Working in the distribution industry is a tough racket, and for small-to-medium operations, trying to survive and thrive can be a tall order. This isn’t because smaller businesses like yours aren’t up for the task — far from it. In order to get to where you are, you’ve had to be scrappy with your operations and clever with your spending.
There’s just one not-so-little problem: the superpower of massive distributors such as Amazon or Walmart. Their size and variety of offerings make them a cause for concern for smaller operations. So much so that when weighing other general threats like fluctuation in the economy, lack of competitive strategy, and limited access to “top talents,” distributors called out Amazon’s existence as being the biggest threat of them all. Despite this, 52% of distributors say they don’t have a strategy for competing with the mega-distributor. Isn’t it time that changed?
It’s time to lace up those gloves and get back in the ring. You’re Rocky, and we’re doling out some pro tips on how to keep the big guys of distribution on their toes.
In order to give industry giants a run for their money, you have to find places to excel where they can’t meet you. In this case, it’s in offering consistency across your order-to-cash cycle. Where they use a meat cleaver, you can use a scalpel to offer precision and detail in a way that they simply don’t have the capacity to match. Let’s look at two major areas where you can beat out the competition by honing your operations to perfection.
In this case, your business’ smaller size has a big advantage. Since you don’t have to worry about keeping up with hundreds of thousands of orders, you can dedicate quality care and time to each individual order. You have the ability to give all of your customers the attention they deserve. In order to deliver customer service that stands out, you need every employee to understand a given customer’s story, even if it’s the first time they’ve interacted with them personally.
The best way to achieve this is by creating an information hub for each of your customers. You need access to historical data, such as past ordering history and payment information, but you should also push beyond the quantitative. Something as simple as being able to keep notes on a customer’s file can go a long way. You can track any past issues they’ve had, note their preferences, and get an overall idea of who they are beyond the numbers they represent.
Order shipment & tracking
In order to stack up to bigger distributors’ resources, you need to sharpen your shipping operations as much as possible. The shipping and delivery process is so much more than “did it arrive?” You want to inspire confidence every step of the way. In the order-to-cash management cycle, your shipping operations should begin the moment an order is picked.
With the help of some handy integrations and well-placed automation, tracking information writes directly to your sales documents. By getting this information earlier in the shipping process, you’re offering your customers a whole new level of visibility over their orders. It also saves you from having to collect information manually further down the line.
Once your orders are on the road, offering detailed tracking is a must. Your customers need to know more than an estimated date of delivery. If possible, you should offer checkpoints throughout the shipment process. This is where you’ll need a little more than streamlined processes — you’ll need the right tools.
We suggest investing in mobile devices for your delivery drivers. We’re all for minimizing costs where possible, but this tool will pay for itself in no time. You can be in direct contact with your drivers at any given moment, meaning there’s constant visibility over the location of your orders. It also comes in handy if you need to make adjustments on the fly. Maybe you need to change up a route or switch drivers. With mobility on your side, you can do it all with no hassle.
Get to know your own distribution operations
You’re probably thinking that this is a moot point. Of course you understand your operations — how could your distribution company function otherwise? However, getting familiar with the way your business runs is much more than understanding your everyday workflow. It also means analyzing the patterns of your operations to help you anticipate future demand, or create well-informed strategies that fuel your company’s growth. If you really want to make yourself competitive, you have to be able to look at big picture changes, outside of your operational function. Here are a few examples:
Strategic warehousing layouts
When looking to take your efficiency to the next level, it’s always a good idea to reassess if your warehouse layout is motivated by strategy and not just convenience. A poor warehouse layout can be a huge source of wasted time. Consider the picking process alone — the layout of your warehouse heavily influences how easily your workers can get to the right products. Ask yourself: Is every shelf labeled to allow your employees to easily find what they need? Do you have your more popular products closer to the front, so they’re easier to access? What was your motivation when you determined how many aisles your warehouse has?
If you haven’t considered these things before, you’re not alone. And you certainly won’t be able to find the answers overnight — it takes time and experience. Consider how your warehouse workers navigate this space, what areas cause frequent hang-ups, and why. Use this information as a guide for deciding a new layout.
Best-sellers and money pits
We can’t talk about looking at the big picture without bringing up demand trends. If you aren’t already, you should regularly run reports to help you determine your standout products. By determining which products move in and out of your warehouse most frequently, you can prioritize ordering those products and add some safety stock to ensure you’ll never run out unexpectedly.
Getting an idea of which items aren’t selling as well can also help when it comes time to update your catalog. If you’re spending money stocking products no one is buying, it might be time to retire that product. Either way, you’re updating your processes and avoiding wasting money, which are great ways to run lean and play to your distribution company’s strengths.
Keeping yourself competitive in the distribution world
It may take a few “back to the drawing board” moments and a whole lot of research to go up against the big guys, but it’s not an impossible task. A few well-placed operational strategies can make a world of difference. If you’re persistent with your improvements, you’ll eventually see big changes, which means growth and advancement for your company.
As your operational outlook gets bigger and brighter, you’ll need a software solution that can keep up. You don’t want to outgrow your system only a few years after implementation. You need a flexible solution, and one that allows you to personalize how you manage your order-to-cash cycle. Now get back out there, and start making those industry titans nervous.