Nov 13, 2024 // Michael Niehoff
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Wholesale is a central link in the supply chain that serves numerous sectors, including the food and beverage industry, mechanical engineering, the pharmaceutical industry, and the automotive industry. Developments in wholesale, such as digitalization, are therefore of great importance for the entire economy. This blog post examines the impact of digitalization on this form of trade and shows how AI-based software can optimize wholesale processes.
As a central element of the supply chain, wholesalers purchase goods in large quantities from manufacturers and sell them to retailers or other companies. This role in the value chain comes with a high level of responsibility: wholesalers often take on warehousing and ensure the availability of products. Due to their large purchase volumes, they often pre-finance with manufacturers to ensure continuous production.
Wholesale can be divided into different types: assortment wholesalers offer a wide range of products, while specialist wholesalers focus on a specific product group. Cash-and-carry enables direct purchasing on-site, while drop-ship wholesalers act as intermediaries without their own warehousing. Import and export wholesalers serve the international market, and producer wholesalers sell products directly from the manufacturer to the retailer.
Digitalization and the associated use of software offer considerable opportunities for supply chain management in wholesale. According to a recent ifo Business Survey, 22.6% of German wholesale companies are already using artificial intelligence (AI) in their business processes, and a further 16.7% are planning to do so.
Not without reason: decision intelligence (computer-aided processes) helps those responsible in wholesale to make smarter and more consistent decisions. By integrating AI-based software into wholesale business processes, decisions can be made faster, easier, and more cost-effectively than before. This opens up numerous opportunities for the transformation of supply chain management in wholesale.
Digitalization enables wholesalers to increase their operational efficiency by automating and optimizing extensive manual processes, such as orders, using decision-intelligent software. This, in turn, reduces stress in employees' day-to-day work and lowers the error rate in these processes. Supply chains in wholesale are global and often very complex. Supply chain management software helps to provide a better overview and control of the processes within these supply chains. Digitalization and the use of AI-supported systems provide wholesalers with the necessary transparency regarding important data and help them evaluate it. For example, software can be used to create demand forecasts that help wholesalers plan and optimize their stock levels more proactively and save costs.
Thanks to improved planning and the transparency gained, wholesalers can also react more quickly to external influencing factors, such as geopolitical and trade policy events, and minimize their risks for the supply chains. The increased responsiveness helps wholesalers to ensure their ability to deliver even in the event of fluctuations in demand.
This increases customer satisfaction, as customers increasingly expect flexibility and speed in order processing from wholesalers. Through digitalization and the use of AI-supported supply chain management software, wholesalers can fulfill customer requests faster and continuously develop their services in a market-oriented manner.
Digitalization and data-based decision-making are, therefore, essential for the competitiveness of wholesalers today. Decision intelligence (DI) in supply chain management makes it possible to make well-founded decisions based on precise and up-to-date information. This is particularly valuable in times of highly dynamic markets and unstable supply chains, as decision-makers can use decision intelligence (DI) to continuously adapt their business strategies to changing current conditions.
Despite digitalization, human skills remain indispensable for successful supply chain management in wholesale. The shortage of skilled workers is, therefore, also a challenge for wholesalers. According to the KfW-ifo Skilled Labor Barometer, the shortage of skilled workers is currently hampering 27% of companies in the wholesale and construction industry and remains at a high level. AI-based supply chain management systems help here by relieving the burden on existing employees through automation and providing them with efficient planning tools. These systems take over routine tasks and free up time for strategically important activities. This, in turn, also has a positive effect on operational performance and increases employee satisfaction in wholesale.
In summary, it can be said that digitalization and the use of decision-intelligent software are essential to successfully mastering the many challenges in wholesale. AI-based software optimizes inventories, increases transparency and delivery capability, makes it easier to deal with increasing complexity, reduces operating costs, and enables fast, data-based, and actionable decisions. Digitalization in wholesale is, therefore, not only an opportunity but also a necessity in order to increase efficiency and resilience and remain competitive. Supply chain managers in wholesale should, therefore, not hesitate to explore the possibilities of decision-intelligent software solutions. Well-thought-out digitalization in wholesale can make all the difference - and set the course for successful supply chain management.
What measures are you taking to promote digitalization in your company and the use of AI?
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About our Expert
Michael Niehoff
Expert for Supply Chain Optimization
Michael Niehoff has been working for INFORM GmbH in the Inventory & Supply Chain division since 2010. As a supply chain expert and passionate salesman, he is one of our first points of contact for interested parties. He guides them through the decision-making process and supports them in selecting our AI solutions for supply chain optimization.
