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Key Areas of Focus for World-Class Wholesale Organisations, Part 1 – Data Driven

Adam Cavanagh
Published on:
December 17, 2020
Based on our work with clients; analysis of the wholesale and distribution sector; and input from expert consultants; we’ve identified the characteristics that define world-class wholesale organisations. This set of capabilities forms an anatomy that sets apart those businesses who are best placed to succeed as we move forward from the turbulence of 2020.

We have formulated a model for potential, based on what we see as the strongest indicators of organisational health across 6 key areas. Strength in each of the elements gives an organisation both resilience (to absorb and manage market and economic pressures) and strength (to outpace/out-manoeuvre competition and act on opportunity).

The first defining feature to consider is a data-driven approach.

Leveraging data

Harnessing the available data to understand the dynamics of the wholesale/distribution business is fundamental to strength and resilience.

Our view is that most organisations are now in a position where their stock data is under control. The next step in the process is to leverage their rich data on the dynamics of clients, suppliers, inventory and supply chain.

Volumes of information are created every business day within departments and systems across a company. This data provides the evidence of activities and proof of performance that generates an understanding of what is working and what can be improved. It also functions as validation for decision makers when opting to progress with a plan or pull back.

In order to drive decision making, organisations must develop this information from a straightforward indication of the state of play to actionable insights. Transforming the data then informs decisions to minimise risk/vulnerability and creates the awareness required to seize opportunities as they arise.

Managing the intricacies of high volumes of products from multiple suppliers, combined with varying patterns of demand across a range of clients and territories, requires alignment. This can only be achieved when everyone is working with the same information, which relies on a central source of data being in place.

Key characteristics

Within each area of the anatomy of a world-class wholesale organisation, we have outlined a series of defining characteristics. When considering data, these traits are as follows:

Single version of the truth: Our system is centralised, providing a single version of the truth across the business. This enables planners and managers to ensure that they’re working to the same information even if they are working remotely.

The organisations best placed to succeed are able to characterise their operations as fully centralised.

Powered by data: We use analytics to monitor and track inventory and sales forecasts dynamically (in real-time). This enables us to identify excess/insufficient inventory by SKU and location and rapidly initiate corrective action.

Rapid change and constantly evolving patterns means raw data is not enough. The best organisations have the power to analyse the data and use the insight to drive decision making.

Supply chain visibility: We have the appropriate tools in place to provide end-to-end visibility of the supply chain and track changing dynamics. This enables us to marry outcomes to decisions and continually improve performance.

Plans and management need to extend beyond the scope of current stock and existing orders. A longer-term approach must account for what is happening outside of the organisation and potential scenarios that may emerge.

For wholesale distributors to compete and grow in the future, they need a precise understanding of the entirety of their business operations, from the back-end manufacturing/supplier management, to the front-end customer-facing sales and marketing efforts.

Why it makes the difference

Inventory data and the capability to turn it into valuable information is oxygen for wholesale/distribution organisations. The strongest firms are those who best harness their data and turn it into actionable insight to drive their business.  

In our experience, it’s difficult for organisations to self-diagnose the key areas where change would have the biggest impact. The diagnostic tool we have created gives you the opportunity to pinpoint priority areas for attention, highlighting specific activities to help you enhance business performance and resilience.

What is the strength and resilience of your organisation? Reach out to AGR to know more.