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Wholesale Distribution, Reimagined

Wholesale distribution, an important component of the supply chain, has shown its weak links during the COVID-19 pandemic.  Closely associated with transportation and logistics, the breakdown of the wholesale distribution amid the lockdown imposed by health authorities resulted in the shortage of essential commodities.

The rise of electronic commerce has also affected the nature of wholesaling, with consumers directly ordering from manufacturers to save on cost.  While this has been a rising trend in recent years, wholesale distribution is expected to remain the backbone of distribution because it is more efficient, faster and economical in the long run.  Wholesale distribution involves large volume of orders usually from manufacturers at discounted prices.

Wholesalers, however, are now confronted with complex challenges in the economic environment defined by COVID-19.  With fewer people going to brick-and-mortar stores, wholesalers need to redirect a big part of their supplies to warehouses and e-commerce distribution centers.  Shopping malls and department stores are not as vibrant as they used to be.

This also affects the whole process of fulfilling customer orders—from sourcing and purchasing to warehousing and inventory management to pricing, shipping and billing.  Wholesalers also need to expedite the process, as consumers and subsequently retailers become more demanding by insisting on faster delivery.

Supply chain experts Derek Gittoes of Oracle and Guy Blissett of Deloitte Consulting LLP noted how fragile the wholesale distribution sector became amid the disruption caused by the pandemic.

“In a sense, the pandemic has served to reinforce trends that started more than a decade ago, when globalization and mounting competitive pressures spurred the adoption of modern, lean supply chain practices.  But with the sudden onset of the pandemic, things began changing faster than ever, uncovering inefficiencies that had gone unnoticed in the past. It’s as though the virus exposed the nine-tenths of the iceberg sitting below the ocean’s surface,” they said, as quoted in an article for the Oracle blog.

Gittoes and Blissett said that fortunately, the latest technologies provide an answer to the needs of the wholesale distribution sector and even enable the industry to become more efficient and more profitable than ever.  They are referring to cloud solutions that have redefined planning, forecasting, warehousing, logistics and even sales promotion to optimize revenue.

“Despite the turmoil – or perhaps because of it – huge opportunities have emerged for wholesale distributors to continue to drive revenue and profit. Many companies are picking up new customers and opening new sales channels,” they said.

Conscious wholesale distributors began to rethink their operating models and have invested in cloud technologies to thrive in the new environment.  A cloud ERP distribution software helps distributors automate all of their operations including sourcing, purchasing, inventory management, shipping, pricing and billing and make them more efficient in terms of faster delivery and reduced cost.

It also enables data storage and analysis that distributors can tap anytime not only to monitor inventory and sales but also to predict demand which is essential for quick stock replenishment.  This empowers distributors and put them a step ahead in any situation.

One robust cloud ERP solution for wholesale distributors is Oracle/NetSuite which empowers tens of thousands of fast-growing companies.  Using Oracle/NetSuite, distributors can run their businesses on a single, unified platform that reduces IT costs and gains comprehensive, real-time visibility across the organizations.