In a supply chain, a distributor, or a retailer, is an entity that brings together raw materials/goods and finished products. In general, the distribution process consists of first bringing the materials into a physical plant from where raw materials are extracted and later used in production processes. Often, the finished product is then taken to stores for retail sale. In today’s world, these terms often refer to a distributor of any good or service. The fact remains that these distributors act as suppliers to many businesses.
The distribution process between suppliers and manufacturers/retailers is referred to as the supply chain. In supply chains, there are three phases – sourcing, production, and retailing/consignment. In sourcing, the manufacturer or retailer search for the appropriate suppliers who can supply the requested goods and services. They then inspect the facilities and resources of the supplier, compare prices, and set up a contract. For production, raw materials and parts are gathered in one place and machinery and equipment are added to increase production capabilities.
Vending machines and shelves must be constantly upgraded. This is how companies remain competitive. When it comes to suppliers, both manufacturers and distributors must maintain strong and effective supplier relationships for smooth operations. Good supplier relationships can save time, money, and ultimately, provide quality output. The challenge for both vendors and suppliers, therefore, is developing the right data management systems to manage their relationships effectively.
Data management is the core function of any supply chain system. It involves storing, tracking, and analyzing information regarding the relationships among vendors. This information allows manufacturers/distributors to make informed decisions about the suppliers and the products they distribute. In addition to facilitating efficient supply chains, data management systems allow vendors to track the relationships between them and the other factors that affect them such as customer preferences, financial needs, etc.
In order for any business to survive, it must be able to withstand sudden and unforeseeable disasters. The same is true for any business that aims to remain competitive. The failure to keep pace with technological advances could result in losses. Good suppliers help vendors maintain a strong foothold in their markets. Without them, any small business will find it difficult to obtain raw materials, machines, and other essential items that help them build their businesses.
Every vendor and distributor should develop strong supplier relationships to survive in the market. Good relationships between suppliers and distributors to help ensure that the costs of running a chain are kept at reasonable levels. Ultimately, the cost of producing goods for customers becomes less expensive because the number of entities involved in producing them (from suppliers to wholesalers and retailers) gets smaller.