you greatly reduce the time elapsing between a business question, a meaningful answer, and the right next step.
Here to help
If you are interested in using transformative technology to take advantage of your existing data and grow your distribution business, Sikich is ready to get to work for you. Get in touch with the Sikich team.
- Read other recent posts on distribution themes:
- Enabling a sustainable, compliant distribution operation
- Inventory and vendor management as competitive advantages for distributors
- Infographic: Thrive in challenging times – 5 areas of focus for distributors,