Distributors need to share operational and inventory data with decision makers to enable high quality, relevant and appropriate strategic action. The processes in the distribution domain are very complex involving many stakeholders across geographies and multiple products that are controlled with many data variables that are in a state of constant flux that impact effective decision making. The older ERP systems cannot hope to cope with the pace, timeliness and accuracy that is required for the market scenarios of today with the high volumes and complexity of data. The right ERP can leverage this data for effective decisions in real time and can be a source of great competitive advantage for a business.
The following are the major functionalities that the right ERP can offer in the distribution domain:
- It can manage all of the variables that affect stocking level decisions – from sales trends to production times – by being able to identify seasonal trends; keep a real time view of inventory status, allocations and shop floor capacity; providing up-to-the-second dispatch information for better scheduling. It is possible to optimize the balance between the costs of carrying excess inventory with the risk of not having the stock.
- Materials Requirement Planning (MRP) can be automated with no compromise on accuracy to provide the basis for better purchase decisions by better estimation / calculation of sales forecasts, lead times, capacity constraints, transit times etc even in the most complex type of supply chain. With more accurate MRP calculations, you will optimize cash flow, production schedules and provide on-time delivery to your customers.
- When you share inventory and production information with other stakeholders across the supply chain you can build relationships and profitability. You can simplify order processing and status updates for your distributors and direct customers; promotion programs can be designed to help distributors even out seasonal sales dips; insights can be generated into production and shipping delays, allowing you and your customers to mitigate the situation; quicker responses can be made to supply chain disruptions including natural disasters.
- Automating the operational functions of purchasing work flows that route approvals, track back-orders and simplify reporting allows purchasing agents to focus on creating savings on terms of time & money due to insights on sales trends, inventory levels, production plans and supply chain. Purchasing agents can improve holding times for materials and continuously improve sourcing by monitoring potential and current suppliers to ensure high service levels and the best pricing, transportation costs, transit times etc possible.
- Through inbuilt features you can take into account factors including volume, expiration dates, recurring orders etc and optimize your warehouse layout, picking and replenishment processes that will generate recommendations for received item placement based on preset rules for even multiple warehouses; automate order packing using bar code scanning and workstations that print invoices, packing slips and package labels; manage your preferred picking style, minimize picking areas, and perform wave planning to eliminate needless item movements; identify and isolate inventory for customers with negotiated availability agreements; optimize placement and fulfillment based on expiration dates.
- Improve customer service through consolidated inventory information to provide full access to data on inventory availability, order workflow and shipping progress – regardless of location. You can automate notifications for all orders to keep customers informed of order status and potential delays; integrate ERP and your e-commerce portal to reflect actual inventory levels; support online order placement with automated order confirmation and status notifications. This real time insight into inventory data will cut your costs by reducing overstocks, losses in customer sales and the need for using high cost priority shipments to cover shortages.
- The right ERP will allow you to scale the business to meet higher demands without adding more people. Productivity will be gained through centralized information so that employees find the information that they need without searching for files on multiple system; bar code systems that optimize inventory process in minimal times; standardized processes that make tasks easier; integrated systems that eliminate double entry and time- consuming data consolidation for reporting. As your company grows, more people are involved in the business processes, the number of transactions increases and the possibility for mistakes goes up if process automation is low. With an integrated ERP system, you can automate processes across departments to eliminate bottlenecks and double entry. Workflow automation eliminates unnecessary or repetitive business processes that keep your employees from doing more value adding work. The more time your employees can spend working directly with customers or engage in effective work that is line with your business objectives, the better value you can get from their contributions.
- You can develop a collaborative platform that supports communication and collaboration by giving retailers and other dealers instant tools to select, configure, price, bid and order your products and give them access to accurate & real time data on inventory; product configuration tools that allow them to show customers options easily; order entry system that supports quotes and special custom orders; access to real-time special order updates; shortened lead time and increased accuracy for accurate & on time deliveries; easy to access location for supporting marketing materials.
- With the right ERP, you can connect financial information across your business with insights into cash flowing through the payables and receivables, sales order and purchase order processes that will allow you to spot problem areas. You can graphically monitor your current cash inflow and outflow to forecast balances based on multiple scenarios; predict anticipated cash flow to identify shortfalls or surpluses and improve your day-to-day financial planning; track collections to keep tabs on accounts receivables; optimize your resources and improve processes; reduce billing lag times in billing with automated processes that ensure that invoices go out as soon as the item has shipped etc.
We at VersAccounts have created a secure cloud based comprehensive ERP solution that is e-commerce ready. It has been catered to take care of all the business needs and concerns for operating your business effectively. It addresses key issues of the distribution domain in the most effective manner possible. It is affordable and targeted towards SMB’s and is backed by a promise of dedicated support. It is being used by clients in diverse verticals and could help you redefine the way you operate and grow your business.
The VersAccounts Small Business Cloud ERP system supports a comprehensive set of distribution related capabilities in the core ERP modules. This includes the ability to manage inventory across multiple locations and systems including e-Commerce and POS systems, drop-shipping, paperless receiving, and easy cycle counting.
Additional capabilities are available for more sophisticated distribution support processes like scanner and mobile device based pick/pack/pay/ship processes as well as industry specific capabilities like DSCSA product tracing capabilities required in the pharmaceutical industry.
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Reference and recommended further reading: 10 Ways distribution companies can improve efficiency & inventory control: How forward looking ERP ends the guessing- Guide by Logan Consulting