by 
Will Kibler
In today’s turbulent market conditions, authorized electronics distributors serve as key partners, forging an accessible path to hard-to-find parts for all market constituents. Choosing the right distribution partner has become a strategic imperative for component manufacturers and end-product buyers. Suppliers and OEMs should be asking their potential and current distributors one critical question: What investments are you making in the area of supply chain technology?
In the wake of Covid-19, the supply chain management (SCM) solutions market is projected to explode — largely because these past months have showcased the relative vulnerability of the supply chain and the need to improve its efficiency. This now-apparent need is driving significant investment in more supply chain technology. According to Verified Market Research, the $10.1 billion SCM market as of 2020 is projected to reach $19.3 billion by 2028 — that’s a 9.02 percent compound annual growth rate (CAGR). Analysts expect that manufacturing and logistics segments will account for much of the demand.
“The primary factor driving market growth is increased advancements in industrial-grade digital technology, an increase in preference toward cloud-based supply chain management software, and the demand for enhanced supply chain visibility,” according to the report.
Now more than ever, organizations value technology investment and systems capabilities of their partners. Strong relationships with business partners have been historically measured in lunch meetings and phone calls. And, while service capabilities and interpersonal interactions are fundamental to selecting a business partner, technology/system capabilities is now a critical third leg of the stool in that partner selection process. These investments help distributors maintain and support both supplier and customer relationships better than lunches ever can.
Technology provides various benefits, including increasing organizational efficiency, streamlining processes, and reducing errors. The right technology allows distribution employees to spend more time and attention on relationship building (both with suppliers and customers) and strategic business planning. Technology better enables these organizations to service customer demand for critical products, especially in market dislocations. Finding other sources of supply or creative ways of working with suppliers makes a critical difference.
The end-result is better customer service and more time/energy to proactively engage with business partners. An organization that has not yet leveraged technology to automate repetitive tasks is far more likely to get bogged down in transactional business relationships (e.g. taking orders, tracking orders, etc.) rather than collaborating on strategic imperatives to drive growth.
In an increasingly tech-centric world, staying on the leading edge of technology adoption is a key indicator of a distribution organization’s ability to capture long-term sustainability and growth. Continued, deliberate investment in systems and technology to create an intelligent supply chain will only become more important.
