It is essential for distributors and retailers that track deliveries to have visibility on stock moving from the warehouse to the retailer, states software provider Cognizance MD Andrew Dawson.
“Stock is the lifeblood of any distributions company, as most distributors will distribute stock on behalf of clients at a margin, but these margins are often small, depending on the stock that is sold,” he notes.
Therefore, knowing where stock is, where it is going and how long it has taken to get there, is vital. It is about having an intelligent platform that notifies when the product is not where it should be, as this is going to cost companies money if not addressed, he adds.
Dawson highlights that, while South Africa is an emerging market, there are sophisticated transport mechanisms available, but despite these mechanisms, security concerns over stock being targeted by criminal groups remain.
This adds to the importance of stock visibility, he argues. Tracking and validating moving stock and having that stock received in a secure environment – while scanning stock going in and out of a warehouse through an enterprise resource planning (ERP) system – are all crucial for securing stock.
This adds to the importance of using digitalisation to confirm stock movement and react to changes in such movements in real time.
Dawson stresses that having a ‘line of sight’ of stock through the supply chain is also valuable, as data can be captured and used to meet supply and demand trends.
“The key is having a flow of data from your ERP system, and all that data needs to pass through an intelligent platform to allow for real-time notifications of opportunities or problems. This is becoming a prerequisite requirement for distributors, particularly as the economy is getting tighter.”
Last year, software company Cognizance Processing, which provides a cloud-based data lake structure that has real-time analytics and notifications capabilities, launched their platform with the CA&S group to enhance the Distribution analytics capability.
“We’ve aligned this platform to the different distribution companies’ operations where Cognizance is designed to absorb the stock and sales data from ERP systems. “Using the intelligence in the platform and the experience of the executive and operations teams on the ground, we built capability to track and manage stock movement, and more importantly, have automated actionable insights to drive revenue optimisation.”
He points out that Cognizance Processing has enabled distribution companies to take the data, place it into a data lake system and mine it in order to effectively drive the direction of the sales team to take advantage of revenue gaps
Dawson adds that having an intelligent layer of data handling can assist distributors and retailers in streamlining their stock holding.
These capabilities can assist in understanding such elements as shifts in community spending trends at a retailer, and can help determine what these trends would mean for loads being delivered from the distributor to service that retailer.
Further, Cognizance Processing uses machine learning to quantify rate of sales per product using sales in data to retailers, and as such can help retailers carry just enough stock for the ensuing period.
The company also provides a live view through dashboards, and performs automatic reporting to key personnel so that the right message goes to the right person – this is where the company is making a significant difference in the distribution space in South Africa, says Dawson.
Dawson contends that just-in-time manufacturing and delivery – a workflow methodology that is used to reduce flow times in production systems by increasing efficiency – can help eliminate dead stock or stock-outs in the warehouse.
“If a manufacturer can produce enough goods to meet its sales consumption expectation, it’s the most profitable point to be at. This is not achievable, however, without artificial intelligence playing a role in automating the output from data sets and being able to immediately action the intelligence being delivered from the platform.
A key factor in achieving such manufacturing and delivery is transparency and collaboration between the principal distributor and retailer, as this will ensure availability of the necessary granular data.
This collaboration also contributes to all parties being at their most profitable, which means that the consumer will be in a position to get the best possible prices.