Why the Future of Distribution is in the Cloud?

These past two years have been a frenzy, and the manufacturing industry underwent transformations and upgraded learnings. Manufacturers are in the midst of digital transformation, facilitating innovation, improving processes, and driving productivity.

Distribution Management Systems are integral for consumer goods companies. Distribution management systems enable tracking the movement of goods, warehousing, logistics, and inventory management.

Many manufacturing companies have integrated an enterprise resource planning (ERP) system into their workflow, but now companies are looking beyond basic ERP capabilities; cloud ERP can give a company a distinct competitive cloud distribution system.

Here are reasons why the retail industry needs to consider switching to cloud Distribution Management Systems to bring more revenue and better customer delight-

Integration – The cloud facilitates the integration of supply chains and data streaming from IoT-enabled production, easy migration of data and information across other cloud environments. Given appropriate governance and setup, teams can access data at any point in the supply chain and get an update on the movement of goods. The disjointed nature of the supply chain allows the cloud to optimise product manufacturing, distribution, and service delivery to ensure fast and effective processes.

D2C Model and Consumption Pattern – The pandemic moved consumers to easy shopping options. The direct-to-consumer model decimated the 3 tier distribution management system in the supply chain by eradicating the need for distributors, with consumers shopping directly from the manufacturers. The increased accessibility to products online has caused bleeding in the traditional distribution management system.

With these changing patterns, companies have to move fast. To improve sales, they need to understand market trends and supply the right products at the right stores, adding another reason to switch to Cloud Distribution Management Solution to navigate these challenges.

High standard of customer service – Businesses now like to share information with customers accurately and instantly. Teams can access information from CRM, ensure timely information on order status and customer journey feedback and offer apt solutions basis customer classification. A cloud ERP system combines back-office information with customer-facing departments, ensuring everyone is on the same page.

More control over distribution:  Traditionally, consumer goods companies have leveraged strong supply chains to ensure their products were on every stand in every retail store. The pandemic has made it difficult for companies to ensure their products are adequately stocked. Companies can centralise their sales and distribution by going direct to consumers and reducing their reliance upon third-party distributors.

Production Shortages – Rising costs of raw materials and labor shortages have impacted production line movements, impacting company sales and generating the need for advanced reporting and analytics.

This will help manufacturers forecast and produce needed quantities to minimise wastage and reduce stock-in-hand. This information mitigates risks involved in supply chain operations.

Logistics – The pandemic continues to affect shipping and logistics across countries, especially China and South Korea. The wave passes onto all levels of the supply chain causing products to expire due to delayed transit which is a loss to the manufacturer. An integrated cloud distribution system will help track, locate and plan deliveries while improving the overall user experience for clients.

Declining Sales – European data shows that sales declined 2.1% in the last few quarters, which was 5.7% higher than in 2019 due to a reduction in hoarding. Rising prices and global inflation have impacted sales, forcing manufacturers, distributors, and retailers to reduce their margins to sustain their business. Technological advancements can predict and even prevent losses with a Distribution Management system with built-in Artificial Intelligence that feeds customer behavior data from the internet into the DMS system, helping improve sales in the future.

As more SMEs and large-scale businesses adopt cloud ERP, Dynamics 365 Commerce is making it possible for businesses to launch e-commerce sites to start selling directly to customers. Investing in technology helps scale businesses, preparing them for the future to help them prosper and thrive. Want to learn more? Contact us to find out how we can help you position and automate your business as the channel evolves.