Built primarily for the manufacturing and distribution sectors, ERP tools present a bold new way for companies to operate. ERP systems tie together and define a plethora of important business processes – such as financials, HR, inventory and supply chain management, sales, customer relationship management (CRM) – and enable the flow of data between them. By collecting an organization’s shared transactional data from multiple sources, ERP systems eliminate data duplication and provide data integrity with a “single source of truth.” Today, ERP systems are critical for managing thousands of businesses of all sizes and in all industries.
Regardless of size, your ERP system should provide functionality for all of your business processes by streamlining them from one single database. But what happens if something goes wrong? Say, for a distribution company, if your run out of stock, or one of your delivery trucks gets a flat tire, or you miss a delivery date? Having an ERP system can alert you of any issues you may run into immediately, potentially saving you thousands of dollars.
Below are just some common issues that distritutors run in
Issues with stock and forecasting
What drives the distribution industry is the dependency on consumers to maintain the average sell rate and keep stock flowing. According to an article from e2bteknologies, the quick change in consumer spending and retail sales during economic ups and downs greatly influence the manufacturing of items that impact whether distributors wind up with excess inventory, insufficient inventory, or complete stock-outs.
That being said, a lot of wholesale distributors run into issues with supply chain management, which can affect their profit margin. Having a warehouse management system (WMS) integrated in your ERP system can help automate supply chain operations and send you real-time alert notifications, so you’re never left in the dark. A WMS can also helps provide structure in the workplace, both literally and figuratively. Kenco’s in-house research shows that this type of support boosts employee morale because knowing exactly where they should be and what they should be doing helps employees find fulfillment in their work.
Furthermore, the e2bteknologies article argues that warehouse management systems can help optimize important tasks like receiving, picking, cross-docking, compliance labeling, physical inventory counts, and shipping. This greatly affects the efficiency by allowing you to view any supply chain disruptions like bottlenecking and improve lead-time reliability.
Concerns with importing and exporting
Over the last decade or so, the amount of manufactured goods the U.S. imports has increased significantly. In order to meet the growing challenges of this, manufacturing companies have moved production to facilities abroad – which get very costly over time. Sikich.com says that since 2012, some manufacturers have actually been moving back to the United States to help reduce shipping costs and to consolidate their supply chain. Some companies stated that better access to skilled labor was their motive, whereas others acknowledged that being closer to their supplies and raw goods helped keep shorter turnaround times.
This was all made possible by the use of ERP software, which gave these organizations full visibility into their financials, inventory on-hand, shipments, and manufacturing processes at a glance. It allowed them to view their cost effectiveness of keeping their company in one location vs. spread out across the world. A wholesale distribution ERP system can help your company meet its goal to get product and services rapidly to the market by providing you with all this information from one central database, ready at the touch of your fingertips.
Benefits of distribution ERP
- Eliminate Data Redundancy and Errors: Data repetition and errors are a common sight when you use different software to deal with such data. With an ERP integrated to your distribution business, you can get rid of such inefficiencies and manage your business better by having complete visibility of all your procedures and operations.
- Increased Revenue Growth: Since an ERP is integrated with your business, most of your sales and revenue data are readily available and are updated in real-time. With this information, you can get a deep understanding of business revenue. You will be in a better position to identify and manage cost variances. You will also be able to allocate financial, human, and operational resources better. This will eventually lead to rewarding outcomes such as an upward revenue growth, business expansions, better-paid employees, etc
- Improved Inventory Management: An ERP system can save you precious time and money by eliminating the daunting task of manually process inventory management. Automated inventory management capabilities can improve your management processes by allowing end users to track and manage data across multiple warehouses – giving you real-time visibility to current inventory in transit and costs.
We suggest reading the full article titled, “Solving the Top 7 Wholesale Distribution Challenges with ERP” from e2bteknologies here for more information.
Looking for more? Download our ERP buyers guide for free and compare the top-24 products available on the market with full page vendor profiles. The guide includes four key capabilities to look for in an ERP solution, plus five questions to ask yourself and five questions to ask the software provider before purchasing. It’s the perfect resource for anyone looking to find right ERP for their business/organization.
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