How Cloud is Helping the Distribution Industry Stay Ahead

Becoming redundant is a major concern for many modern businesses that must thrive in a digital-first environment. The distribution industry is not free from these worries either. Today, most manufacturers are selling directly to consumers, through their websites and social media platforms making manufacturers and retailers question the need for a distributor. Take the example of Dell Computers and Tesla – two tech giants that have been able to successfully reach their customers worldwide using their websites, with minimal support from intermediaries.

To remain relevant, distributors must look to iron out issues within the system and break the traditional distribution mold using technology. Today, with the use of Cloud technology, many distributors are staying ahead of the curve by automating their workflows, scaling with ease, and making supply chains sustainable. This blog will take a deep dive into how Cloud technology can help your distribution business stay afloat in a sink-or-swim environment.

The distribution industry as we know it today has its roots deeply set during the Industrial Revolution when the mass production of goods became the norm. Along with it, transportation networks through rail and water were solidly established allowing manufacturers to transport their products far and wide. Further on, at the end of the Second World War, to boost economies affected by the war, supply chains were created.

In the recent past, the pandemic proved to be an urgent wake-up call for distributors. For months, supply chains remained stagnant urging many in the business to use technology to set things in motion once again. Many distributors moved their operations to the cloud to avoid facing similar risks in the future and to ensure they can cater to the rapidly changing requirements of consumers. A report by Gartner indicates that more than half of enterprise IT spending in key market segments is expected to transition to the cloud by 2025.

For distributors, communication between multiple parties and visibility across the supply chain is a cause for perpetual stress. The back-and-forth can be catastrophic if a high-priority message gets lost in a flurry of communications.

Cloud platforms provide a centralized repository for data storage, allowing distributed teams to access information from anywhere. This eliminates the constraints of physical location and ensures that all team members and stakeholders have real-time access to the latest data.

Babbitt Chainwheels serves as the perfect example. The Massachusetts-based manufacturer and distributor of chain wheels has been a leader in the industry since 1915. Given the complexity of the business and the scale of the operation, the business was struggling with a lack of data visibility and transparency. However, following the implementation of Infor CloudSuite Distribution, the organization has seen substantial improvements across ordering, purchasing, and warehousing. A 250-line item order that used to take them half a day to enter now only takes three minutes because it can be uploaded electronically and all stakeholders can gain access to this information at the click of a button – there’s greater clarity and better communication across the board.

If you are still only considering transitioning to the cloud, here’s why you may need to focus your efforts on this migration.

Over the past few years, distributors have had to deal with one calamity after another. The end of the pandemic brought about an inflationary environment followed by conflicts that have had a ripple effect on the world; increasing the prices of fuel and obstructing trade. Given this volatile environment, if distributors haven’t implemented an agile and scalable system, they are bound to sink.

Cloud-based solutions provide on-demand access to computing resources, allowing businesses to easily scale their operations up or down based on demand fluctuations. This agility is crucial for distribution companies dealing with varying inventory levels and order volumes. The ability to add integrations and extensions to the existing cloud platform also lends to its adaptability.

Drillmex Inc, is a North American industrial distributor of cutting tools, machine tool accessories, cutting fluids, and precision instruments. During the past ten years, the organization experienced significant growth and decided to do more with less. Having implemented Infor CloudSuite Distribution, the organization decided to integrate a third-party e-commerce platform to drive online sales. Given that the company had several suppliers, the integration synced perfectly with the cloud platform to create greater visibility and drive sales more efficiently.