Managing inventory in the most efficient and profitable way is a top concern for wholesalers and distribution companies. With supply chains becoming more diversified and dynamic, your ability to effectively manage your resources is critical. To do so requires nimble operations, real-time data sharing and strong supply chain processes.

 

Suppliers are being called upon to understand and anticipate their customers' needs. How quickly can you respond to order changes or requests for information? How accurate is your data and reporting? This can make the difference between getting business or losing it.

 

Wholesalers and distribution companies that excel at their inventory management are constantly working to get the maximum amount of profit and vendor satisfaction from the least amount of investment in stock and overhead. The balancing act that is successful inventory management always comes down to data. How can you best record, analyze and act on all the information your company is generating at any given moment? 

 

This is where Enterprise Resource Planning (ERP) comes in. ERP solutions, combined with other software systems, enable all your departments to work together to record, analyze and act on inventory data in real-time as efficiently and effectively as possible. 

 

ERP Solves Four Problems in Inventory Management

 

Properly deployed ERP systems help to solve four fundamental problems wholesale and distribution companies face today: 

 

1. How to Break Free from Spreadsheets

Those Microsoft Excel spreadsheets are a ball and chain to your operations. How many known and unknown bottlenecks are caused by these seemingly innocuous files! Multiple employees performing manual data entry means little data integrity. Customer orders are missed or are based off erroneous inventory levels. ASNs are sent late, are incomplete or inaccurate. Your data is not organized for easy access, collaboration and multiple inputs across different departments. This information is not moving in real time, which is the speed of business today. 

 

With ERP solutions, data is entered into the system once and ledgers are automatically created from inventory transactions. Employees no longer need to perform time consuming data entry, which also helps to mitigate risk due to error.  An ERP system can grant rights to various locations so relevant employees can access information and enter transactions in real-time. These details can then be shared with any third-party, like suppliers or logistics teams. In the long run, an ERP system pays for itself.

 

ERP systems can also assign multiple valuation methods, such as standard cost, moving average, and FIFO. Those who need to can then access this data on demand. 

 

2. How to Enhance the Customer Experience 

Over the past few years, customer experience has become more important than price and even product or service features as a critical brand differentiator in the B2B space. As more and more companies add B2C and e-commerce to their offerings the task to keep all of this moving becomes increasingly complex.

 

Customer experience is more comprehensive and encompassing than customer service. It means being in sync with the needs and preferences of each client. Through modern ERP software, organizations are able to improve customer and vendor experience with real-time access to important inventory data. This in turn can improve customer service requests by speeding up response times as well as improving the quality of the response.  

 

With real-time inventory levels and customer-specific pricing available on demand, your management and customer service teams are empowered to clearly communicate to customers. Moreover, your warehouse is equipped to handle shorter order fulfillment cycles to meet customer demand, while simultaneously limiting stock-outs. 

 

3. How to Improve Vendor Compliance

Over the past few years, major retailers have been pushing for extensive compliance and supplier chargeback programs. Many now maintain a system of vendor scorecards that rate suppliers on a number of variables, such as EDI compliance. Financial deductions for non-compliance can be up to 20% of an invoice. Moreover, retailers are employing sophisticated vendor optimization programs powered by AI and automated technologies to generate these chargeback deductions.  

 

ERP software enables the flow of data between all functional areas of your wholesale business. It works to both automate and optimize numerous operational and administrative processes including order entry and processing, purchasing, inventory management, and customer relationship management.

 

Employing a good ERP solution will help your distribution center avoid costly chargebacks by improving performance and retail reporting requirements

 

4. How to Scale and Grow 

Increasing competition coupled with performance expectations and vendor compliance requirements are taking a big bite out of already tight profit margins. ERP solutions create an environment that allows your management teams to maximize resources and thus reduce costs, often in real-time. 

 

Notably, ERP systems give decision-makers a birds-eye view of your organization that instantly reveals the bottlenecks and sources of error and redundancy. You can then use this important information for growth by establishing new protocols that power efficiency.

 

In short, ERP systems draw on a variety of data sources to help wholesalers and distribution companies maximize their resources, foster operational and administrative efficiencies and ultimately make more informed strategic decisions. In the process, this software allows your organization to overcome several fundamental impediments to success-- both now and in the future. 

 

We at CRL have overseen dozens of ERP systems evaluation and implementations.  While the task might feel daunting at the beginning, the end results are satisfying and profitable.  Companies find they can do more with less.  Contact us today and see how we can help your company. 

 

Visit us at www.crladvisory.com or call 212-947-0300

.