Distribution in the Age of Connected Intelligence

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Over the years, technology has had a profound impact on the way that people live, work and interact with the world. The digital disruption has also led to far-reaching changes in the way businesses are run, not just in traditionally tech-savvy sectors such as IT and BFSI, but also in sectors such as agriculture, food processing, and CPG. Just like other areas, supply chain and distribution operations are also in the midst of a digital transformation.

Distribution is getting more complex than ever before. Increasingly, the efficiency of the distribution has an impact on an organization’s top-line growth too. A study by Deloitte found that 79 percent of organizations with superior distribution capabilities achieve above-average growth, while only eight percent of those with lower performing distribution have above-average revenue growth.

One of the biggest parameters for running a superior distribution today is the ability to use data better. With digitization, the huge amount of data generated from the business, customers, and partners can be leveraged to streamline distribution operations. Digitalization brings several huge benefits to the distribution operations and consequently to the organization. Operations are faster overall, complexity is reduced, and lead times are shorter.

These trends below indicate why digitalization is now critical for the distribution networks.

Global Supply Networks

As operations become global, the need for data and information is bound to go up manifold. Each country, each city even, has its own local systems and quirks that have a direct impact on how fast paperwork is done, unloading and unloading is done for example. Real-time data on weather conditions, port traffic, etc. play a major role in planning. Insights based on this data are important to achieve optimum planning leading to an efficient global distribution network.

Dynamic Environment and Automation

Given the volume of data required for decision making in real-time, automation becomes more important than before. We live in the age of hyper-connectivity, which means that there is access to all types of information, which can help plan a more robust and responsive distribution. As goods get increasingly commoditized, the emphasis on service quality and delivery increases. Real-time information on shipping status, pricing updates, regulations etc. can enhance service quality.

As the whole world becomes more connected, visibility into orders, inventory etc. becomes more important for all the parties involved, whether suppliers, customers or distributors.

Smart goods

Today, all components of distribution are smart and connected. Individual boxes and even each product can have smart tags that allow us to track not only their exact location but also the conditions under which they are stored (such as temperature, humidity, pressure etc.). Not only are such data points used to ensure that product quality remains top notch, but it is also important as a tool for dispute resolution in case of spoilage etc.

Taking a fragmented approach that looks individually at each participant in the distribution is not the best way to achieve a superior distribution. Instead, looking at it from a holistic view as a unified process is the way to go. A robust platform that brings all the entities such as your business, your customers as well as your suppliers on a single page is the only way to achieve this. Take a look at our Modern Distribution and view case studies on how some of our customers achieved the path to digitization.

https://www.sonata-software.com/modern-distribution/

Karthikeyan Rangarajan

Article written by

Head-Distribution Vertical, Sonata Software

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