New York, NY (PressExposure) January 05, 2010 -- As bad as the holiday season may have been for retailers, distributors faced even tougher problems as retailers took additional measures to safeguard losses, such as ordering less from distributors and keeping inventory levels low.
To survive, distributors must provide a lower cost to their customers. SMC Data, a New York based firm that helps distributors to lower their operating costs through the use of technology, has several recommendations.
First, a better understanding of customer needs can produce a huge advantage. Some of the better ERP software packages have forecasting systems built right into them. However, many distributors donât have forecasting capabilities or arenât making use of the ones they have.
In addition to analyzing buying habits of customers (which may change radically in a changing economy) forecasting systems can also look at consumer trends (i.e. include some data on your customerâs customers). Also, when a distributor understands the retailerâs business model, it can better accommodate the retailer and actually help the retailer avoid problems, such as overstocking.
Another opportunity for a distributor to help retailers (and thus set themselves apart from other distributors) is to provide retailers with a better accounting of inventory by using RFID (Radio Frequency Identification) scanning devices. These devices provide immediate inventory reconciliation and provide retailers with data in real time. RFID devices allow retailers to track what items need replenishing and allow distributors to get a less labor intensive (and more accurate) inventory management process.
Another tactic smart distributors are using to save money and help their retailer customers, is cross-docking. With cross-docking, incoming materials are loaded directly onto outgoing trucks as soon as they are received. Cross-docking works in conjunction with RFID devices and Warehouse Management Software (WMS). By cutting down on unloading and reloading time, the distributor saves time and money for themselves and their customers.
By using some newer technologies, such as modern forecasting, RFID scanners, and Warehouse Management Software (WMS) with cross-docking capabilities, distributors can improve efficiency, cut costs, and provide better service to retailers. In a down or changing economy, these strategies not only save costs, but may be crucial for survival.