How Revenue Intelligence Can Help With Supply Chain Disruption
By now, you have likely heard about enormous supply chain disruptions being felt around the world. As distributors, this is not necessarily new—similar effects have popped up periodically long before the pandemic. But the last two years have shown that strains on the supply chain may be here to stay. While the causes are many and complex, revenue intelligence can help combat some of the most damaging effects of the disruption.
What is Revenue Intelligence?
The distribution industry has always been in continuous flux. As a result, there has always been a need to find new, creative ways to increase revenue and strengthen your customer base. This is why every distributor should care about revenue intelligence.
Revenue intelligence is the competitive edge distributors have when their data, analytics, and workflows are all laser-focused on driving revenue. When your CRM, BI, and Pricing software are integrated, sharing information across teams improves the selling process, which, in turn, helps grow revenue. The platforms help companies drive revenue growth by connecting all parts of their business that directly increase revenue. You may have an ERP or a BI tool or a CRM or a pricing tool. But revenue intelligence brings them all together and provides a holistic, transparent view that allows each team to know which KPIs they’re responsible for and how those KPIs influence sales.
Why is Supply Chain Disruption Happening?
COVID-19 Pandemic
It goes without saying that the pandemic has played an overwhelming role in the supply chain disruptions being felt by distributors. Moving product from all around the world was bound to be hit hard when lockdowns forced economic halts. And, even as operations reopened, uncertainty and lingering closures allowed for little more than sputters in the supply chain. As waves of variants continue, these challenges will too.
Shipping Challenges
Images of dozens of ships containing thousands of containers off the coast of California recently popped up online. Incredibly long queues to dock mean that there is an ever-increasing backlog of containers that need to be processed by skeleton crews. Furthermore, container ships are also dramatically increasing in size to consolidate loads and reduce costs of shipping. Only two ports, Long Beach and Los Angeles, are even equipped to handle such large ships, further compounding the problem.
In a hypothetical, but entirely real example, a shipping container could start its journey halfway across the world and travel two weeks by sea, sit outside of a port for another two weeks, then take another few weeks to finally be transported by truck to its final destination. Though oversimplified, the sentiment is the same: there are massive delays ravaging the supply chain.
A fundamental problem is that many businesses are still working with antiquated business models that should’ve been updated prior to the pandemic. Unfortunately, there will not be an overnight or even yearly fix to the supply chain disruption. However, there are things that can be done to reduce the most devastating impacts right now.
What Distributors Can do to Combat Supply Chain Distribution
In the long term, just-in-time inventory will likely fall out of favor in the future supply chain. Maintaining a “buffer stock” closer to the final destination will probably become commonplace. And the focus will all be on strategic supplies, procurement, and supply agreements.
However, in the short term, what we can do relies heavily on implementing technology that will ease operations and focus your strategy. Using revenue intelligence solutions can mitigate supply chain disruption and leverage your existing data to increase revenue, strengthen your customer base, and bring visibility to all aspects of your business transactions.
1. Use Your Transaction Data to Improve Operations
You’re likely already using an ERP to manage your business transactions. A great first step will be to leverage a business intelligence tool such as White Cup BI. To get through uncertainty, you must make decisions based on data, not guesses. Following your gut feeling may have gotten you out of trouble in the past but has no place in intelligent automation and optimization algorithms. Real-time data on inventory, your capacity, and logistics are irreplaceable when it comes to volatile conditions.
2. Get Informed About Your Pricing
Kneejerk price cuts in response to drops in business are a natural reaction to market speculation. After all, emotional reactions affect people from both a personal and a business level. However, similar to the analytics coming from a business intelligence tool, insights into your pricing strategy coming from a pricing tool like White Cup Pricing will always be superior to even the best sales reps’ instincts. Avoid preemptively dropping prices into the ground or overriding price targets. Instead, take an objective look at changes in recent revenue performance, customer transaction history and selling prices, and customer-specific price sensitivities. Then, assess and get granular about which prices can move or stay the same.
3. Bulletproof Your Customer Relationships
The last thing you want to worry about during times of volatility and uncertainty is losing your existing customer base. In a customer story last year, the Wine Distributor president stressed the age-old lesson that people buy from people. While data should guide business decisions, throwing reports and numbers at your customer won’t get you far. Use a tool like White Cup CRM to monitor customer behaviors and automate marketing. But, more importantly, use the data to know when it’s time to step in and provide genuine support to maintain customer satisfaction. Doing so will ensure that your relationships are long-term partnerships rather than short-term transactions.
Speculation about supply chain disruption and what will happen in the near and far future is all over the place. Again, distribution is no stranger to hiccups and surprises in production and shipping issues. Therefore, the key to continued revenue success will be implementing systems and strategies that mitigate uncertainty wherever possible. Take your data off the sidelines and into the spotlight.
