Wholesale ecommerce requires effective supply chain management to function effectively, especially because there are so many items involved. There are, however, a number of impediments to successful supply chain execution among wholesale firms.
What does wholesale supply chain imply?
The wholesale supply chain is the sequence of activities that must be completed to produce and distribute wholesale items. From converting raw materials into finished products to transporting the completed items to wholesale purchasers and distributing them, a network of firms and suppliers is required for the wholesale operation’s effective functioning.
What are the challenges of supply chain management for wholesale?
There are several difficulties that may arise, much like with any other. The following factors might cause supply chain inefficiency and increase wholesale company costs.
Customer dissatisfaction because of a lack of ability to satisfy consumer expectations
In a wholesale company, since all of your clients purchase in bulk, brands must deal with a high volume of items. This might be difficult to do if you don’t have complete visibility.
Visibility is critical because it allows relevant participants to obtain up-to-date and real-time stock information as well as warning of any potential difficulties. You’ll have a hard time accurately predicting how much inventory you’ll need in the near future when combined with a lack of supply chain forecasting.
Inventory overstocking
Some wholesale businesses, on the other hand, may store a lot of items that are difficult to maintain. Overstocking is frequently caused by a need to keep optimum stock levels in order to fulfill wholesale orders as soon as possible. If you hold onto unsold items, however, you may risk spending money on maintenance and storage expenses.
More competition from big brands
Managing the wholesale supply chain for small companies and startups may appear daunting when you consider that big names like Alibaba and Amazon are competing with you. Wholesale purchasers have little barriers to changing suppliers because these large brands frequently have superior supply chain velocity and maintain price transparency. As a result of this increased competition, wholesale firms must consistently and quickly supply high-quality products.
Global disruptions
Despite good planning, wholesale firms must still deal with unforeseen disruptions in the supply chain owing to global events. Because these difficulties cannot always be anticipated, it’s important to develop resilience so that they can quickly recover even if something goes wrong along the way.
3 ways to improve your supply chain if you’re a wholesale distributor
Once you’ve identified the most pressing challenges in your wholesale supply chain, you can begin searching for viable answers. Here are some optimization techniques for wholesale suppliers.
Analyze your data
Data may make a huge difference in your wholesale supply chain. Accurate data can provide insights into your existing supply chain operations, which might be used to influence your decisions. Keep an eye on key supply chain KPIs such as inventory turnover, procurement costs, and customer order cycle time using analytics.
Use this information to figure out where you currently are, what areas need to be improved, and how much demand you can expect in the future. Then turn the data you’ve obtained into practical insights that may be used to optimize various processes across your supply chain.
Create a collaborative environment
When it comes to the wholesale supply chain, visibility is everything. You’ll need all relevant parties to be able to communicate with each other and have access to all of the information they require at exactly the right moment. This will ensure better collaboration between everyone in your team as well as important suppliers in your supply chain, resulting in a more agile supply chain.
For example, if your delivery provider warns you of potential delays ahead of time, you can quickly notify your retail partners about the problem. This will allow them enough time to take the appropriate actions in order to address the problem.
Focus on automation
A digital transformation is critical for optimizing efficiency and lowering the danger of mistakes. To automate various elements of your procedures, make the most of supply chain technology. It would entail establishing an inventory management system that will automatically update inventory status and provide real-time insight into your stock levels.
You may also automate demand forecasting to account for historical sales data and changes in buyer behavior. Machine learning adds further value to the insights by feeding them with data from multiple internal and external sources, such as online reviews and weather observations. You can use this system to provide exact predictions for replenishing your inventory on time, ensuring that you always have optimal inventory levels.
Finally, utilizing robots can assist you develop more effective picking and packing operations. This entails using robots to pick orders and speed up the process of filling wholesale orders by minimizing time spent on it.