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Using Software to Connect with Suppliers
For a distributor, using software to directly connect with suppliers can literally transform a business, in some cases, adding millions of dollars to the bottom line. Supply chain software streamlines the processes from manufacturer to distributor to consumers, eliminating much of the need for warehousing because product is obtained directly from manufacturers.

In some cases, it is just a portion of inventory that is ordered directly without being warehoused in between, in other cases, it is nearly all of it. However, suppliers are not always easily convinced that such systems are beneficial to them and may be reluctant to enter into the necessary agreements to foster such an arrangement. After all, working within an automated supply chain system fundamentally changes the way the supplier does business too.

Distributors have, at times, had difficulty convincing suppliers to enter into an electronic exchange of information for the benefit of all parties involved. For the supplier it means purchasing compatible software, training people to operate it, and shifting business from standard spreadsheets to online functionality. In essence, the supplier has to change the way it works, a difficult task even when the benefits are transparent, and nearly impossible when they are not.

In order to convince suppliers of the efficacy of such a system, distributors often have to convince suppliers that it will result in more business from them and others. That often times means meeting with the highest levels f supplier management and convincing them that cooperation is critical.

If distributors face difficulty in convincing suppliers, sometimes even greater resistance comes from within their own organizations. Operations personnel, the people who run the supply chain on a day-to-day basis, are accustomed to particular methodologies. They are used to dealing with phones and faxes, and are as resistant to change in traditional ways of doing business as anyone else. Yet, in order to implement functional supply chain software, employees have to learn new systems and new ways of doing their jobs.

Some companies have found it prudent to hire outside consultants to help train reluctant employees and/or provided incentive programs for those who adopt the new systems. A practicable system requires investment from all parties within a distributors organization, from upper management, IT, logistics, and procurement divisions.

Rather than trying to over-customize existing software, some companies have found value in shopping around for a software vendor that will design a system with the distributors particular needs in mind to begin with. In order to keep employees invested in the entire process, decision makers need to consider everyones needs when designing such a system. When employees are involved from early on in the process, they are much more anxious to make certain that it works in the end. Once employees understand their part in the process and that their participation in the system is critical, they are more likely to buy in.

The distributor that is considering converting to an electronic supply chain system for the first time must carefully consider all parties involved and get them on board with the process in order for it to be a success. Suppliers have to be convinced that it is beneficial in the long run and employees have to be convinced that they are playing a critical role.



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