Putting the “AI” in Availability: 5 Ways To Bridge the Supply-Demand Gap in Wholesale Distribution and Manufacturing
The wholesale distribution and manufacturing (WD&M) landscape is entering a new era. B2B customers increasingly expect a commerce-like experience. Self-service and flexible, omni-channel fulfillment are the new gold standards. Erosion of regional restrictions means whoever has the product on hand gets the deal, and e-commerce distributors and marketplaces are muscling in. Margins are under unprecedented pressure.
The industry arena is more demanding and fast-paced than ever. WD&M faces an existential moment where the usual workarounds to legacy challenges are no longer viable in the face of cascading and unprecedented threats.
Inventory Processing and Order Management Efficiency Has Become a “Make” or “Break” Issue
One of the main challenges WD&M faces is transforming away from legacy approaches to inventory processing and order orchestration, as well as moving toward solutions primed to handle omni-channel. Current legacy systems just can’t deliver the levels of accuracy, flexibility and efficiency required to successfully meet the moment.
ERP and spreadsheet-based processes aren’t effective enough in handling the demands of modern commerce. As any wholesale distributor who’s tried it can tell you, attempting to back-engineer an existing, hardened ERP system into a modern solution for omni-channel inventory visibility and order fulfillment is costly, and nothing ever works quite the way it should.
The result? In short, a world of pain — including increased cost-to-serve, missed sales, lost customers, inventory shortages, margin shrinkage, and limited to no inventory visibility across networks and nodes.
So, what’s the solution? Enter order management solutions (OMS) purpose-built for the complexities of B2B and B2B2C and infused with artificial intelligence (AI) and machine learning (ML) for a future of continued relevancy.
AI-infused inventory and order management is the way forward for wholesale distributors and manufacturers hoping to bridge the supply-demand gap and meet and exceed their customers’ new B2B omni-channel expectations. It’s scalable, cost-effective and fit-for-purpose, and the benefits are nothing short of transformative.
Breaking Down ERP Inefficiencies for Inventory and Ordering
For inventory and order management, the ERP approach falls short in a number of critical areas.
Limited to No Inventory Visibility
Limited or no inventory visibility across nodes and networks means wholesale distributors and manufacturers have trouble fulfilling commitments. Excess inventory ties up much-needed capital, while supply shortages have a negative impact on customer satisfaction and retention. There’s no line of sight on what inventory is available to promise, to whom, and when. Wholesale distributors and manufacturers have no view of their suppliers’ inventory, leading to supply issues, additional costs, and delays.
Inefficient Order Creation and Modification
Siloed, paper-based environments mean processing every order requires manual, human effort and doesn’t include a self-service option. A quick order interface means customers can create quick orders — even using traditional methods such as uploading emails, CSVs or XLSs. Without a modern order interface, there’s no self-service or quick order creation.
Higher Error Rates
Legacy ERP systems invariably require more manual processing, manual data entry, and manual spreadsheet management. This leads to increased levels of human error — missed orders, late deliveries, unhappy customers, and higher costs-to-serve — which negatively impact the bottom line.
Heavy Reliance on Tenured Employees
Too many wholesale distribution and manufacturing operations over-rely on tenured employees to keep track of inventory and keep the ship steady. Sure, Hank knows exactly how many two-by-fours will be available next week in the Tahoe branch, but Hank may hurt his back while shifting stock tomorrow and be out of commission for the next three months. What then?
No Omni-Channel Support
Most existing ERPs are not built to handle omni-channel ordering. According to McKinsey, today’s B2B buyers are using up to 10 channels to conclude the buying process, from self-service portals to video and phone calls. Funneling orders from multiple channels into a single, cohesive inventory management and fulfillment process is complex and challenging, and requires a built-for-purpose solution.
The Benefits of Order Management Built for B2B Complexity
Implementing purpose-built order management solutions infused with AI capabilities delivers a host of key operational benefits that translate directly into profit.
Real-Time Inventory Visibility and Tracking
Up-to-the-minute visibility into sellable and non-sellable stock allows accurate demand planning, reducing the risk of inventory shortages and stale inventory.
Demand Forecasting and Proactive Replenishment
AI analyzes historical sales data, market trends, weather, and promotions to accurately predict demand, helping you optimize inventory levels, reduce carrying costs, and improve cash flow.
Intelligent Order Routing for Optimal Fulfillment
AI/ML factors in proximity, capacity, customer and product locations, promised delivery dates, inventory levels, merchandise costs, the likelihood of markdowns, shipping time and costs, labor capacity, and other constraints to optimize order fulfillment locations. This improves on-time delivery rates and cost-to-serve.
Automated Exception Handling and Error Reduction
AI-infused order management systems automatically flag anomalies like incorrect quantities or pricing discrepancies, reducing the risk of errors.
Five Ways Blue Yonder Transforms Inventory and Ordering Management Using AI
Blue Yonder’s suite of AI-infused order management microservices delivers a fit-for-purpose inventory processing and OMS that wins you margin and boosts efficiency at every operational level.
- Complete Real-Time Inventory Visibility Across Your Network
Leverage AI and ML to maximize inventory exposure and deliver accurate risk-free promises for an e-commerce revenue boost of up to 5%. Blue Yonder delivers real-time product availability, reservations and segmentation, from enterprise in-stock/out-of-stock messaging to proximity- and location-based availability.
- Perpetual, accurate and reliable inventory commitments to customers across every channel
- Omni-channel fulfillment architecture
- Optimize cost to fulfill by factoring in account location, cost of merchandise, product selection, profitability, transportation, as well as transport and supply chain costs
- Reservations and inventory segmentation through flexible and complex allocation algorithms
- Pre-sourcing and post-sourcing, promising against future inventory supply
Improve fill rates and adherence to service level agreements (SLAs) and improve order to cash with flexible and complex allocation algorithms to support complex customer needs.
- Allocate orders based on specific time intervals, status or by counts
- Allocate highest priority orders versus lower priority orders
- Allocate orders based on predetermined rules at different levels by percentage or weighted average
- Allocate orders based on forecasted demand and supply
3. Intelligent Rebalancer
Disruptions, changes, and reprioritized needs happen all too frequently, especially when there are long lead times between order creation and fulfillment. When these disruptions happen, you need a way to react quickly without creating havoc with customers.
- Rebalance open demand based on defined allocation rules
- Resequence pending orders for optimal sourcing and reprioritization
4. Order Services
Improve your percentage of perfect orders with full end-to-end visibility. Schedule, orchestrate, modify, and support the complete order lifecycle with a single source of truth from order to delivery, regardless of channels, source and types.
- AI/ML-driven multi-factor cost optimization protects margins by reducing cost-to-serve
- Manage complex organizational hierarchies for various business entities including marketplaces, third-party logistics (3PL) providers, distributors, manufacturers, and more
- Resequence pending orders for fulfillment based on optimal resourcing and reprioritization post-disruption
- Define workflows and orchestration rules, allocation rules, and decisioning rules at different organizational levels
- Expand channels and business opportunities through vendor portals and marketplaces
5. AI/ML-Infused Commerce Insights and Actions
Leverage advanced ML algorithms and AI capabilities to generate actionable insights and predict potential issues that will impact order fulfillment. Always-on algorithms run unsupervised, generating patterns and identifying anomalies, as well as structuring this data into easy-to-understand insight dashboards for powerful, data-driven decision making and full operational optimization.
Blue Yonder Order Management: The Fastest Route to Revenue
Bringing your wholesale distribution or manufacturing operation up to standard order management capabilities that are purpose-built for the complexities of B2B is far more cost-effective than you may think, and the benefits are nothing short of transformative.
Blue Yonder’s OMS microservices are easy to implement, integrate fully with existing systems, and deliver unprecedented time-to-value. Once your initial site is up and running, subsequent sites can be configured within a matter of days.
Scale at Your Own Pace
Due to their modular nature, Blue Yonder’s OMS microservices can be implemented to meet immediate needs, one at a time, and rolled out at your own pace according to your unique business and operational needs and objectives.
Quick to Train
Intuitive mobile interfaces can be mastered in just a few hours, reducing overreliance on tenured staff and streamlining the onboarding process.
Maximize Your Bottom Line With a SaaS-Native, AI-Infused OMS Solution From Blue Yonder
Digital transformation for wholesale distribution and manufacturing no longer requires an all-or-nothing approach. With Blue Yonder’s augmentative, composable OMS microservices, you can tackle your most urgent pain points one at a time, implementing the targeted solution you need to overcome immediate challenges while steadily building towards a future of total operational excellence.
Speak to a Blue Yonder expert today to find out how our purpose-built OMS microservices can help you optimize your operation, deploying industry-leading AI capabilities to capture value at every level.