What Is a Supply Chain and Distribution Network?

How Hardware Industry is Thriving On Their Supply Chain and Distribution Network

Randy Gonzales
by Randy Gonzales — 1 month ago in Supply Chain Management 3 min. read
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An efficient supply chain and distribution network are crucial for businesses in the hardware industry to be able to cater to growing customer expectations. Seamless communication between the two helps organizations provide product(s) to customers in a cost-effective and timely manner.

A study by Invesp revealed that 79% of companies with high-performing supply chains achieve revenue growth greater than the average within their industry.

Developing a systematic supply chain and distribution network involves building relationships with suppliers, identifying channel intermediaries, and streamlining delivery. It also comprises creating metrics that can help monitor and improve the overall process.

At the manufacturing stage, hardware products are thoroughly tested, packaged, and scheduled for delivery. In terms of supply chain management and distribution, this is the most metric-intensive stage.

Industrial hardware suppliers measure the production output and perform stringent quality analysis before dispatching. A robust supply chain and distribution network help hardware distributors take the least time to ship and meet customer expectations, thus contributing to sales volume.

What Is a Supply Chain and Distribution Network?

Supply chain refers to the network between the company and its suppliers to produce and deliver the product to its customers. An effective supply chain management ensures the timely delivery of raw materials so that the company can fulfill the orders.

A distribution channel refers to all the logistics needed for delivering a product from the manufacturer to the user at the lowest possible cost. A typical distribution channel in the hardware industry comprises wholesalers, retailers, and sales agents who make the product available to customers.

With a steady rise in e-commerce in the U.S, direct-to-consumer sales are gaining massive popularity. Industrial hardware distributors are ramping up their supply chain and distribution network to cater to this demand and increase their sales volume.
Also read: Top 10 Best Software Companies in India

How Are Supply Chain and Distribution Networks Helping the Hardware Industry Thrive?

Distribution channels and supply chains play a crucial role in mitigating the frictions in the hardware industry.  Let’s understand how each is contributing towards its growth.

1. Supply Chain

The supply chain is an integral part of the hardware industry. Here’s how it’s helping the industry thrive:

  1. Improves Efficiency

A well-optimized supply chain ensures smooth delivery of raw materials and provides real-time data on their availability so that there are no manufacturing delays. The data helps manufacturers and suppliers formulate strategies for sourcing materials from suppliers and ensuring a smooth delivery network. Without this data, companies can face issues such as out-of-stock inventory or late shipments to customers.

  1. Optimizes Cost of Shipping

The rise in shipment costs has made shipping optimization a necessity. Supply chain management helps identify the most efficient shipment methods for all types of packages to deliver products in the shortest time interval and at minimal costs. These cost savings not only help improve the bottom line, but are often passed down to customers as discounts.

  1. Reduces Overhead Cost

Demand predictions help businesses reduce overhead costs associated with storing slow-moving inventory. Supply chains provide manufacturers and suppliers with an insight into the existing market demand and an overview of existing low and high-velocity inventory.

Warehouse fulfillment costs significantly contribute to the overhead costs. Supply chain management reduces these costs by helping businesses optimize their warehouse layout and improve productivity by providing real-time data on inventory levels.
Also read: Best ecommerce platform in 2021

2. Distribution Channel

The distribution channel is the backbone of the hardware industry. Here’s how it’s helping the industry thrive:

  1. Provides Market Information

Distribution channels serve as a medium through which hardware suppliers can gain all information about the market. They help acquire information concerning demand, price, and competition in the market from all intermediaries involved throughout the channel. They also provide information about customer’s preferences and reviews, helping suppliers and manufacturers formulate product selling strategies.

  1. Maintains Product Stock

The distribution channel plays a crucial role in helping suppliers maintain sufficient stocks of goods. It helps determine the supply of goods according to demand and storing and delivering products from warehouses to customers. To sum it up, it helps avoid a shortage of supply in the market.

  1. Ensures Timely Delivery of Products

This is one of the most important functions of a distribution channel. It plays a decisive role in the delivery of products to the customers within the estimated time. A properly organized distribution channel helps suppliers ship their products without worrying about geographical barriers.

  1. Reduces Risks

Distribution channels save manufacturers and suppliers from the risk of delayed delivery. It is the duty of the intermediaries involved in the channel to deliver the goods efficiently and on time.
Also read: Top 6 Tips to Stay Focused on Your Financial Goals

Conclusion

Well-managed supply chain and distribution channels are essential for the hardware industry to ensure smooth delivery of products. To keep up with the pace of digitization and growing consumer demand, industrial hardware suppliers are now extensively optimizing and leveraging supply chains and distribution networks. This, in turn, is helping them provide timely delivery of goods and ensure complete customer.

Randy Gonzales

I am Randy Gonzales. I am the President of Elite Sales Inc, a rigging equipment and wire rope distribution company based in Miami, Tampa, Houston, and Dyer. I have more than 30 years of experience in the distribution and supply of industrial hardware industry.

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