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How to achieve distribution optimization with data and analytics

Mar 07, 2023

As distributors begin to automate systems and collect more data on everything from customer demographics to shipping times, they require more capability to analyze that data. Where a pivot table in Excel used to be enough to report out sales variances or trends, you now need something that not only processes more data, but also draws data from multiple sources to ensure you have good insight into cause and effect or correlations.

The right data analysis tool can help give you that capability. It allows you to analyze the full picture of your business, rather than working with independent snapshots.

Here are some of the ways upgrading data and analytics can help improve your distribution optimization:

Be proactive instead of reactive

If you’re still generating canned reports about your performance at the end of every month, you’re missing opportunities to be proactive with your information.

Data transformation tools help you analyze data in real time, giving you the ability to adapt quickly to important trends or changes.

You can look at customer buying patterns as they happen, helping you to make more strategic inventory purchases. They can also generate predictive models around customer or vendor behavior, helping you prepare to meet demand and evaluate your vendor reliability.

Gain insight into your distribution challenges

Data analysis gives you greater visibility into your business, which enables you to not only identify challenges but also get to the root of them.

With distributors, even minor delays can negatively impact value streams. Data analysis can help you see the source of your delays, whether it’s challenges in consolidating, picking or resourcing. You can even focus in on data for individual items in multi-item orders.

It’s also easier to analyze shipping and identify potential bottlenecks. This will help you minimize delivery times, both in receiving and order delivery.

Create a better customer experience

In addition to helping better manage inventory to meet customer demand, data analysis can also help you craft a better customer experience. The right tool can help you create a more seamless ordering experience, where customers can find what they want and see accurate information about stock and delivery times.

In your online store, you can use data analysis to create recommendation engines for customers. These algorithms look at what customers have ordered in the past, or what similar customers have purchased, to make recommendations.

You can also use geo analysis to better understand where your customers are located. This data can help you see where to concentrate your marketing efforts, whether that’s on existing customers or potential new markets. And it can help you better strategize delivery routes and forecast shipping times.

Create a better employee experience

Businesses that are leveraging data can also create a better employee experience.

In the distribution industry, it’s common for a business to rely heavily on the wisdom of senior employees and leadership. For example, instead of using an addressing system, a single individual may be responsible for knowing where inventory is placed in your warehouse.

But if all the important knowledge about your inventory is concentrated within one individual, how will your business cope if they leave or retire? And how can your other employees effectively make purchases or fill orders if they don’t have easy, immediate access to the information they need to do their job well?

Data provides better information visibility and availability to all end users. This helps empower employees at any level to make business decisions, since they no longer have to waste time and effort sourcing information. And it can make onboarding new employees easier by giving them access to information they would’ve otherwise only gained through experience.

How Wipfli can help

At Wipfli, we understand the challenges that distributors face, from supply chain uncertainty to increasing customer expectations. We’re here to help support your business by offering a fresh, holistic perspective. Contact our team to find out how we can help you better analyze data, optimize your warehouse, manage your inventory and more.

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Kate E. Brown
Senior Manager, Technology
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