Of all the exciting talk at the Microsoft Business Applications Summit this month in Atlanta, one subject stood out to me as having the biggest potential impact on distributor operations: product integration.
Specifically, I was impressed with how thoroughly and successfully Microsoft Dynamics 365 has married its Finance and Operations solution with the rest of the platform.
Thanks to this integration, it’s possible for the front end – sales, marketing, customer interaction – to fully, and immediately, communicate with and receive customer information from the warehouse, and the other way around. This development means distributors can gain a complete customer picture in real time, and spot purchasing trends as they unfold.
In the past, purchasing and customer-use reports could be generated weeks after the fact – almost too late to react and respond in a way that would save customers or boost sales.
But now, with the capabilities provided by artificial intelligence (AI), machine learning and other advancements, Dynamics 365 users gain immediate insight into customers and their buying habits. That’s news distributors can use to better understand why customers buy what they buy and when – or why they are moving to a competitor – not weeks or months later, but as it’s happening.
That insight also is valuable for guiding distributors’ planning. Order forecasting and maintaining inventory used to be a matter of educated guesswork. And when customers needed information about shipping and delivery, distributors would have to check with the warehouse or pull inventory reports and get back to their customers, hopefully in a day or so, but possibly later.
Now, ordering can be based on timely data. And collaborating with customers around ordering and delivery is far easier – which is a great way to build customer loyalty and maybe even prevent them from taking their business to Amazon Business.
While it is gratifying to see many distributors embracing this enhanced technology, there are still holdouts. I occasionally hear distributors say they don’t need to invest in this kind of information because they’re making money. But in the current economy nearly everybody is making money. And why be satisfied with margins of 3 percent or 4 percent, when you could be at 7 percent or even 10 percent?
Of course, any change brings challenges. In this case, the challenge involves changing an organization’s culture. When the front end of the shop is accustomed to working separately from the back end, and vice versa, the close collaboration and data sharing, and maybe even role-shifting, is going to take some getting used to. But with the right management guidance, it can be done. And your margins will thank you.
About Robert Ruppert