So the Economy Is Down; What Distributors Should Do to Prepare for Recovery

It is impossible to turn on the news without being bombarded with stories about the volatile economy. Despite reports of a turnaround, workers continue to lose their jobs as companies add more cost-cutting measures. Although the timing is not ideal for all aspects of business, savvy distributors are finding ways to capitalize on the lull in activity by identifying ways to do business better.

Using this time to seek out new growth strategies and identify ways to implement new processes allows distributors to add value while others are cooling their heels. When the market begins to look up, these businesses will have already positioned themselves for success and be able to carry on their momentum.

The distribution industry is full of moving parts, with a large number of business processes that can be examined for fine-tuning. Companies can implement new software tools or identify ways to use their existing software investment to optimize their performance. For example, distributors can take a closer look at their shipping, receiving, material handling, conveyance, picking, packing, slotting, cross-docking, and workforce management techniques to find areas for improvement.

Here are five simple suggestions for distribution companies:

- Determine which products are ordered most frequently – It might sound simple, but clear visibility into high-order products can enable companies to reorganize the DC so that those products are located closest to the shipping areas. Over time, the added efficiency of pickers will really pay off.

- Examine automation needs – Implementing wireless, barcoding, and RFID technology can greatly improve the performance of the warehouse and speed orders to customers.

- Expand to the Internet – Not only can e-Commerce open up new revenue streams, but integrating a website with an existing ERP solution can also enable real-time visibility into stock levels and order status for existing customers.

- Get a hold of inventory levels – Tools exist that can help distributors determine the right level of inventory to meet customer demand without the expense of maintaining excess products.

- Consider outsourcing – It may not be necessary, but some distributors stand to save a lot of money by outsourcing certain tasks to other companies.

By taking a proactive approach to improving business performance, distributors can utilize technologies that allow them to deal with complex issues while managing the bottom line during downtime, and emerge from the recession as a leaner, meaner, and even greener organization.

Comments

[Robin Smith]

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