As distribution companies grapple with global supply chain challenges, many Sikich distribution clients have seen an opportunity to reinvent their businesses. They find new ways to ensure that customers are satisfied and loyal, simplify processes, launch new products and services, and accomplish more with greater data intelligence. They are also rethinking their partner networks and relationships and asking questions about the real value of their investment in engagements with vendors, logistics providers, services firms, and distributors large and small. In today’s article, we consider two key elements of managing your partner network—ensuring visibility and making it compelling for companies to work with you.
Reinvent partner relationships
When Sikich distribution clients are interested in boosting the returns from their partner networks, our distribution and supply chain consultants work with them to assess the current state of their partner ecosystems and help define the best strategy for managing them to support their goals. Executives in various companies may describe their concerns in similar terms, but their businesses are highly individual in the challenges they experience and the solutions that make sense for them.
For example, a generally sound, high-level concept like building resilience into supply chain and distribution processes can mean very different things when it comes to specific process optimizations and technologies. Similarly, many distribution companies aim to reduce their dependency on geographically remote or exclusive providers and thereby mitigate supply chain risks. In doing so, they usually have many possible options for connecting with partners that are based in the regions where they do business and which promise reliable delivery. Distributors then have to make wise decisions and manage the new partner relationships to support their objectives.
Finally, more distributors are engaging with very different partners and need to have the nimbleness to translate these diverse relationships into business results. For instance, when it comes to collaborating with a global retail or ecommerce leader, they may have to comply with business rules that prescribe inventory levels, delivery methods, or aspects of the customer experience. On the other hand, when collaborating with a supplier of products or parts, the quality, timeliness, and ease of doing business may be what matters most.
Create partner visibility from data you own
Bringing visibility into every part of the distribution business is particularly worthwhile when industry, sociopolitical, and climate events can suddenly and dramatically impact supply chains. Using readily available information they already have, sometimes augmented with new data sources, distributors track shipments and containers more closely and in real time, observe and boost the performance of warehouse locations and processes, and drive improvements in the customer experiences they deliver. They will also own a wealth of data pertaining to trading partners and suppliers, like the dollar volume of the business, product quality ratings, on-time delivery performance, returns, repair needs, margins, invoicing errors, rebates, and more. All of these data points together can help distributors answer such questions as whether they should choose one partner over another for a more in-depth engagement, whether dealing with a geographically close supplier is paying off, or whether it’s advisable to spread the business among a greater variety of trading partners.
However, in many distribution companies, partner-related data resides in multiple sources and repositories, and some of it may only be available to certain business groups. When we work with clients to replace disparate software systems with a consolidated management platform—most often, a cloud ERP solution like Microsoft Dynamics 365—they immediately gain a centralized source of business information. We often integrate with ERP specialized software tools that support key areas of the distribution business and which companies want to continue using, so data from these systems becomes part of the same system of record.
Creating Business-wide Visibility
Once all your business workflows take place in the same software environment, it becomes easier to manage relationships, communications, and commitments with partners efficiently. Data and documents are securely available to authorized business users who need to work with partners or make decisions about them. Dynamics 365 already supports standardized vendor scoring metrics that provide insight into the performance and business value of partner relationships at any moment, as well as historically. For many distribution clients, Sikich consultants also use Power BI and other Microsoft tools to create reports and dashboards that present key aspects of a company’s partner experience in a meaningful, intuitive format.
These analytics and reporting tools can help you gain insight into individual partners as well as the ROI and business value of your entire partner network. Equipped with that visibility, you can have productive partner conversations or make changes in your collaborations. Data evidence may contradict anecdotal, highly credible observations from your team members regarding such measures as engaging a distribution partner for certain high-volume products or working with a services company to provide repairs and customer support. You may want to consider both, but data-driven insight can deliver an essential reality check without which you might take potentially damaging risks in your partner engagements.
Business-wide visibility can ease compliance with business rules imposed by large distribution partners (like Amazon and Walmart, to name a few), so you can continue to benefit from their market access. For instance, if you must maintain certain inventory levels, respond to customer inquiries within a certain timeframe, or commit to specific delivery schedules, you can assess these conditions in real time, using the dashboards and insight tools in your ERP environment.
Be the company partners prefer to do business with
To serve your customers best, you will want to collaborate with the most competent and innovative partners you can find. If they are as good at their business as you need them to be, they will evaluate your organization just like you review and assess them. Of the many companies they could work with, you want yours to be the favorite that is always treated well. It’s in your best interest to make it easy and profitable for partners to do business with your company.
Many distributors find that a web portal for their vendors and trading partners can make a big difference in fostering mutually beneficial engagements. Microsoft Dynamics 365 comes with a secure, ready-to-go portal, and we can help you refine it with the capabilities and experience quality you want to provide. Partners can access the cloud portal anytime, and it may also make it easier for you to scale processes if you add more partners to avoid unhealthy dependencies. Both partners and your own team members can save time and efficiently handle routine business activities, using the portal to deliver or download product documentation, manage billing and invoices, or review the status of shipments in transit.
When it’s time to onboard new partners, they can manage the process on their own through the portal, where they can record information and submit documents. By means of the portal, you can also share training content, enabling your distributing partners to market and represent your products effectively.
When companies require electronic data interchange (EDI) communications to make certain they can keep interactions efficient and fast-moving, Sikich will integrate an EDI module with your Dynamics 365 system. We use a proven, widely used EDI solution that works organically on the Dynamics 365 platform without increasing its complexity. We can also help you simplify and error-proof the business reporting that large trading partners may request.
These technology tools and others, like Microsoft Teams for conferences, chats, and collaborations, can help you minimize the administrative workload of managing partner relationships and strengthen the focus on the transformative and innovative goals you might share with them. During pandemic-induced and ongoing supply chain crises, many of our distribution clients have overcome tough challenges and seen spectacular successes. They have entered new markets, innovated profitable products and services, increased their revenue, empowered their workforces to thrive, and made their business processes more productive. Your partners will love a success story that inspires them and sets a great example. This may be the best time to realize your most ambitious and innovative goals instead of retrenching like many companies do. Technology can be your enabler in achieving them.
Here to help
If you are interested in using transformative technology to improve and grow your distribution business, as well as managing partner networks, Sikich is ready to get to work for you.
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