Can Demand Planning Unlock New Profit Potential For Distributors?

How better forecasting and inventory planning can improve the bottom line.

Distributors have always relied on their professional buying skills and inventory management expertise to service their customers. Yet today’s global supply chains, redundant inventories, demanding customers, expedited orders, and tighter margins require distributors to differentiate to survive—or even better, to thrive.

Each day, distributors face the challenge of sourcing and selling globally while maintaining a local presence and strong customer service. Now that distributors are increasingly playing an expanding value-added role in the total supply chain, they must become more proficient at understanding, predicting, and helping to shape demand for products.

To remain competitive, distributors must be able to rapidly react to even the slightest change in demand. But current forecasting techniques and the tools that most distributors use aren’t up to the challenge. Using replenishment policy to trigger reorder points doesn’t provide a long-term view. Even worse, spreadsheets are error-prone and labor-intensive, and they don’t integrate easily with enterprise resource planning (ERP) systems. Spreadsheets do not handle large volumes, and do not provide “manage by exception” techniques.

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