Four Ever-Present Challenges for Manufacturers and Distributors

Challenges Manufactures Distributors

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The COVID-19 outbreak has put a variety of challenges on the supply chain. But for many distributors and manufacturers, this was just one in a long string of complications and challenges that exist in the current market.

As highlighted in a recent IDG report, the market has been increasing in complexity for years, and here are four ever-present challenges you will need to address sooner rather than later. Following our blogs discussing the ways the market is becoming more competitive and the opportunities that exist in building a lasting business, we would today like to discuss some of the common challenges you may face along the way.

Supply Chain Globalization Has Increased Complexity

One of the most well-known trends in the product-focused industry has been the continued push towards globalization. For manufacturers, the trend is pronounced—80 percent of respondents to a Capgemini study expected to have multi-country operations. For distributors, this means you are securing products from an increasingly diverse network of suppliers and sending products to an increasingly dispersed customer base.

Understandably, this does have its benefits. In a normal operating environment, you have better access to products at prices that work for you. But it also exposes you to risks and challenges. Now, instead of collaborating with a partner down the street, you’re attempting to communicate across time zones, cultures, and oceans. In turn, schedules need to be better optimized, products and raw materials need to be more closely tracked, and costs need to be controlled as your supply chain footprint expands.

Compressed Delivery Cycles Mean You Need to Work Faster, Too

Product lifecycles are shortening, the number of moving parts is increasing, and the speed of change is rapidly accelerating. Paired with the increasingly global operating environment, companies need to work harder than ever to ensure they can keep up with the pace of change. The shorter product life cycle requires companies to rethink their supply chains and streamline processes to ensure that they can keep up with the regular demand for new products. 

As a result, manufacturers and distributors are under pressure to recast business processes and put new, highly automated systems in place that can support more agile and responsive operations.

A New Breed of Buyer Requires New Tactics

Digital-savvy customers have higher expectations when it comes to how they research, configure, and buy manufactured goods. Much like the average consumer, customers in the business-to-business (B2B) sector are taking cues from their personal experiences, expecting their business transactions to be as simple as buying a book on Amazon, streaming a movie on Netflix, or paying a bill on their banking app.

This will require you to compete with the big players—something we discussed in a recent article—join them, or suffer the consequences. Evolution will require more decisiveness, better information, and smarter collaboration across both your organization and the supply chain.

An Increasingly Convoluted Regulatory Climate Requires Better Visibility

Whether it’s a push towards sourcing transparency, the continued fallout of the Wayfair decision on sales tax planning, or the rise of data privacy laws, the regulatory landscape continues to evolve, requiring you to evolve alongside it.

For example, companies will soon have to look into providing reports on the impact of their supply chains. From jobs created to sourcing practices, labor and modes of transportation used, companies who provide this without regulatory requirements will be in a position to succeed. Disclosing information about these aspects of their supply chain can help companies enhance brand image among consumers and prepare for compliance with regulatory requirements if necessary. 

How Will You Adapt to These Challenges?

As the market continues to evolve, resilient manufacturers and distributors will need to stay ahead of the changes. These challenges are significant on their own. But outdated technology and manual, inefficient processes make the hurdles even harder to overcome, particularly for midsized companies that are growing beyond their current capabilities.

Are you ready to stand up to the challenges? Enterprise resource planning can help. ERP is a type of management software that integrates day-to-day business processes. It helps business leaders streamline company activity by connecting all data points and providing accurate business insights.

Solutions like Sage100cloud are built for the modern challenges of today’s distributor and manufacturer, helping to increase visibility, decrease risk, and do more with their time. How can you tell if you’re ready for ERP? Download this free guide from analyst firm IDG on how to make smarter choices in ERP.

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