From manufacturing data to inventory and sales information, many wholesale distributors have access to more data than almost any other business. However, many distributors are not analyzing and optimizing their data to achieve a strategic advantage.
Many corporate executives and managers are often too pressed for time to learn how to use complex IT systems or to generate detailed analyses on business activity. However, today’s advanced technology has developed quality solutions that are affordable, deployed quickly, and are easy to use. In today’s blog, we will discuss how distributors can use distributor analytics software such as business intelligence (BI) to reduce costs and increase profitability.
Invest in the latest software
As businesses grow and change over time, their data analytics needs to grow and change along with them. Distributor analytics software has seen a massive evolution over the last few years. As a result, companies now have access to highly-interactive analysis and real-time insights that are accessible to all users across all departments. Today, distributor analytics software has gone from being a secondary function to a vital tool for gaining a strategic advantage. As your competitors start embracing analytical tools that give them the competitive advantage, it automatically means you are losing yours. Moving forward, as wholesale distribution leaders, you must consider making the investment in this technology.
Distributor analytics offers you an easy way to increase profit
While most distributors have customer sales records in their ERP systems, distributor analytics software provides you with the ability to identify new sales opportunities.
First, get a clear picture of your customers. With distributor analytics software, you have the ability to view your customers by profit, product, sales value, and then compare sales over time. By identifying which customers are not buying certain products, you can tailor your sales and marketing strategies to recapture waning sales. With distributor analytical software, you can develop each customer’s profile and sales potential without the need to know your way around Excel or complex legacy systems.
Second, increase your profit margin by optimizing operational processes. For instance, distributor analytics software for inventory management enables you to closely monitor things like inventory-to-purchase ratio, stock turns, and slow moving stock. It quickly enables you to identify common inventory concerns. For example, minimize the likelihood of overstocked products by examining historical sales trends and comparing that data to the stock on hand. Understocking can also be curtailed by identifying the average time it takes to source a product. When you can detect long lead times from suppliers, you can ensure you purchase enough stock to fulfill customer orders.
Finally, reduce the possibility of a warehouse full of dead stock by sending products to another branch where there is a market or by running a promotion to move it quickly. With a quality analytics tool like Phocas, you no longer have static reports and can query as needed to streamline your operations to reduce costs, thereby increasing your overall profit.
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Distributor analytics software gives you a better overview of your distribution business
Department managers often generate reports that only examine the type of data relevant to their domain, e.g. sales data. While this isolated look is useful to those departments, it is critical that CEOs know the overall state of their business. Distributors are now able to gather substantial insights into their business that were previously undetected. As Michael Smith, the director of Johnston Companies, said, “I had found items that didn't have the margin I was expecting, customers that didn't have the profitability I was expecting and vendors that weren't performing the way I expected. I realized that we were onto something that would be very impactful to our business."
With dashboard functions in Phocas’, you can maintain an up-to-date view of important key metrics. This information reflects the most current data which can be drilled down even further for even more enlightening insights. With accessibility on mobile devices, you and your team can make critical decisions while out of the office. By imputing your key performance indicators (KPIs) into your dashboard, you can continuously monitor the metrics essential to your success.
More insights into supplier and customer behavior
While distributor analytics software does not allow you to manage other businesses, it does let you analyze them. For instance, you can analyze the time it takes suppliers to fulfill orders, see trends in orders delivered in full vs. partial orders, and examine orders based on product type, brand, or even region. This gives you leverage for negotiating better deals for your distribution business.
Likewise, you can analyze what your retail customers are ordering and compare this with similar customers. You can share this data with your customers to inform them of other winning sales strategies. This, in turn, can increase your orders. Additionally, with a clear picture of your customers’ buying patterns, you can divide them by preferences, demographics, and other features to tailor your queries. This analysis enables you to make more strategic decisions around your customers.
At the heart of the wholesale distribution business is managing costs and increasing profitability. With the massive amount of data available today, wholesale distributors can garner a huge rate of return on the investment of a quality distributor analytics tool like Phocas. Armed with actionable data, you will make the most of resources, identify new sales opportunities, and improve operational efficiency to decrease costs. This empowers you to make a significant impact on your bottom line.
To see how Phocas can help your wholesale distribution business achieve a strategic advantage, download your free eBook: Distribution Analytics Software: 6 ways to compete and grow by clicking the image below.