Consider this: as per estimates by the United Nations Environment Program, approximately one-third of food produced globally is lost or wasted. In industrialized countries, around 40% of these losses occur at the retail level. Major squandering of resources and poor coordination among participants along the supply chain are responsible for most of the wastage. Whereas food is mainly lost in the early stages of the supply chain in the case of developing countries, it’s the reverse for medium and high income countries, with most of the wastage occurring in the later stages of the supply chain.
Strengthening the supply chain and maximizing coordination between various actors along the chain, including removing the technical and managerial constraints across distribution networks is critical to lowering food wastage.
Taking these statistics into account, we can ascertain that for supply chains to function well, the distribution channels must be concrete and connected. Raw materials and supplies stationed in warehouses for too long tend to rot or be rendered useless as the demand ceases. Delayed distribution costs companies significantly at the retail level, lowering their chances to capitalize on the market share and consumerism.
Before elaborating on the opportunities for distribution to set supply chains right, we’ll look at what distribution entails and how it plays a part in mobilizing resources from the factory to the end consumer.
Distribution is the movement of supplies from the vendor to the manufacturer, where the finished or semi-finished products are again set across various distribution channels down to wholesalers, retailers, and finally the consumer. Distribution networks house all the standard supply chain engagements including inventory & warehousing, storage, packaging, as well as transportation and logistics.
Some distribution channels may be limited to the wholesalers, from where the goods directly reach the buyer. The transportation and logistics complexities involved in delivering goods from the wholesaler directly to the end consumer are as complex as when there are retailers involved — a reduced number of touchpoints along the supply chain do not matter and in no way diminish the difficulties and complexities of delivering the finished product to the consumers.
A successful distribution network must be able to implement order fulfillment by having all participants along the distribution line — wholesalers, distributors, retailers — coordinate tasks including warehousing, packaging, storage, shipping, transportation, etc. Distributors are mainly wholesalers that supply products to retailers or directly to customers. A robust distribution management system must be able to deliver goods to wholesalers, retailers, and customers on time and at reduced delivery charges.
Today, technology sits at the core of an optimal distribution network, with data on the movement of products from the factory site to the end consumer obtained in real-time.
Several factors influence the success of an automated distribution system:
Data Capture & Management: information on the movement of a product at each stage of distribution, be it at the warehouse, retail site, or a third party distribution center must be captured at the source. This data is responsible for initiating or mobilizing distribution workflows for further process implementation.
Intelligent Workflow Automation: AI and machine learning enabled workflows make it possible to trigger tasks at each stage of distribution, prompting all players — wholesalers, distributors, retailers — to respond to new data like say, the arrival of a new product, a stockout, missing shipping label, etc. and automatically prompt a response and task execution based on that data. Workflow automation helps accelerate a critical part of order fulfillment, which is order processing.
Intelligent automation enables straight-through processing of sales orders, with automatic validation that includes tallying order details against ERP/ECM database records, by performing inventory lookup, etc. Order processing software automates the most painful, manual, document-dependent steps in order fulfillment, helping hasten order delivery to retailers and customers. Embedded digital transformation technologies like AI, machine learning, advanced data capture and OCR/ICR/OMR technologies, robotic process automation, etc. are necessary in today’s automated distribution systems, as they dramatically lower the need for human effort, and the associated errors and inefficiencies.
Integration: easy integrations to line-of-business applications and legacy systems are necessary for the successful implementation of an automated distribution system. Not being able to integrate an intelligent automation system that lowers the dependence on manual effort to backend systems simply derails the end-to-end connectivity that distribution systems need to be successful.
No Code Customization: ‘no code’ is the new black in software configurations. An automated system must be agile enough to be able to serve business requirements continuously, meaning it should be configurable to add new customizations and scale as per requirements. No-code makes it easy to build upon existing software and customize according to business needs.
Real-time Dashboard: the trouble with traditional distribution networks is the lack of visibility across the distribution chain. An automated system should provide a dashboard showing the movement of inventory and products in real-time.
Automation enables high connectivity and visibility across distribution networks, lowering the costs and inefficiencies of a traditional distribution system. Intelligent automation makes possible unattended or hands-free processing of document-dependent tasks along the distribution chain.