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Production Volumes Will Test B2B Omnichannel

Omnichannel sales and distribution is to the supply chain what big data is to IT — everyone is talking about it, few have really captured its full potential.

In our most recent edition of Avnet Supply Chain Velocity, our cover story looks at omnichannel and its potential within the industrial B2B space. As I noted in the article, though omnichannel is most commonly associated with the retail B2C supply chain, I believe that in some respects, members of the electronics supply chain have been implementing a form of omnichannel since the widespread adoption of EDI in the early 1980s.

Still, while real-time, multi-channel availability exists, it is limited. As a B2B customer, you can order over the web, pick up the phone and talk to someone, or use a mobile app to pay for your purchase with a credit card. However, this capability in our industry tends to be focused on engineering or prototype builds, and servicing the design engineer with data and samples.

Though there is definite value to providing multi-channel access to engineers, this is a fairly finite space. The real test of omnichannel's potential in the industrial B2B space is in the production arena. Can an omnichannel strategy support production volumes?

This is a horse of a different color, and the answer is highly dependent on the lens through which we view the issue. A distributor like Avnet has supported production orders through multiple channels for many years. The component manufactures are a mixed bag. Some are positioned to handle just about anything a customer throws their way, others have a much more difficult time servicing more than just a few direct customers.

Why is omnichannel capability so important for B2B? I could provide a swath of market data to demonstrate the omnichannel opportunity, but the bottom line is that no matter what industry you are in, how groundbreaking or routine your product is, how many items you sell to whom or in what region, every transaction is essentially an agreement between two parties: a seller and a customer. And these days, customer experience (CEX) is the new holy grail of sales and marketing.

Customers in all B2B markets, up to and including the electronics supply chain, not only want and demand the right product at the right price at the right time in the right location, but they are increasingly expecting to get all that with the same convenience and ease of use they experience when ordering through Amazon or any other advanced e-commerce engine. In fact, according to a report on B2B commerce trends from Oracle, 80% of B2B companies “recognize that their customers' expectations have changed due to B2C retail practices.”

The more retail e-commerce giants like Alibaba and Amazon influence the purchasing habits of consumers, we can expect these consumers to bring these expectations into their work lives, further altering the character of B2B commerce. Therefore, to remain competitive, companies within the industrial supply chain must add CEX to their to-do list, and omnichannel has become an essential element of the new customer satisfaction profile.

There is no doubt that the road to omnichannel is going to present some unique challenges for our industry. Industrial supply chains in the tech sector have very long lead times with $100s of billions in capital investment behind them as well as technology road maps that take years to unfold. As a result, I think in the industrial space the omnichannel strategy will be as much about how the long-term supply chain is managed as it is about how the final sale takes place.

Either way, ominchannel is definitely on the B2B horizon. How are you planning for it?

1 comment on “Production Volumes Will Test B2B Omnichannel

  1. Williamson
    June 3, 2014

    Interesting article. Not only retailers but other industries too benefit from omnichannel sales. In a fast-paced marketplace instilling best practices that facilitate automation and minimize waste is key to managing operational expenses and supporting business growth. I work for McGladrey and there's a whitepaper on our website that readers of this article will be interested in @ http://bit.ly/1kgYXWo

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