U.S. Wholesale and Manufacturing Closing the Electronic Supply Chain Gap

Supp Chain

The biggest beneficiaries of new technologies are the manufacturing and wholesale sector, not the private consumer.

According to a recent U.S. Census Bureau report, e-commerce sales represented 6.4% of total retail sales in the United States in 2014, significant growth compared to the 1.8% share a decade prior. Surprisingly private consumers are not the biggest beneficiaries of new technologies, but the United States manufacturing and wholesale sectors.  In 2014, e-commerce accounted for 60.9% of total manufacturing shipments and 27.7% of wholesale shipments were the result of online transactions.

Manufacturers and wholesalers are in agreement that adapting to e-commerce and internet based technology will be most important over the next five years in order to collect and analyze customer data and begin sharing it with trade partners in order to make supply chains more efficient, this according to a recent report by GT Nexus, an Internet-based procurement network.

“75% of respondents say digital transformation of the supply chain is important, but a massive gap exists today between where companies are today and where they expect to be in just five years from now,” says Mathieu Dougados Sr V.P Capgemini Consulting, and one of the authors of the report. The report adds that 95% of respondents expect within five years to have more automated data-sharing with trading partners, and 87% expect to have the ability to share immediate updates of production data.

A Big Gap Between Technology and Traditional Communication

  • 70% have begun implementing internet-based technology across their supply chain
  • 48% still rely mostly on traditional methods of communication like phone, fax, and email to connect with their supply chain partners

Traditional methods of communication across the supply chain create data-entry errors as product and shipping data gets manually entered, these errors also tend to slow the fulfillment process, the report says. Trying to manually keep your eye on your supply chain every step of the way is not good business. From manufacturing to wholesale to distribution to dealer to end user, there are multiple channels your products are traveling through. Through technology companies are able to analyze data with digital reports on sales forecasts and planned production, review P.O's, invoices and shipment notices, which in turn tends to foster collaboration between manufacturers, logistics providers and customers by sharing this data.

“In today’s globalized and outsourced world, digital transformation can only be successful if companies approach it with a holistic view of their entire value chain, from raw material providers, manufacturing partners and suppliers, logistics and transportation providers to retail and distribution channels.” Dougados says. “That value chain can include hundreds of partners. So connectivity between partners, cross-company access to data, and the use of network-wide analytics become the key focus areas.”

About the author:

Carolynn Pitcher Brescka is the founder of Building Supply Online Services. Carolynn has long been an e-commerce advocate and consultant within the building products industry working with many manufacturers, suppliers and distributors helping them realize their online potential.  By designing and implementing custom e-commerce solutions and training programs for her clients, Carolynn’s goal is to help companies within the building products sector grow their online business and help them capitalize on this high-growth sales channel.  She can be reached at carolynn@buildingsupplyonlineservices.com