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How the Chief Information Officer Role in the Distribution Industry Affects Your Business

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The traditional role of the chief information officer (CIO) is quickly evolving to meet a new strategic business need revolving around how distributors interact with their customers.  More than just installing software and using social media, CIO’s are now being relied upon to find innovative and value-added technologies that will change how distributors interact with customers that can improve profitability and lead to business growth.

In “The Strategic CIO” posted by Jonathan L.S. Byrnes on Modern Distribution Management, Byrnes explains how the CIO has gone from integrating business software, such as accounting, inventory, and other core functions, to finding new ways to integrate business with customers.  It was once very economical and profitable to mass market products, mass produce them, then distribute them to as many customers as was possible.  Working on a large scale brought down costs across the board due to the large economy of scale.  Now, instead of investing in the efforts to saturate the marketplace in hopes of covering all the bases, distribution companies are investigating how to be profitable in a more precise manner.

Your customers have different needs and how they interact with you is different.  If you build the right infrastructure to address these differences, you will create greater efficiencies on how you interact with customers, which will lead to greater profitability and business growth.  Byrnes defines four types of customers in his article:  Strategic Accounts that will form an integrated supply chain partnership; Integrated Accounts which are large, but less willing to integrate; Emerging Accounts that are smaller and innovative; and, Stable Accounts which are also smaller and less willing to innovate.  Not all of your customers are technology-savvy.  The Stable Accounts, for example, might fax or phone in orders instead of using your portal or online ordering.  However, your Strategic Accounts are larger in scale and will be more willing to work together to develop a long-term business strategy.  For example, integrating both company’s supply chains and systems to offer vendor-managed inventory instead of discrete orders.  By integrating systems, you could bypass the distribution center to get products from vendors to the retailer’s store shelves faster and more economically.

How we do business and interact with customers is constantly evolving due to advances in technology and customer demands.  As we shift from mass production to a more customer-focused marketplace, the CIO is tasked with finding the right software and technology to help their distributor succeed in this new marketplace.  Contact RockySoft for additional information on choosing the right software to maximize efficiencies and profits, as well as drive business growth.

By Jeffrey Porter with RockySoft, Microsoft Dynamics software provider for demand planning

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