Wholesalers stock up for global market
'Wholesalers are aggressively adopting new sales technologies to reach customers'
THE role of the wholesaler has undergone huge changes in recent years. In the past, wholesale companies were buffers that reduced the impact of supply and demand uncertainty by maintaining inventories and safety stock. Now wholesaling is increasingly a key element of the strategic supply chain planning.
"With new technologies that allow wholesalers to reach customers and deliver products in new ways, the distinction between manufacturer and distributor is being eliminated," says Gary Lawrence, MD of Baan SA.
"To differentiate themselves from the competition, today's wholesale companies are expanding beyond the traditional buy and sell business model to value-added services such as labelling, special packaging, installation, after-sales service and warranty support."
New communication methods and technologies, declining trade barriers and accelerating mergers and acquisitions are also forcing wholesale businesses into the global marketplace. "This has brought new competition, increased pressure on margins and raised the bar for customer service," says Lawrence.
"As a result, wholesale companies are continuously striving to create competitive advantages through unique features in assortment, prices and product availability."
Rapidly evolving technology and the need for reduced cycle time are also driving wholesale companies to specialise on core competencies and form tightly integrated partnerships with suppliers, customers, and other links in the supply chain such as transport companies and service providers.
The wholesale industry is a central player in the move from a traditional supply model, where goods are pushed to the consumer, to a new demand chain where business operations are pulled by actual demand.
"The rapid pace of change in the industry means that information technology must be quickly implemented and yet flexible enough to allow continuous business process change and improvement," says Lawrence.
Wholesalers are aggressively adopting new sales technologies to reach customers, using e-commerce and providing mobile sales forces with portable tools for order entry and product configuration. Wholesalers are also enhancing operational productivity with enabling technologies such as bar coding and the web.
"Baan offers a system that fully integrates all these aspects of wholesale operations," says Lawrence.
"When dealing with complex products, wholesalers need tools to define the specific product the customer requires and to maximise sales by proposing services or complementary products at order entry," he says.
"Baan offers a variety of item definitions to meet these needs. The item code is fully customisable, the manufacturer code can be defined as a segment of the item code and kits can be defined with items that are stored and sold separately or as part of the kit."
Baan contract management software helps wholesale companies create and manage customer contracts for prices, discounts, quantities, and delivery schedules. Sales orders can be generated from contracts, with quantities and amounts cumulated against the contract for control purposes. Purchase and sales schedules simplify time-based forecasting and ordering and BaanERP allows customers to indicate both firm needs and planned requirements on order schedules.
"To deliver customer-specific products on a timely basis, companies are moving final product assembly closer to the customer," Lawrence says. "Often, the wholesaler is the supply chain link that manages the numerous variations of customer-specific final assemblies. To increase their value as suppliers, wholesale companies are differentiating their product offerings through value added services like kitting and final assembly.
"Baan helps wholesalers to manage these related products and services with product accessories that are sold at order entry, menus of items that are often sold together and final assemblies made from a component product."
The Baan system also streamlines order entry, manages allocation, scheduling and warehouse delivery co-ordination. "Wholesaler's performance is measured by their ability to deliver user-ready products and satisfy customer shipping restraints. The Baan system's shipping intelligence accommodates these requirements and prevents partial order processing in the warehouse until quantities can be allocated to satisfy the order.
"For customers willing to accept partial deliveries, the system's built in controls ensure that only matched quantities of related products are picked and shipped. Partial orders can be given priority when allocating incoming products to ship customer orders as quickly as possible."
Baan also offers a complete supply chain management for companies that operate as part of a global enterprise.