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The Upside of a Downturn in Wholesale Distribution

The Upside of a Downturn in Wholesale Distribution

As a result of COVID-19, the slow economy means some down time for many wholesale distributors. Now is the time to invest in people and systems that will help you get through the current difficulties and position your company to profit from the rebound that is sure to come.

New intelligent enterprise technology can assist wholesale distributors in getting through future difficult economic times. Distributors can leverage functionality that allows them to become easier to do business with, promoting customer loyalty by making the entire ordering process easier. New system capabilities can also help distributors buy better, letting them take advantage of every possible supplier discount, and assisting them in tightly managing   the collection of vendor cost recovery from suppliers. Additionally, new intelligent enterprise technology can enable distributors to operate more efficiently, replacing low value activities with ones that provide greater business benefit.

Taking advantage of new intelligent enterprise technology is not new to the wholesale distribution industry. Many distributors have already put new intelligent enterprise technology in place to drive superior performance and profitable growth. For others, however, the timing has not been right to improve their systems. Implementing new systems can be temporarily disruptive and requires some of the best business people   to be on the project. As most distributors run their business with lean headcount, high operational demands during bullish economic times often prohibits them from investing in new systems.

The wholesale distribution industry is full of some very adaptive and loyal companies. During tough times, they do not often have major layoffs, as they prefer to retain experienced employees needed when sales volumes pick up and growth begins again. Their opportunity to retool is now, during this economic slowdown. They can take advantage of this slower period to place experienced “subject matter experts” on projects, virtually, that will help pave the way for profitable growth in the future. Following a new system implementation and post “go live” tuning, many employees who were on the project get redeployed back into the business, adding new strategic business experiences to their existing tactical operational backgrounds, increasing their value to the company.

When COVID-19 passes and economic growth begins again, distributors with new enabling intelligent enterprise technology in place will be prepared to grow profitably, not just grow. The digital distributors who can leverage new industry-specific solutions will have a competitive advantage over traditional distributors who must continue to rely on dated and disparate systems.

Traditional Distributor Digital Distributor

Volume driven

Division redundancies

Customary products

Multiple touch points

Supporting old systems

Margin focused

Shared services

New products and services

One face to the customer

Platform for future state

In this economic downturn, traditional   distributors face the challenges of streamlining operations, enhancing efficiencies, and reducing overall costs. Midsize and smaller distributors are additionally constrained by time, budgets, and resources. That’s why SAP offers a wholesale distribution–specific, preconfigured intelligent enterprise solution to support business agility. By clearly defining how the software will behave for standard wholesale distribution business processes (such as SAP Model Company for Wholesale Distribution), system implementations are streamlined, minimizing business disruption and cost, and maximizing enterprise-wide adoption and benefit.

Imagine if your intelligent enterprise technology could efficiently support business growth of the future with wholesale distribution-specific functionality not generic technology, effectively execute on business decisions made from current information not latent data, and rapidly adapt to new business requirements by changing process rules not software code. SAP intelligent enterprise solutions today deliver on all three of these requirements. Now is the time to virtually take advantage of this economic downturn to prepare your wholesale distribution business for a prosperous future. Need inspiration for your organization? Learn how Brakes Foodservice and Al Dahra found the upside of the current downturn.

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  • Excellent overview of the traditional versus digitial distributor. During this “COVID Compression” I see effective wholesalers defining services and processes that pivot them to the digital world.