ERP Systems for Distributors
Distributors act as an intermediary between the manufacturer and the customer which means the customer can usually buy the manufactures product elsewhere. Because of this successful distributors know they must focus on issues such as price, availability, and value added services to attract and retain customers — and to beat the competition.
In mid-sized distribution companies the primary operational areas of the business are sales & marketing, fulfilment, accounting and administration. Business success is highly dependent on how efficiently and effectively these areas function independently and together.
Distribution companies typically specialize in the range of products they sell, the types of customers they support, or geographic coverage. This specialization provides the basis for their particular value-added capabilities and competitive advantage. Most distributors serve customers across more than one industry, segment or sector which serves as a safe-guarding — a downturn affecting one industry can be offset by growth in another. Overall health of the industries served can have a huge impact on distributor success.
Anticipating and Responding to Demand
Unlike manufacturers, distributors are in direct contact with customers and end users which provide them with valuable insights into market changes before they happen and allows them to make wise choices about which manufacturers products to carry based on market demand. The ability to match the products carried with market needs means having the ability to spot changes in the marketplace that can cause shifts in demand and taking the right actions to keep customers happy and the business healthy. Gain a full and clear picture of customer demand: effective procurement requires a single, complete, and up-to-date picture of demand that is available to everyone and provides a key tool for maintaining high customer service levels while minimizing on-hand inventory. Distribution businesses also need the agility to scale operations to match demand. Strategic planning and efficient operations depend on insight into demand that is accurate, complete, granular, and contextual.
Accurate Insights Into Demand – “stock out” situations can lead to lost sales and possibly lost customers. Holding too much inventory increases both costs and the risk that inventory will become obsolete. Insight into demand is critical—many distribution companies with inflexible legacy systems or multiple systems spend too much time capturing, collating, and validating demand information manually or using spreadsheet tools. These methods waste staff time and cause delays and errors.
Advanced demand planning gives businesses an end-to-end view for calculating customer demand, forecasting for single or multiple warehouses; gain perspective using historical invoices and inventory turn data, promotions and seasonality. Advanced demand planning capabilities provide an accurate barometer of anticipated demand while reducing risk of overstocks and out-of-stocks.
Granular Information – with highly configurable products, distributors need information about the specific components, consumables. Without this detailed information, an order that has the main items in stock may be delayed until all the components of the order have been received.
Contextual Demand – distributors may operate in markets or industries that are seasonal; launch their own sales promotions, or participate in sales promotions driven by their suppliers, all of which can influence demand. Access to historical data can provide valuable business insights for forecasting demand.
Automated Real-time Order Stream is a transaction-based operating model, so real-time information is available to everyone with authorized access. Sales and service staff can work with up-to-date information to provide customers with stock availability, shipping statistics, they can also cross-sell and up-sell complementary items and gain access to credit information, instantly and in real time.
End-to-end Visibility – fast, role-based access to sales, inventory, customer order status, shipping information, purchasing, and financial information across multiple locations, enabling all department personnel to work in concert with accurate, updated data.