Digital Culture Mindset
as pre-condition to determine success
If we talk about the importance of digitalization for companies, we find three types of behavioural patterns:
1. Passive Implementation
The global online market is a result of the implementation of digitalization and technology in business processes, a permanent evolution of the market itself. Companies of this type of behavioural pattern accept the existence of the global online market but don’t really understand the role digitalization plays in business processes. For them, launching an e-commerce business like an online-shop means participating in the global online market which is right, but an insufficient mindset. Digitalization is seen as gadget or feature that supports their business like the usage of newsletter programs. Hence, they go with the flow but don’t take advantage of the entire potential digitalized business processes come along with.
2. Rejection of Implementation
On the other hand side, companies that totally miss out the evolution of a digitalized business environment, will need to face the extinction of their business. They stick to an old-fashioned and outdated mindset based on their own experience or needs rather than on customers‘ feedback and desire. Digitalization requires the steady improvement of softskills whilst leaving the comfort zone. Hence, this group of business men tend to avoid the adaption to an evolving business environment, consequently loosing marketshare to competitors instead of elevating their capabilities.
3. Active Implementation
Companies primarily exist to make profits, hence you need to give digitalization priority, integrating it as major key to success. A dynamic mindset is an essential precondition to recognize the potential of digitalized business processes and implementing them. I advise you to always analyse and reconsider workflow, decision making process, supply chain and so forth. To do so, the tracking and evaluation of your records might be a helpful source, also comparing your business performance with those of your competitors. In addition to that, there is a vast number of online blogs and newsletter subscriptions that keep you posted. But, everything starts with a dynamic mindset.
In fact, digitalization has big impact on processes and operational systems, especially for wholesalers, but improves the workflow of retailers and manufacturers, too. If we focus on wholesale distributors, digitalization allows them to engage along the entire supply chain, upstream to suppliers / manufacturers and downstream to retailers / customers in various ways. Hence it eases and improves reactions against supply chain disruptions or provides customer feedback. Of course, it is extremely hard to compete with Amazon, Alibaba and other global players but implementing digitalization as key to success enables you to come at least close enough to gain marketshare and evolve continuously.
Buyers Evolve
As digitalization evolves, so do wholesale buyers and end customers. Hence, a dynamic mindset enables you to act directly to any changes. Technology and softskills are adapting fast to new standards, standards that you can influence within your scope of business. Using mobile or tablet devices shapes behavioural patterns but also expectations of wholesale buyers and end customers. Decisions making doesn’t need to take much time anymore as e-resources exist. Hence, it’s up to you, how dynamic you perform. For instance, there is no need anymore for print media like catalogues, leaflets, order forms in mass distribution like in the old days as most wholesale buyers and consumers expect instant gratification and information on pricing, availability, confirmation and tracking status which should be available anytime, anywhere, via any device. As e-sourcing shifts on a very impersonal level, customization needs emerge as well as the need for greater product choices. This e-revolution goes hand in hand with the need for trust, provided through advanced policies like consistency in price and experience, transparency and accurate information on shipments, faster delivery options, and greater choice of payment methods.
Roles Evolve
Time changes rapidly, having an impact on all participants of the supply chain, but on wholesale distributors the most as trade channels are blurring. Manufacturers experience a variety of new options and methods to directly reach their consumers. Retailers’ position changes too. Gaining more marketshare by using new channels to offer wider assortments faster and value added services to customers, using the same strategy for e-sourcing products in order to obtain better prices. Retailers are enabled to purchase directly from manufacturers which does not only effect pricing, it leads to shorten lead times, and enables retailers to create their own brands (OEM/ODM) which results in a development of customer loyalty. Needless to mention that similar trends happen on the B2B side where industrial buyers are able to research and connect with their suppliers directly via e-resources. Hence the entire supply chain experiences a non-linear shift, deriving from digitalization.
Values Evolve
Business operations should be based on transparency and accuracy, but in the digitalized economy, another key is crucial – speed. The simple reason is that no participant of the supply chain wants to wait 24 hours to receive any notifications like order confirmations, shipment notices etc. Wholesale distributors are expected to be easy to do business with and to support the participants’ ongoing businesses to optimize profitability as well. Those participants don’t want to manage all those paper invoices or any spreadsheet attachments over e-mail, even telephone calls are outdated as these antiquated methods consume resource time and can lead to more errors.
Optimize the Supply Chain
These days it is not sufficient anymore to only have the best purchasing and sales team. Wholesale distribution models require to become commoditized. Beyond differentiating, they need to evolve as well. Wholesale distributors are required to create and redefine value propositions, they need to fill those gaps that manufacturers and retailers are unable to fulfill. Sometimes, it is necessary to even change the business model. For instance, wholesale distributors can offer e-commerce and direct-to-consumer fulfillment, including value added services, such as OEM, labeling, packaging services, or even drop-shipping and final assembly.
Technology is advancing and causing wholesale distributors to adjust the business model to e-commerce, the digitalized way of operations in order to keep up with the evolving market and expectations. Despite the focus on the e-commerce side, there is a substantial lack of emphasis on supply chain processes. That risks profitability and expectations like the inability to deliver products to customers at their speed. Of course that leads to a series of errors and uncertainty in the supply chain. There are many wholesale distributors facing the vast burden of too complex and inflexible IT systems, often too expensive to maintain anyway or even to update or replace. Especially large companies have accumulated these complex IT systems, making a change to a huge issue in order to combine and extract relevant data. That is the reason why so many companies have difficulties to respond with agility and accuracy. The lack of transparency is one more issue which effects any adjustments. Talking about the electronic way of operations, all systems need to be linked with each other and integrated, such as management, transportation, warehouse, customer relationship systems. The consequence is that it might lead to various problems like inaccurate invoices, and incomplete or late customer shipments. Existing company culture and routine block many wholesale distributors to transform and evolve even though understanding these issues. After some time, companies loose their sensitivity and are more likely to hesitate to move on.
Draw a Plan
When we talk about digitalization it is not simply something like creating fancy portals and website facelifts. It is about facing the change and rethinking all supply chain processes, removing manual processes and optimizing responding systems. The best way to realize the vast development of the digitalized supply chain processes is to foresee trends and get information about technology capabilities, to align with all expectations of the participants along the supply chain, to identify the best roadmap to cope with the change and achieve the objectives based on current infrastructure, constraints and budget. The safest way is to start with prototypes to improve profits, to validate ROI potential and to test the entire operational processes.
Hence wholesale distributors and business men in general, can optimize the way they engage with all the participants along the supply chain and keep up with the tremendous speed the digital market changes by implementing digitalization as key to success. That requires also to develop a digital culture mindset within your company.