Analytics in Distribution: How to Use Data to Grow your Business
The wholesale and distribution industries are quickly gaining ground with using data to improve their organizations. Data-driven decision making is crucial to remaining competitive and unlocking growth in your business.
When it comes to data-drive decision making, there are four types of analytics:
- Descriptive (what happened?)
- Diagnostic (why did it happen?)
- Predictive (what will happen?)
- Prescriptive (how can we make it happen?)
Knowing how to analyze the data you have and apply what you are trying to study is the key to success in applying analytics to your business. If looking into how an industry is going to grow and mature over time, predictive and prescriptive analytics are going to be used rather than descriptive analytics.
Data analytics can be used to come up with strategies such as keeping a customer informed about the business, analyzing customer lifecycle, and identifying opportunities in the market for growth.
One of the biggest challenges of using analytics in distribution is getting a return on your investment. In order to receive a return on your investment you must create value and capture that value. You create value by using your assets and capital through inventory analytics, network optimization, and vendor performance. You capture value by using pricing optimization and marketing analytics. Once you create and capture the value you will see your return on investment through benefits such as improved inventory management, growth, profitability, and margins.
Many distributors are not happy with the implementation of analytics in their business, citing weak infrastructure, incomplete data, and not knowing where to start seeking the reasons the reasons their customers are not happy. In order to create effective analytics in your business it is recommended that you start small and build from there, prioritize training, and establish support from top management and work your way down from there.
How can you apply data analytics to your business?
It can be difficult to sift through these variable, and rapidly changing data analyticst trends. During these times, it is paramount to understand where your data is, so that you can best prepare your business for the upcoming year. Stop waiting and start implementing data analytics in your business to turn data into dollars. Contact a distribution expert at Barnes Dennig today! We’re here to help.