The Compete Secret: BI in an SMB Distribution Environment, Part 2

In my last post, I discussed how your distribution organization can use business intelligence (BI) as a competitive tool. Now, let's talk a bit more about what BI can do for the future of your organization.

Scenario #1

Think about this situation: perhaps it is raining more than anticipated in Seattle this year. (Go figure.) Capitalizing on the bad weather, and the demand for umbrellas going up, your distribution organization is able to react to trends and sell more wet weather gear.

Scenario #2

This one is a bit more complex.

Imagine that you are a distributor for a restaurant or a fast food chain and you are able to predict demand for certain menu items. Your predictions will be based on data from certain points of the day, geographical location, weather and local events. You'll be able to perform analysis during a designated period of time. This information allows you to report back to your restaurant with trendspotting.

Let's get a little more in depth. Imagine that you are the supplier of the restaurant's fresh fruits used to make smoothies, and you notice the unusual spike in demand through the order flow. With proper analysis, you can determine that on a Thursday, Friday, Saturday and Sunday, from 2pm - 6pm, when it's 65 to 85 degrees outside, there is a huge spike in demand for fresh fruit for smoothies.

That is the predictive analytics side of BI in action.

Blending historical information that resides in the ERP with customer demand allows distributors to suggest adjustments in order quantities on the fly.

For instance, looking at the fruit smoothie example above, if it is a Saturday in June with an 80 percent chance of rain, it could very well turn out to be sunny and it is a good idea to send some extra strawberries, pineapples and bananas (most popular smoothie items).

Or, when the Super Bowl is in Tampa hosting the Vikings. The buyer for the retail section of a local sporting goods outfitter might not even be thinking about the fact that there's going to be a spike in purple shirts in his area. So, they may lose out on selling opportunities.

To reach this higher rung on the business intelligence ladder, distributors will need to first target a very specific aspect of their processes and try to reach a relatively small objective. Then, after a certain level of comfort and competency has been met with the technology, the strategies can be built out further to cover a wider range of moving parts.

At the end of the day, SMB distributors need to recognize that these solutions are available to them, and are critical to competing in the modern era, especially when contending against big-box wholesalers and retailers.

Learn more about the continuing evolution of wholesale distribution in this new whitepaper

Next Post