Most distribution companies have already adopted ERP systems to support their entire business operations – Here are the main reasons why yours should probably do the same.
What is ERP software?
Enterprise Resource Planning software, or ERP software, is a powerful and versatile type of business software with multiple functional benefits that help companies to improve the efficiency and productivity of their operations – Which is the key to increasing profit and gaining competitive advantage in today’s rapidly evolving market.
ERP software – such as Acumatica and Microsoft Dynamics – works by collecting the data produced throughout an organization and storing that data in one single, centralized database. By centralizing company data, ERP software allows the data produced by company departments to be analyzed collectively, rather than in isolation.
Ultimately, ERP software allows companies to gain greater insight from their data and make more rapid, intelligent strategic business decisions. With the assistance of ERP software consultants and implementation specialists, many types of businesses can run more efficiently and successfully.
What Does ERP Software Do for Distribution Companies?A major part of a successful distribution business rests on great capital management. The cycle of sourcing products, storing them, selling them, and transporting them must run efficiently at all times to continuously turn inventory into cash. As any distributor knows, the longer stock sits, the lower the return. Distribution companies in particular can benefit from the support of ERP software consultants who will enable new ways to cut costs and shorten that all-important cash cycle. In fact, distribution companies that implement an ERP software solution start realizing the benefits immediately since it allows them to analyze data in real time, create detailed reports, perform accurate forecasting, as well as automate various tasks and processes that support all operations.
5 key advantages of implementing ERP software for distributorsDistributors face the challenge of various operational or client relationship issues that stretch out and slow down the inventory-to-cash churning cycle, which lowers the return on capital even more. ERP software can solve many common problems and empowering distribution companies with the following advantages:
- Accurate inventory tracking With ERP software, distribution companies are able to run a more efficient warehouse – which is a very important factor to higher profitability. The majority of ERP systems integrate a Warehouse Management System (WMS) that provides automated workflows to streamline all processes of inventory management, along with operational tools such as barcode scanners, mobile devices, etc. By adopting ERP software, your distribution business will gain the strategic capability to easily know at all times the exact inventory of their warehouses, and to predict when shortages or overages of inventory might occur.
- Reliable demand forecasting By performing deep analysis of company data, ERP software can help management accurately forecast increases and decreases in customer demand so that inventory levels can be adjusted accordingly.
- Optimized sales, supply chain and fulfillment processes ERP software allows a distributor to ensure a steady supply of goods by providing seamless automated workflows which optimize all processes involved in sales, purchase order and supply chain management. This gives your distribution the capability to significantly increase operational efficiency and reduce order times by eliminating fulfillment and shipping delays. An ERP implementation consultant who is experienced with distribution companies can also set up your ERP system with capabilities to handle credit, returns, drop shipments and so forth across multiple warehouses.
- Improving relationships with vendors and customers The most competitive distribution companies share real-time information with vendors and customers so that quick decisions can be made when necessary. ERP software gives distribution companies this ability, helping to eliminate costly delays and negative impacts of errors and misunderstandings in business operations by providing real-time visibility into inventory stock, costs, transit and reorder quantities. Distributors can benefit from lower operating costs as well as clearer and more productive communications with vendors and customers.
- Precise financial management By adopting a modern ERP system, distributors can know the true value and cost of resources by gaining the ability to assess profitability by warehouse, product line, and business unit. The ERP software enhances your company insights with reporting and data visualization tools that will help detect cost overages and other issues that may not appear in standard financial reports.
How to tell if your distribution company needs ERP software?Sooner or later, a distribution company will rely on the advantages ERP systems provide to run successfully and grow in the long term – It is not a matter of determining “if”, but rather “when” yours will need the support of ERP software. Based on the most common pain points that business owners have shared with us, there seems to be some clear telltale signs indicating a company has outgrown its existing software and that it is time to hire ERP consultants to implement a new or updated ERP system.
- The company’s existing processes are increasingly confusing and inefficient If business operators and associates are struggling to keep track of various information, constantly switching between different apps and software that do not communicate with each other only to complete one of many daily processes… All signs point towards your IT systems being too complex and/or outdated. An ERP consultant will implement a central software system capable of automating and streamlining tasks and providing easy real-time access to all necessary business data.
- The company’s software integration expenses are way too high In maintenance with the logic above, sticking with complex and outdated software will usually translate into poorly invested spending on excessive, unnecessary software integration in an attempt to solve gaps and streamlining issues. Add up the license and subscription fees for multiple services along with products and hours of training for staff to learn new tools and you have a pretty heavy tab – Along with a complicated, confusing system that isn’t meeting needs and requirements.Your distribution company will save money by hiring an ERP implementation consultant instead, as your dollars will go a much longer way in adopting an ERP system that can provide a long-term solution for your business to run efficiently and more profitably.
- The company’s sales numbers and client satisfaction rates are decreasing Following in logical suit with all the points made above, you may notice that sales are slowing down, and more struggle to meet customer demands. A very suboptimal software system is at the root of an organization becoming increasingly reactive instead of being more proactive, productive and profitable through the support of streamlined, automated processes and readily accessible data across all branches of your operation. ERP implementation consultants can consolidate data into a single, user-friendly dashboard to enable greater efficiency, accuracy, and insight into your company’s internal and external processes: Accounting, CRM, order management, and shipping, etc. Furthermore, ERP software can provide a more transparent and smooth process which generally increases customer satisfaction.
3 key qualities a distribution company should seek in an ERP software solutionThere are different types of ERP softwares such as public vs private cloud options. Here are a few features you should look for in your ERP software solution.
- Remote accessibility: In the modern business world, companies typically have a mixture of employees working at an office and employees working remotely. So, it is important that ERP software solutions for distribution companies be accessible over the Internet and from any device, including laptops, smartphones, and tablets.
- Powerful integrations: Distribution companies, like almost all other companies, are already using software that employees have become used to. The ERP software solution chosen by a distribution company should integrate with the existing software.
- Reliability: If the ERP software implemented by a distribution company is constantly experiencing downtime, the ERP solution can become more of a problem than a helpful tool. Distribution companies looking to implement an ERP solution should consider using Cloud-based ERP software that is maintained by trained and experienced ERP software engineers.
How S-Metric can help tailor an ERP software solution for your distribution companyIf you are looking for an ERP software solution that is customized specifically for the needs and requirements of your distribution company, S-Metric can help implement systems such as Acumatica ERP, Microsoft Dynamics Business Central, and more. The experienced ERP implementation consultants at S-Metric specialize in ERP system solutions for distribution companies of all sizes. We have successfully solved common problems distributors face by innovating our services and following industry best practices so that companies are able to realize all of the benefits that ERP software has to offer. S-Metric works with your company for each step along the way of the ERP software implementation process, including:
- Analysis, to precisely understand the needs of your distribution company Integration, to make sure your ERP software solution works with the software that your distribution company is already using.
- Implementation, to ensure a successful deployment of the ERP software solution developed just for your distribution company.
- Customization, to meet the exact needs of your distribution company.