Threats Faced by Manufacturers, Distributors, and Retailers

by Dan Kaplan

This is my personal list of hot-button issues that I share with clients to help them assess threats and opportunities. You may want to print out this list and check off the issues that you’re facing. Give yourself one point for each item you feel is a current threat to your operations.

Manufacturing

___ Outsourcing production overseas to lower operating cost.

___ Starting to bypass the distributors selling directly to the Retail industry.

___ Opening outlet stores where they sell excess inventory.

Distribution

___ Bring components from overseas becoming semi-manufacturers selling to the Retail industry.

___ Selling on the web B2B and B2C serving their clients and the Retail industry.

___ Opening outlet stores where they sell excess inventory.

Retail

___ Buying directly from the manufacturer in the USA bypassing the distributor to lower cost of goods.

___ Buying directly from overseas vendors bypassing both the manufacturer and the distributor.

___ Selling on the web B2B and B2C serving their clients and the Retail industry.

Warehouse

___ Wrong shipment carried duplicate freight, can become excess inventory, and affect customer satisfaction.

___ Misplaced inventory might not be sold and can become excess inventory.

___ Excess inventory carried additional cost and can affect the line of credit.

Ecommerce

___ The web can be a double edged sword: it can increase sales or result in business disruptions.

___ Not having automated warehouse will result in incorrect shipments and excess inventory.

___ Not having modern back office system can result in buying the wrong products resulting in excess inventory.

Searching for Software

___ Very often the search is left to the IT department who does not have the complete business overview resulting in choosing the wrong software.

___ All demos look very good since they are given by professionals who were trained to give them.

___ Just because software looks good does not mean it is appropriate for the end user.

Buying Software

___ Search committee of heads of department and computer department should be established.

___ Business requirements list should be put together and addressed at the demo.

___ Before buying the software visit vendor reference accounts and meet the CEO, CFO, and Computer Manager.

Addressing The Above Threats

Often a properly chosen and implemented integrated software solution can help a business overcome these threats and even find opportunities. That being said, sometimes software is the right solution to address these threats, sometimes it isn’t, and sometimes it’s just part of a broader solution. If you’d like to contact me and share which issues your business is facing, I’d be happy to provide you with my feedback. And always feel free to tell me your challenge via our request information form.

Since 1980, Dan Kaplan has worked with corporate executives to improve purchasing, increase warehouse and distribution efficiencies, and implement software solutions that result in substantial savings and productivity improvements. To lower your operating costs, reduce your warehousing and distribution business’s quote generation process from 3 weeks to 3 hours and invoice cycle from months to one day, go to smcdata.com