---
title: "How to Become a New-Style Distributor in the New Era?"
description: "Digitalization is an inevitable path for all traditional enterprises, including distributors. It is an iterative process that, when it reaches a certain level, can bring about qualitative changes and unleash powerful efficiency. The current digital environment presents a great opportunity for traditional enterprises to achieve such transformation. This article shares methods for distributors to enhance their digital capabilities through 'calculation' and 'connection', such as turning cost centers into profit centers and adopting AI technology for efficient operations."
author: "徐永刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-07-03"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/how-to-become-a-new-style-distributor-in-the-new-era-04b33b0c.md"
original_source: "https://mp.weixin.qq.com/s/NTl_69be2-zAlylUncB0Mw"
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# How to Become a New-Style Distributor in the New Era?

> Digitalization is an inevitable path for all traditional enterprises, including distributors. It is an iterative process that, when it reaches a certain level, can bring about qualitative changes and unleash powerful efficiency. The current digital environment presents a great opportunity for traditional enterprises to achieve such transformation. This article shares methods for distributors to enhance their digital capabilities through 'calculation' and 'connection', such as turning cost centers into profit centers and adopting AI technology for efficient operations.

Click 'Read Original' for details.
**Digitalization is an inevitable path for all traditional enterprises, and distributors are no exception.** Digital transformation is an iterative process. Since humans first came into contact with computers, digitalization has existed, much like artificial intelligence, which was already being researched in 1965. It is constantly evolving, advancing from 1.0 to 2.0 to 3.0, and so on. Once it iterates to a certain level, it can achieve a qualitative leap and unleash tremendous power.
The current digital environment has reached a point where traditional enterprises can achieve a 'qualitative change' and leverage significant benefits.
From a macro perspective, enterprises only need to do two things to achieve digitalization: first, 'calculate', and second, 'connect'.
'Calculate' means accurately computing all kinds of data; 'connect' means connecting various intelligent hardware, software, internal systems (internal), and between enterprises (external).
For our FMCG distributors, how can they improve digitalization through 'calculation' and 'connection'? Below we list a few points to share with distributors:
**Method 1: Transform 'Cost Centers' into 'Profit Centers'**
Profit = Revenue - Expenses. This is a very common formula. In most traditional trading companies, only the boss truly cares about the 'profit' in the formula. Because of this, only the boss is particularly sensitive to the increase in expenses (costs) that affect profit. Market changes, unstable sales, and rising expenses put tremendous pressure on distributor bosses, making them anxious.
Other departments are 'cost centers' because they only consider how much work they need to complete and how much salary (expense) they will receive, without any concept of 'profit'. Does the finance department have profit? Does the procurement department have profit? - No! They only have specific work and the salary (expense) they pay out.
**'Profit' is the energy of an enterprise. If only the boss considers profit, it is like an old-fashioned train where only the locomotive provides power.**
Distributors need to use digital transformation to upgrade all 'cost centers' into 'profit centers', just like upgrading an old train to a bullet train, where every carriage provides power. Because each carriage has power, the bullet train's speed is dozens of times that of a traditional train!
To turn every department into a 'profit center', the most critical thing is that each department must have both revenue and expenses, and these must be 'accurate, real-time, and transparent'! All are indispensable. Then, closely link profits with key personnel in the department. If there is profit, share it with the boss; if there is no profit, the company provides a safety net. This is the so-called Amoeba model, where each department is an 'amoeba', and each amoeba has an 'amoeba leader'.
**To successfully transform a 'cost center' into a 'profit center', the following points must be grasped:**
1. Determine the revenue ratio for each department. Whether to allocate revenue based on sales percentage or quantity.
2. Ensure the correctness of data for each department. If the revenue that should be included is not added to the department, or if expenses that should not be deducted are deducted, the correctness is questioned, and the data will not be convincing, making the transformation impossible.
3. Ensure the timeliness and transparency of data for each department. Data must not be hidden by the finance department or the boss; it must be openly accessible to key personnel at any time. Department profits and expenses should be disclosed to key personnel, treating the department as a 'small company'.
**Method 2: Introduce AI Technology to Achieve Efficient Operations, Reduce Costs, and Increase Efficiency**
Artificial intelligence includes two aspects: one is machinery and equipment, such as robotic arms and AGVs; the other is algorithms, such as AlphaGo in the Go human-machine competition. These two are interdependent: algorithms are embedded in machinery, and algorithms are expressed through machines.
In addition to product costs, distributor costs also include personnel costs and warehousing and logistics costs. AI technology is not simply about 'replacing' a certain link; it can also disrupt traditional workflows and reshape new ways of working with higher efficiency.
**For example: The traditional warehouse picking (order fulfillment) method involves a picker using a small cart, holding a picking list, picking goods from storage locations, and then using the cart to place the goods in a designated area, where a checker performs a re-check.**
Because pickers are prone to errors, a checker position is needed. If AI technology is embedded in the picker's 'small cart', it can detect whether the picker has taken more or fewer items. By also embedding AI video technology in the cart to distinguish wrongly picked items, the 'small cart' can serve both as a cart and as a means of machine verification accuracy, thereby eliminating the need for a checker position. This saves labor costs and reduces the time cost of re-checking.
**The above is just a small application; there is even greater value. For example, in a traditional warehouse, all personnel work based on 'tasks'. Some are 'receiving', some are 'picking', some are 'loading', etc. These are all 'tasks' in the warehouse. But all personnel have busy times and idle times. When idle, they 'wait' for tasks (either waiting for other tasks to be assigned, or waiting for others to finish so they can proceed to the next step). 'Waiting' is a waste of resources, and this 'waiting' is fragmented time. But when you accumulate this fragmented time, you will find that each person's actual effective working time is only about 50%.**
When is warehouse personnel efficiency highest? When their hands and feet are always effectively working without stopping (except for rest time). When is logistics vehicle efficiency highest? When the wheels are always effectively rolling without stopping.
Once you grasp this principle, you know how to improve. But traditional management is difficult to achieve this; only through the comprehensive application of AI technology (handheld terminals, voice interaction, logic algorithms) can you reasonably allocate each person's work and make full use of fragmented time.
For example: Each person has a smart PDA. Through big data, the system calculates each person's work status ('idle' or 'busy', and what they are specifically doing), and pushes new tasks to idle personnel, just like Didi Chuxing or food delivery dispatching.
**Moreover, the warehouse operation mode changes from the original 'experience-based item finding' to 'navigation-based item finding' through AI technology, reducing the inefficiency caused by personnel not being familiar with products or storage locations. Inside the warehouse, voice navigation directly guides them to the goods.**
The application of AI technology can increase overall warehouse efficiency by more than 35% while reducing warehouse personnel by 30%.
Faster! More accurate! More cost-effective! These are important manifestations of distributor digitalization.
The value of distributor digitalization is numerous, such as profiling, which includes text profiling, graphic profiling, etc.
From August 22-24, New Distribution, together with Madeline, will visit Shanghai to learn about distributor digital transformation.
From August 22-24, the '2018 China FMCG Digital Innovation Conference (2018FDIC)', hosted by the China FMCG Industry Association and organized by New Distribution, with the theme 'Finding New Engines for Growth', will be held in Shanghai!
The conference will last 3 days and will focus on two main themes: marketing and supply chain, with six parallel forums on brand, channel, communication, B2B, local logistics, and innovative retail. We will invite industry leaders, CEOs, and brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry.
We will invite over 500+ FMCG enterprise executives, 200+ B2B industry CEOs, and 1000+ major FMCG distributors to gather together to discuss how the FMCG industry can use digital tools to achieve rapid growth again in the context of the digital era. This conference will build a bridge for brand owners, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers obtain the latest information, understand best practices, and master more practical transformation skills.
Invited Enterprises (tentative)
Conference Time
August 22-24, 2018
Conference Venue
Shanghai Baohua Marriott Hotel
Conference Agenda
August 22: Full-day check-in
Afternoon 14:00-17:30: Distributor local logistics parallel forum
Evening 18:30-21:00: New Distribution Night Gala Dinner
August 23: Theme: Marketing Digital Innovation
Morning 9:00-12:00: Marketing Digital Innovation Main Forum
Afternoon 14:00-17:30: Brand, Channel, Communication Parallel Forums
August 24: Theme: FMCG Supply Chain Digital Upgrade
Full day: FMCG Supply Chain Conference
Registration Method
Registration is now open. Long press the QR code below or click 'Read Original' to register. Limited-time special group purchase prices are available!
Registration Consultation
Ticket inquiries:
Media cooperation inquiries:
Highlights of New Distribution's Previous Conferences
Click the links below to review the highlights of the 1st, 2nd, 3rd, and 4th FMCG + Internet Conferences:
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