An integral part of supply chain management is gathering information about customers and properly analyzing that data.
Of course, data comes from all different places. If you have a computer, you’re getting data from sources like Twitter, LinkedIn, Facebook, blogs and more. The typical distributor doesn’t have a data department. In fact, they don’t even have a data analyst on staff.
So, what is a distributor to do with all of this information? An article on the Industrial Supply Magazine website offers three suggestions for making the most out of Big Data.
1) Have goals: This is a great place to start. Distributors need short- and long-term goals for what they want to do with data and how they plan to turn it into meaningful information.
2) Develop Customer Lifetime Value: Here’s another Key Performance Indicator to measure. Measuring CLV sounds simple, but it’s actually quite difficult. Think about everything that goes into determining what a customer means. Sure, they might be a large customer and quite profitable, but don’t forget to consider the “soft stuff.” Are they a hassle to do business with or easy to work with? Do they require you to keep special parts around? Do they pay on time? Do they refer other business? That all must go into the CLV metric.
3) Find additional value: For the typical medium-sized wholesale distributor, 80 percent of their operating profits will come from about 50 customers. That’s why it’s so important to protect those 50 customers and create a layer of insulation between them and your competitors. Distributors must protect big and profitable customers.
Additionally, expect to see business intelligence software become increasingly popular among wholesale distribution businesses as they look for ways to make sense out of all this data.
Source: Industrial Supply Magazine