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In the Industrial Distribution Supply Chain, speed to market coupled with having the right inventory at the right price ensures long-term business success.
Successful supply chain improvement projects will work to optimize inventory planning and deployment and maximize product life cycle management. The goals of achieving lower distribution costs and improved customer service must be balanced while taking into account:
- Customers demanding more and more value (next day delivery guarantees)
- Intense pressure to compete globally (yet maintain local presence due to highly fragmented industry)
- Inventory planning and optimization due to SKU proliferation (many clients manage inventory up to three million SKU's)
- Unprecedented pricing competition and squeezed margins
- Individual unit (each/broken case) and case picking with shipping to customers directly
Industry Highlights
- Biggest Driver in 2011 - Inventory
- Goal is to maximize assets with keen focus on process improvements and cost reductions
- Large # of SKU's (proliferation)
- Mostly each and case pick
- High Velocity / Volumes
- How to maintain a specialty niche yet offer a broad line of products and services
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You may not be competing directly with Amazon and eBay, but they are raising your bar, nonetheless. Companies with complex distribution systems must find sustainable competitive advantage by meeting increasing customer needs while maintaining a delicate balance with other priorities such as profitability, cash flow and growth. Read about the impact of e-Commerce on distribution in this Industrial Distribution magazine article.
Read about Fortna client MSC and its formula for sustainable growth in the Industrial Distribution magazine.
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