What’s hot in distribution?

Distributors play a key role in a successful supply chain, but they are currently facing a very volatile business environment. In the April 2023 issue of CSCMP’s Hot Topics publication—"Unlocking value in today's disruptive trends: Increase customer value and drive competitive advantage for distributors”—Stu Jerke from the consulting company KPMG LLP examines the following four key trends that are shaking up the supply chain and how distributors need to adapt.

1. Increased focus on resiliency: Due to the increase in market disruptions over the past few years, many companies are seeking to enhance the resiliency of their supply chain through tactics such as building out their just-in-case inventories. In response, distributors must embrace flexibility and view disruptions as opportunities to elevate their operations and adapt to wavering demands.

2. Escalated service-level expectations: Omnichannel retailing has greatly increased consumer expectations One way that distributors are responding is by utilizing regional distribution centers to position inventory closer to customers, enabling quicker fulfillment and delivery at lower costs.

3. Increased use of intelligent automation: Labor shortages and elevated customer expectations are driving distributors to implement intelligent automation technologies in their warehouses. These technologies include automated storage and retrieval systems (AS/RS) and autonomous mobile robots (AMRs).

4. Increased need for visibility tools: Data is a valuable asset for distributors, but its potential is often limited by outdated platforms and lack of transparency. Leading distributors are investing in transportation management systems and supply chain control towers to gain real-time visibility into their operations. 

By embracing these trends, concludes Jerke, distributors can better position themselves for success in an increasingly competitive and dynamic business environment.