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The traditional role of wholesalers is quite simple; they buy significant quantities of products from different manufacturers, store them in warehouses and resell them to customers, whether retail, industrial, commercial, institutional or contractors. Their role is to have the right product when it is needed, at the lowest price. Pretty simple.

 

That was all good in the past, but now things are changing — and changing fast! In the last 5-10 years, companies like Amazon, Alibaba and eBay have completely changed the dynamic of the shopping experience. Consumers now expect to find what they need easily, at the right price, with high quality, delivered to them where they need it, how they need it and when they need it. And, although consumers can be quite loyal (for example, always starting their search on Amazon.com), they will quickly go somewhere else when they don’t find what they need. How do I know? I do it all the time!

What does this mean for wholesalers?

It means that wholesalers need to adapt and become more flexible or they will be left behind. Customer expectations are rising – merely providing products at low prices does not cut it anymore. They are looking to their wholesalers for more: they expect special treatment, they want value-added services, and they want their shipment packaged to their needs and delivered where they need it at the time they need it.

 

For example, think of a contractor ordering electrical products and needing them at multiple locations on a job site. That’s one order with multiple items that need to be delivered to different locations, even on different floors of the same building, and these deliveries have to be clearly identified and routed appropriately. For wholesalers, this means that processes in the warehouse where these products are coming from better be flexible, otherwise a lot of manual and costly interventions are going to be needed to pull it off OR expectations are not going to be met and the contractor may choose someone else the next time.

Don’t be afraid to charge for services

Interestingly enough, it seems like today’s customers are willing to pay for the additional services they ask for. Just like Third-Party Logistics (3PL) companies are expected to provide value-added services, wholesalers are now expected to do the same. Not only will wholesalers need to have the people and the systems with the appropriate capabilities in their warehouses, but they will also need to have the capability to capture the cost of such additional services in order to be able to charge accordingly.

Explore new partnerships

Another trend for wholesalers centers around collaboration and potential consolidation of the industry. Producers/manufacturers are trying to align themselves with fewer business partners than in the past, selecting them based on their capabilities, their reach, and (especially in the case of wholesalers) their ability to become more than just a distributor of their goods. To keep up, wholesalers need to explore new partnerships with their customers, suppliers and other potential solution providers.

Invest in distribution tools that can change with you

In order for wholesalers to respond to today’s demand from their customers, they need to have the right tools and the right systems in place. Demand Planning, Analytics, and Supply Chain Execution systems like WMS and TMS with complete function and feature sets are necessary for wholesalers to become more than just distributors of goods. Since change is constant, these systems have to be flexible, built with capabilities that can be easily extended as needed, when needed, and at a very low cost.

 

Increasing demands from customers is very challenging for wholesalers today, and at times it may seem to them that their existence is threatened. But at the same time it is creating a wealth of opportunities that will be very beneficial to them. Wholesalers that embrace the changes and undergo the transformations they need to make to serve today’s customers will be well-positioned to benefit from them.


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Source: MIT Sloan Management Review

In my last post, I introduced the longitudinal study that MIT Sloan Management Review has been conducting over the past five years. From 2010 to 2012 they indicated that 67% of those surveyed believed that analytics gave their organizations a competitive edge. In 2013, that figure stabilized at 66% revealing the so called ‘Moneyball Effect’ where leaders lost their competitive edge that they once enjoyed because followers matured and made analytics core competencies. In 2014, that trend continued, falling to 61%.

 

But why?


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By now, most of you have probably heard of, or read, the book entitled Competing on Analytics by Thomas Davenport that demonstrates how some of the most successful organizations in the world have made analytics a core capability and integral to their strategic planning. MIT Sloan has been tracking this phenomenon since 2010 echoing Davenport’s findings. From 2010 to 2012 they indicated that 67% of those surveyed believed that analytics gave their organizations a competitive edge. However, in their last installment of their longitudinal study, something interesting happened. Something that I like to call the ‘Oakland Athletics Effect’.

 

Findings from the annual MIT analytics study


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Big data is all around us.  As we have seen, big data is characterized by its volume, velocity, and variety (the infamous three ‘V’s).  Great, you have a lot of data…now what?  Well, these untapped ‘dark data assets’ give rise to vast opportunities for those organizations that seek new ways to compete.  Studies have shown that organizations that compete on analytics by focusing on their core competencies fare much better than those who do not.  Some have gone so far as to call big data the ‘new oil’.  In part two of this four part series, we will take a closer look at big data analytics.

 
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With the advent of big data, organizations are beginning to recognize the impact that big data and analytics can have on their ability to compete in their respective industries.  In a recent study by MIT and the SAS Institute, 67% of leading organizations firmly believe that analytics give them a competitive advantage.  This recognition has revealed that it is not only about the volume, velocity and variety of the data at hand, but having the right culture, skillsets, and technologies in place, while respecting the privacy of consumers.  This post will be the first of a four part series aimed at demystifying the term ‘big data’, and touching on opportunities, implications and challenges related to big data.


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In my July post, I introduced the ‘Hierarchy of Supply Chain Metrics’, which is a framework of supply chain metrics conceived by Gartner, the world’s leading information research and advisory company.  The model provides 3 tiers of integrated metrics to assess, diagnose, and correct supply chain performance, and is a great example of what constititutes a supply chain scorecard.

 


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It has been said that you can’t manage what you can’t measure.  In the world of analytics, this is our daily mantra.  However, as succinct as the  statement may be, you can’t help wondering if it is missing something;   a little something called perspective.

 


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Since 2010, Gartner, the world’s leading information technology research and advisory company, has been publishing an annual report entitled ‘Gartner Supply Chain Top 25‘ which ranks organizations that demonstrate leadership in supply chain management.  In each of these reports, the ‘Hierarchy of Supply Chain Metrics’ is positioned as the ideal set of metrics to measure supply chain operational performance.  To emphasize Gartner’s stance, the subtitle reads: ‘The Metrics We Wish We Had’.


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Having been involved in the development of a pan-Canadian Electronic Health Record, I have a keen interest in how healthcare benefits from standardized policies and technologies designed to reduce healthcare costs and improve patient outcomes and safety through improved synergies and efficiencies.  My interest also extends to the hospital supply chain.  With inventories representing @ 30% of hospital costs, second only to labor costs, there are huge gains in organizational performance that can be had through better supply chain management.


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