Advantages and Disadvantages of Industrial Distributors

6/26/20 10:30 AM

Industrial distribution is the process that pertains to moving manufactured goods from industrial manufacturers to consumers. Industrial distribution is a key component within major industries and it is essential to have the most thorough and knowledgeable workers within the industry and your organization. 

Advantages and Disadvantages of Industrial Distributors

Individuals that find themselves working in industrial distribution will blend their skills and knowledge pertaining to communication, finance, engineering, and statistical expertise, in addition to a basic training degree in engineering, distribution management, and supply chain logistics. All of these companies that are involved in industrial distribution account for a substantial amount of money in business annually. This overall system within industrial distribution establishes clear advantages and disadvantages to industry and product end-users. Within this blog, we are going to discuss the advantages and disadvantages pertaining to industrial distributors. 

Advantages and Disadvantages of Industrial Distributors 

The advantages and disadvantages of industrial distributors includes the following: 

  • Cost/Speed - A distribution system can create advantages and disadvantages when it pertains to consumer costs. For example, if a local purchases a product that is created or manufacturers by a regional company or organization, the overall cost to move goods to an industrial distribution center and ultimately transport the goods again to a retail outlet can add unnecessary costs over simply delivering the items from a local manufacturer to a local retailer. Having said that, manufacturers that are serving substantially large geographic regions will save money over the Direct Store Delivery (DSD) system through allowing large quantities of goods to move throughout the country at a much lower cost as opposed to transporting a small number of items as the product continues to sell. 
  • Inventory - Having a planning advantage in using industrial distribution centers to store any finished inventory and parts and materials for manufacturing is a must. Any inventory from large multinational corporations stored at regional distribution locations can arrive at retail outlets rather quickly to restock empty shelves. It is a complex task when attempting to calculate goods that are available at a given time considering that distribution centers store substantial amounts of inventory at a given time. Companies and organizations used to be able to calculate warehouse stock rather quickly, but not are faced with the challenge of collecting data from all centers before arriving at an accurate inventory amount. 
  • Innovation - Companies will discourage innovation if it fails to use components and materials available in distribution centers due to the extra costs associated in moving supplies for the new goods. Innovative industrial goods failing to conform to shipping standards and handling processes will also face problems in a manufacturing system that is focuses on industrial distribution. Innovative and unusual manufactured goods that fail to feature surfaces for barcodes, standardized shipping protection, or unusual packaging require hand processing will face slow processing at distribution centers and create higher costs for manufacturers and distributors. Therefore, companies discourage staff from introducing new goods with these added costs. 

A software that can aid with adequate industrial manufacturing and handling inventory needs is PlanetTogether’s Advanced Planning and Scheduling (APS) Software. Advanced Planning and Scheduling (APS) Software is a must for manufacturing operations around the globe that are seeking to increase operational efficiency and ultimately increase profitability within the organization. 

Advanced Planning and Scheduling Software 

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

  • Create optimized schedules balancing production efficiency and delivery performance
  • Maximize output on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to capacity
  • Enable scenario data-driven decision making

Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

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Topics: Industrial Distributors

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