On Sunday January 29, I watched the 2012 Australian Open tennis finals between Novak Djokovic and Rafael Nadal. It was mesmerizing tennis to say the least. They were both like gladiators exchanging blows for nearly six hours. It turned out to be the longest Grand Slam singles final in the history of pro tennis. And, only 24 months ago Djokovic had the reputation of being physically frail and lacking steel to finish off such grueling 5-set matches. This time though, Djokovic came on top and won his fifth grand slam title – and third in a row. What changed?
Djokovic, having plateaued in his ranking, re-dedicated himself to excellence and to transforming himself from good to great. He worked hard on his diet and endurance so he could outlast his opponents. He always had the talent and now with his peak endurance in place, he found new confidence to beat the best.
In my role at SAP, I’m privileged to observe and work with some of the brightest minds in distribution business around the globe – and some raise their game and move to the next level of distribution excellence. In short, they “Djokovic” their business and turn from good to great companies. What are some of the transformational strategies these distributors are implementing today to distance themselves even further from their competitors? Here are a few examples.
Differentiating with enterprise mobility and real time information
The best-in-class wholesale distributors are aggressively looking to equip their sales and service associates with enterprise mobility apps and analytics to help them better differentiate, increase revenues, accelerate buying decisions, and maximize productivity while on the go. The first-mover advantage here can be significant.
Expanding into profitable adjacencies
Most best-in-class wholesale distributors, no matter which sub-industry they are in, are looking to move into adjacent industries and services to further differentiate themselves, boost their revenue and add profit to their bottom line. For example, some of the high-tech solution providers are expanding into cloud computing, data capture and point of sale and into enterprise mobility services. They believe these specialty solutions can complement their core business with double-digit growth rates and excellent profit margins. Some distributors are offering retailing, merchandising services and some others are offering light manufacturing services. For them, the key to successfully expanding into these adjacencies is having a foundational ERP solution running on a single, open and scalable technology platform across their entire enterprise and having the industry specific applications available to be turned on to meet their adjacency needs.
Knowing the real cost-to-serve
The best-in-class wholesale distributors are interested to accurately assign indirect costs to customers, products, and channels to get a better sense of their total cost-to-serve. Knowing this is important as they can now get away from ‘one size fits all’ policy that under-serves certain customers and over-serves some others. This way they can proactively manage costs, pricing and true profitability.
Taking cash flow to the next level of efficiency
These best-in-class wholesale distributors have already automated the chargeback management process to ensure they are able to efficiently recover all the money that is due to them from suppliers most while building trust. They are now adding analytics on top to help them optimize new contracts and agreements. This way it is a win-win-win situation for all trading partners in their network.
Driving supply chain visibility and predictability to more resiliency and sustainability
The best-in-class wholesale distributors are not sitting on their laurels after achieving higher supply chain visibility across their enterprise but are now turning their attention to making their supply chains more predictable by being able to quickly respond to changing demand and supply signals. Some are looking to make their supply chains more resilient by embedding risk management strategies and some are even pushing toward more sustainable or greener supply chains.
Are you ready to “Djokovic” your wholesale distribution business?
Neetin Datar is the Senior Director of Industry Marketing for Wholesale Distribution at SAP. His enterprise software experience spans ERP, E-commerce, Global Trade, GRC, Warehouse Management and Distribution markets. He has been with SAP since 1994 and is passionate about technology and its use by distributors to run better.