If you work in the wholesale trade/distribution industry, life is probably very interesting right now. Even at the best of times, wholesale distributors face immense complexity, juggling large numbers of product SKUs, and managing massive volumes of transactions with both suppliers and customers. Layered onto all this are the intricacies of pricing and rebate structures, and competitive pressures driving value chain disruption and digital transformation.
The challenges of managing this complexity are amplified at times with more volatility, for example due to supply chain turmoil, inflationary pressures, and labor shortages. This also brings opportunity in the form of potential mergers, acquisitions, and market share expansion.
Many wholesale distributors are stepping up to the plate and are either in the process of embracing – or have embraced – digital transformation. Initiatives range from updating legacy IT infrastructure, to moving to efficient ecommerce platforms for customer and supplier interactions. Curiously, as we see among our even some of the most digitally advanced companies fail to prioritize investment in their internal financial and operational planning systems. This means that large multi-million-dollar decisions may be made on the basis of a spreadsheet analysis that combines a high-level view of the operational and financial impact of a proposed investment “cobbled together” using last month’s data.
On the other hand, companies that have made the appropriate investments in platforms that support integrated business planning (IBP), and its close relative extended planning and analysis (xP&A) are armed with tools that pull data directly from all relevant source systems, have models that calculate at both detail and aggregated levels of the business (e.g. from SKU up to product category by geography, say), and can play what-if scenario games with currency rates, raw material costs, labor rates etc. allowing analysts to easily compare and contrast scenarios.
This QueBIT post on the IBM Journey to AI blog site provides specific examples of what this can look like for everyday Supply Chain planning while making the point that the right technology platform can be used to support all manner of operational (S&OP[1], SCP[2], IBP) and financial (FP&A[3]) planning and reporting use-cases, and ensure that related data (e.g. demand units & revenue) and shared metrics (e.g. fill-rate and inventory levels) are centrally derived and sourced, so that everyone is making decisions based on the same basis.
To learn more about how to get started on your journey to better integrated planning, contact QueBIT at info@quebit.com.
[1] Sales & Operations Planning
[2] Supply Chain Planning
[3] Financial Planning & Analysis
