Why Collaboration Should Keep Distributors Up at Night

The concept of collaboration in business continues to be a hot topic as companies today, regardless of size, experience increasing connectivity and often operate on a global scale. Silos of the past continue to break down as technology transforms the way we work and live.

In the Distribution sector, collaboration is typically not a topic that keeps company owners up at night. This is because they know it’s happening in their business already and because it can be tricky to measure. This pushes it even further down the list of addressable business concerns. Any improvements relating to collaboration are considered “nice to have”, but not mission critical. Instead, the focus is on cash flow, margins and profitable growth.

There are various outcomes of collaboration, with most of the industry buzz today around productive collaboration as it relates to knowledge and information sharing. Countless articles can be found citing the benefits of increased collaboration.

However, what happens when there is too much of a good thing? Consider the consequences of unnecessary or chaotic collaboration, where personnel resources become overburdened with unproductive meetings and ad-hoc information requests coming via multiple communication channels (e-mail, text and alerts) all day long. What may have started out as effective teamwork and knowledge sharing can unfortunately transform into hours of wasted time or worse.

So although few Distribution business owners are losing sleep mulling over collaboration, perhaps they should be because it’s definitely impacting their business.

Consider the following business scenario related to inventory:

A salesperson needs to have access to the following information

– Customer purchase history
– Available stock
– Alternatives or substitutes for items not in stock
– Surplus stock in other locations
– Comparable vendor products in markets where manufacturer or quality varies
– Promotional items and up-sell opportunities

What happens when they don’t have easy access to all that information in real time? They have two choices, work with stale information off an old report, or scramble to get ad-hoc information from other teams such as: Purchasing, IT, or the Warehouse. Either scenario potentially results in slower customer service, a possible stock outage, order error, reduction in sales, etc.

Now imagine that scenario with a network of sales reps. Taken further, imagine it from the perspective of Purchasing, IT or the Warehouse, constantly flooded with a barrage of ad-hoc requests interrupting their daily responsibilities. Over time, when teams and departments can’t productively collaborate in real time, sales drop, profits erode and business owners start losing sleep.

Today’s Distributor will benefit most by focusing on Value-Added Collaboration and ways that it can be implemented in their business. Typically this results in a combination of business process improvements and increased automation. By creating an infrastructure that supports productive collaboration, a business is able to maintain the balancing act of enhancing operations while protecting against productivity and performance loss. Ultimately, this leads to predictive cash flow, better margins, profitable growth……and perhaps even a more restful night for Distribution owners.