For decades, independent industrial distributors have collaborated to create buying groups, which allow them to negotiate better prices, set up training programs, improve their bottom lines, grow, and manage supply chains. With the onset of CloudSourcingTM, the process becomes even more simplified, more efficient, and more robust.
Historically in the industrial world, independent distributors and suppliers have worked together (generally with the help of trade associations) to manage supply chains more efficiently and more affordably than they could individually.
These collaborative groups allow distributors to connect and place larger orders with suppliers—allowing them to get better deals, expand their supply chain, and save time. Some of these collaborative groups exist within associations and other trade organizations to help distributors unload unused or unsold inventory. With more members, better deals are struck while relationships are cultivated—even among competitors.
By embracing digital vendor managed inventory (VMI) platforms that utilize CloudSourcingTM, an even more robust option is available for distributors and suppliers to collaborate and manage their supply chains more affordably and efficiently.
What is CloudSourcingTM?
When it comes to supply chain management, there are many benefits of collaboration among distributors and suppliers. Perhaps the biggest benefits are expanding your network and, therefore, optimizing the bottom line.
Through Cloud Sourcing™, ShelfAware offers a collaborative approach to B2B supply chain management with the market’s first true omni-channel platform that accommodates both the physical (inventory—logistics, storage, tracking consumption, organizing, etc.) and the digital (data—analytics, forecasts, replenishment metrics, etc.) aspects of complex supply chains.
ShelfAware works as a third party for any supplier or consumer in various product verticals. For example, Eskridge is a company based in Olathe, Kansas that makes planetary gears and brake products for industrial and mobile equipment worldwide. Intelligent inventory management software tracks the consumption of four of their product verticals from four niche suppliers—all delivering to Eskridge’s facility through their supply chain with their own support and their own engineering.
The third-party company, in this case ShelfAware, uses a collaborative software platform with patented RFID technology to work with any supplier, any distributor, in any product vertical—ensuring that products stay on the shelf at the consumer’s facility.
Why is CloudSourcingTM Better Than Buying Groups?
CloudSourcingTM is a new approach to something that’s been around a long time—suppliers collaborating with other suppliers in a positive way. Fears and reservations are set aside about openly discussing business topics with other suppliers to bring value to existing groups. There is tremendous value in having a network or referrals with companies in which relationships have been established and built.
Suppliers and distributors can discuss which markets have traction and send each other referrals to a wide variety of untapped industries and consumers.
While associations and trade organizations continue to build collaborative buying groups, the one negative aspect is that they are generally limited to specific product verticals and industries. This creates more conflict and restricts opportunities. For example, seal manufacturers can benefit greatly from relationships with bearing manufacturers. That same seal manufacturer would have interest in a multitude of industrial industries, as well.
The collective group of collaborators can be diverse while also complementing each other. It lays the perfect foundation and ecosystem for professional referrals, allowing several suppliers to work together with the same consumer.
In addition, software platforms like ShelfAware ensure that collaboration can be autonomous and even anonymous, if necessary. The benefits of collaboration exist without the threat of sharing trade secrets with competitors.
Manage Complex Supply Chains with Collaboration
Implementing ShelfAware’s robust platform is often complex but does not need to be slow. It begins with a group conversation involving a mix of finance, operations and IT professionals. A site audit (often multiple sites) is usually required before a proposal can be made.
Final proposals usually involve a formal stocking agreement, installation fee, and a product pricing quote. Onboarding consumers varies widely, but the minimum time required to convert a supply chain in most markets is about three months.
Want to learn more about an affordable way to automate your supply chain? Request your free ShelfAware demo.
Too good to be true? ShelfAware is redefining the vendor-managed inventory industry. For this reason, we’re happy to talk to you about how our intelligent inventory platform can benefit your business. Contact us today for more information.