When it comes to delivering products, distributors are increasingly being expected to act as the logistics partners of their resellers. Keith Anderson, COO: Axiz, explains that with this new role has come new challenges including those of maximising visibility and increasing security – all of which should be driven by an overriding commitment to create customer delight.
Logistics is arguably the driving force in the IT supply chain. Efficient delivery of products is critical to the success of the channel as a whole – from vendors to distributors to resellers. Because of the intricacies and challenges involved in the process, distributors like Axiz are finding themselves more involved in logistics: ensuring their products reach their destination safely, on time, and as promised.
The skills shortage and issues of security have definitely influenced our involvement in logistics as distributors. We’re now required to integrate downwards and backwards into our supply chain, and become logistics partners to our resellers. We’re thus delivering directly to their end users in most cases.
This has naturally added to our costs; something needs to be offset against the service provided. As a result of this, we’re seeing many distributors adopt the approach of delivering provided the stock exceeds a minimum value. In cases where it doesn’t, the reseller will be required to collect themselves.
Logistical challenges span everything from the more complex to the relatively simple. Crime remains arguably the greatest of these for the IT industry. While some companies have managed to address these challenges better than others, we’re all concerned about the increase in heists reported in the latest statistics released by Stats SA.
Our approach at Axiz has thus been to adopt extraordinary precautions when transporting stock. Our transport is outsourced and governed by an extremely strict service level agreement. In it we ensure that all vehicles transporting our goods have satellite tracking, and are linked to the outsourcer’s control room 24/7. Above and beyond this, if the vehicle carrying the stock deviates just 50m off its planned route the logistics company responds immediately.
Extra surveillance measures are also put in place as and when needed, and we never make use of branded vehicles. Certain deliveries over a specific value will also have tracking devices either incorporated into a piece of hardware, or packaged as hardware in these trucks to add an extra layer of security.
The unfortunate realisation of many distributors has been that most heists are dependent on an in-house informant. As such, Axiz has also put very stringent measures in place in terms of our staff. All staff are pre-screened when they join the company and we have a means of re-screening them should such an incident occur. This has proved a very effective deterrent, especially when coupled with the knowledge that Axiz does and will prosecute any criminal offenders.
Proof of delivery (POD) has emerged as an unanticipated challenge in taking on a more active logistics role – as without it no payment will be made. Axiz has developed a system whereby the POD is done electronically and thus appears on the system immediately. This has added exceptional value to the service provided to our clients, as well as reducing the time between delivery and payment very significantly.
Despite the challenges involved, we see the logistics space as one where we can definitely add immense value and drive our competitive advantage. Our main means of doing this is through the creation of “customer delight”.
Relationships are critical in our business. They add incredible value and often prove to be worth far more than cutting prices and increasing product availability. As such, it’s imperative to build on these relationships all the time. Everyone involved in the process from start to finish has to be customer facing and focused.
And, to improve upon processes and create customer satisfaction, it’s important for a company to follow an order through its supply chain – in the exact way this is experienced by a customer. In this way management can identify any breakdown in the process and act accordingly.
New software and hardware developments in the logistics space have additionally made it that much easier to enhance a customer’s experience. Optimisation is a perfect example of a trend influencing logistics very positively. Best in class companies are already using some form of inventory optimisation tool and thereby increasing visibility along their supply chains. This impacts on service and reporting functions, whilst enabling them to manage their cash better.
Another software development adding to customer delight is that of predictive analysis based on past orders. This has dramatically reduced distributors’ stock holdings and correspondingly increased their order fulfillment capabilities.
That being said however, Customer Relationship Management (CRM) is, I believe, the next big thing in logistics – set to change how we do business. By integrating CRM into your logistics application, a customer is able to view all of their delivery details online; checking where their stock actually is in the system.
This adds huge value throughout the process and creates a distinct competitive advantage. CRM additionally enables complete visibility from start to finish. By using the metrics your CRM application is able to generate management can react quickly to any problem, as well as consistently measure your company against them and drive improvements within the organisation.
By overcoming the challenges associated with logistics and concentrating on the competitive advantage it makes possible, distributors are quickly finding an added means of building customer delight into yet another aspect of the service they provide. With logistics applications developing and improving all the time, the IT sector as a whole looks set to benefit well into the future and provide a glimpse into what logistics can make possible for other industries facing the same challenges.