Driven by Data: 3 Ways to Empower the Wholesale Distribution Supply Chain

Wholesale distributors face logistics challenges today that seem insurmountable. Even prior to the massive upheavals of 2020-21, they were already facing the tough job of getting products to a range of demanding customers, including retailers, on time and at a healthy profit margin. 

That means creating a seamless, efficient and cost-effective flow of goods from manufacturers to the business partners who sell them to consumers. From getting inventory levels right to choosing carriers and optimizing routes, wholesale distributors have always had their hands full with everyday supply chain optimization challenges. 

The past few years have amplified those challenges exponentially. Now wholesale distributors must also contend with ongoing upstream and downstream disruptions, the rapid rise of e-commerce, shifting consumer preferences, increasing competition, product and labor shortages, and rising operations costs. Both demand and supply have become moving targets, making it hard to achieve any kind of predictable results in terms of revenues, costs, service levels and other business metrics. 

The most common problem we see at Redwood? Many of the manual processes and legacy solutions wholesalers use for logistics planning are simply not built for today’s complex, fast-paced supply chain environment. 

Today wholesalers need an entirely new set of tools and best practices that enable data-driven planning, which has a much higher probability of success — because it’s based on real-time, real-world business realities. Thanks to supply chain digitalization, wholesale distributors have easy access to all the data they need to make the right decisions and optimize processes. They just need to harness that data and apply it to create agile, flexible supply chains that respond quickly and fluidly to changing conditions and new challenges.  

Here are 3 practical applications for data, though there are dozens of uses across the end-to-end wholesale distribution supply chain: 

Accurate Demand Forecasting: A close analysis of historical sales data and market fluctuations helps predict future demand patterns. This allows wholesalers to optimize inventory levels, avoid stockouts and ensure they have the right products in stock at the right time.
Route Optimization: By analyzing real-time traffic and weather patterns, delivery locations and freight costs, wholesale distributors can optimize delivery routes for service, cost, sustainability and other metrics. This translates to faster delivery times, reduced expenses, lower environmental impact and a happier customer base.
Warehouse Excellence: Data science and analytics can be used to identify and eliminate bottlenecks in warehouse operations, optimize picking and packing processes, prioritize work strategically, and improve overall warehouse resource utilization — from labor and inventory to forklifts and other equipment. 

Unleashing the Power of Information 

How can wholesale distributors who feel overwhelmed, not empowered, by their massive volumes of supply chain data, begin leveraging that data to make fact-based, optimal decisions? 

First, they need to identify and gather the data points most relevant to their business model, their key challenges and their strategic goals. For wholesale distributors, that’s typically going to include data on sales volumes, inventory levels, delivery times, and warehouse and transportation metrics. 

Next, wholesalers need to invest in advanced data collection and performance management tools, including a warehouse management system (WMS) and/or a transportation management system (TMS). These powerful software solutions not only automate data collection and create a centralized data repository, but they’re also designed to apply that data to autonomously measure and improve logistics results. They support data-driven decision-making and, in many cases, are enabled by artificial intelligence (AI) to recommend the optimal resolution when an exception occurs. 

Wholesalers can also benefit from data visualization tools. Instead of being overwhelmed by huge volumes of raw data, they can access clear charts and graphs that translate data into easily understood strategic insights they can act upon. 

Driven by Data, Focused on Success 

With the right data at their fingertips, transformed into actionable information, wholesalers can make fact-based decisions across every aspect of their operations. They can optimize procurement by analyzing supplier performance data, applying metrics, and objectively choosing partners who can deliver on time, reliably and at the best price. 

Wholesale distributors can also maximize returns on their inventory investments by using data to determine optimal safety stock levels, reduce the risk of stockouts and overstocks, and strategically allocate and position inventory. Inventory represents a huge capital investment, so right-sizing and right-positioning is critical to driving profitability. 

Data science and analytics also enable wholesalers to capitalize on advanced best practices like dynamic pricing. By studying individual customers’ purchasing histories, past demand levels and forward-looking market trends, wholesale distributors can dynamically change their pricing strategies to maximize both revenues and profit margins.

Where Can Data-Driven Decisions Take Your Business? 

Building a data-driven wholesale distribution supply chain is an ongoing process that involves technology adoption and process optimization. However, it’s easy to get started by embracing the power of data analytics to transform your supply chain. You can begin by working with a trusted partner like Redwood Logistics — which delivers decades of experience and deep expertise across both the supply chain and advanced technology solutions. Don’t wait to start unlocking a world of operational efficiencies, cost savings and improved customer satisfaction. 

Ready to discuss the power of data to revolutionize your supply chain performance? Reach out to Redwood and learn about our range of solutions and services for wholesale distributors — as well as the impressive results we’ve achieved for hundreds of customers