Distribution challenges loom as 2020 approaches. Issues include increased costs and unpredictable spending habits by the ever-more influential Millennial generation. Distribution businesses must keep up to meet their goals of continued growth. ERP software specialized for distribution offers a solution. Here is a selection of pressing trends in distribution that can be addressed by ERP.

An Increase in On-Demand Ecommerce

Consumers now expect to have the option to buy and receive goods from anywhere after placing orders from phones, cars and personal digital assistants like Alexa or Siri. Many of them demand same-day delivery. It’s not uncommon for retailers to offer two-day shipping, while Amazon offers next-day delivery to about 75% of the U.S. population. To compete, businesses must invest in logistics infrastructure improvements.

Acumatica cloud ERP facilitates this kind of on-demand experience. It incorporates a Customer Management Suite that enables businesses to respond quickly to requests, from first contact with a customer through the entire sales process. It also helps manage fulfillment, billing and after-sales service requests. Visibility into real-time sales data helps with forecasting while customers can access information via the Acumatica Customer Portal, thereby connecting CRM functionality with distribution operations.

A Shortage of Labor Resources

As logistics operations grow in size and complexity, the need for labor is increasing. But with low unemployment, it is becoming more difficult to find available workers who can fulfill the demand for same-day delivery, especially during peak shipping times like Christmas. Automation technologies are decreasing in cost at the same time. Robotics and software solutions are becoming essential in the logistics industry, just to stay competitive.

Acumatica streamlines logistics operations with accurate cost tracking, manual or automatic allocation of freight costs and management of multiple warehouses. It can factor in location-specific inventory, quantities and costs as well as help redistribute inventory from a central facility to other warehouses. Purchase orders can be automatically generated to replenish stock and sent to vendors with optimal prices and delivery times.

Tariffs on Foreign Goods Are Increasing Costs

Tariffs, particularly those on goods from China, are leading companies to relocate so they can sell products at affordable prices. Businesses are finding the need to rework their distribution models, modify their tracking systems and find new trading partners. At the same time, they must maintain their bottom lines, satisfy customer demand and keep up with their competitors.

With Acumatica, organizations can have full visibility into inventory, prices and cost-saving opportunities from a single data source. Reports can be accessed from anywhere, including on mobile devices, so data and analytics can be viewed in real-time via intuitive custom dashboards. Users can also see sales trends, product movement and market information.

Dashboards also provide useful information such as product and material replenishment, lot/serial numbers and shelf life and expiration dates along with details on the condition of stock, drop shipments and vendor selection and performance analyses. At the same time, the cloud ERP system reduces the risk of errors and avoids requiring data re-entry and reorganization. This improves control as companies rework their distribution processes.

Acumatica Distribution Edition

If you hope to grow your business or even stave off the ongoing threats that exist from competitors, you need an ERP solution designed for you.

Acumatica Distribution Edition delivers, giving your business control over their supply chain and logistics activities, including warehouse management, inventory management, and order management. Built in the cloud and customized for your needs, Acumatica helps companies improve customer satisfaction, reduce order times, and control costs across the entire supply and distribution chain.

Contact us to learn more.

Additional Distribution Resources

Benefits of ERP Software for Distribution Business Management

Making the Most of KPIs in Distribution

5 Reasons Distributors Need ERP Software

Acumatica recently published an informative white paper on Key Performance Indicators for Distribution. If you’re in the distribution business, it’s a highly-recommended read. The paper will help you understand KPIs as they apply to a distribution. Here are some highlights.

What is a KPI, anyway?

A Key Performance Indicator (KPI) is a measurement of some aspect of your distribution business’s performance that you consider critical to how the business is doing overall. It could be something as simple as rate of revenue growth. If you’re hitting the number you had in mind, you’re performing the way you want. Other times, KPIs can be more obscure, but no less meaningful. A KPI for distribution might be the rate of product returns or the number of complaint calls handled per hour. KPIs are based on data from the business, typically coming from the Enterprise Resource Planning (ERP) system and other enterprise software applications. KPIs compile ERP data into usable forms, e.g. graphical displays that visualize the data.

KPIs as a solution to data overload

KPIs are helpful in managing a wholesale/distribution business because they keep you focused on what’s important. They get you out of the trap of data overload. With modern ERP software, it’s easy to generate literally hundreds of reports at any given time. You can get caught in “analysis paralysis” or focus too much on metrics that don’t matter as much as you might imagine. Worst case, you’ll miss an early warning of an impending problem.

Types of KPIs

There are three main types of KPIs: Historical, real time and predictive. All three tend to feature the same kinds of information. They report financial results such as sales, orders, profit and loss and o forth. They track operational metrics like orders shipped, backorders, route miles driven and customer service calls answered. Depending on how you display your data, i.e. your data visualization dashboard, you might have all three types visible at the same time:

• Historical KPIs – what happened in the business, showing trends and highlights like peak sales growth over the last 5 years
• Real time – what’s happening right at the moment (or that day)
• Predictive – what might happen, if historical trends are any indicator, e.g. anticipating a shortage of certain products during an upcoming peak season

Predictive KPIs are where modern data analytics tools can really shine. Not all solutions have predictive capabilities, however. This is an advanced feature, one that may take some professional help in setting up.

KPIs for Distribution

Distribution businesses have developed their own distinctive KPIs. In addition to basic financial KPIs, a distribution business tends to focus on operational metrics that reflect critical business functions—often tied to profitability. They include:

• Inventory Turnover Ratio – comparing inventory turns for low-turnover and high-turnover items. This KPI is useful for purchasing managers, as it should inform the volume of future buying.
• On Time Shipping Ratio – comparing on-time shipping performance for custom orders at multiple warehouses over a period time.
• Profitability by Item – revealing which customers and products are the most profitable.

It can take some focus and internal research to determine the best KPIs for your distribution business. We can help. We have guided distribution companies through the process of setting up data analytics and KPI dashboards.

To download the Distribution KPI white paper, visit  https://www.ccstechnologygroup.com/resources/kpis-for-distribution/.

Additional Distribution ERP Resources

Finding the Productivity Advantage in Distribution Management

5 Reasons Distributors Need ERP Software

How ERP Software Can Promote a Sustainable Supply Chain

If you’re a distributor, what business are you really in? On a day-to-day level, your business sources product from suppliers, stores it until it’s sold, and then transports it to customers. In its essence, though, a distributor is in the money management business. You’re taking cash and turning it into inventory. Tick tock – the longer it sits there, the less of a return you’re earning on that cash. Any operational or customer relationship issues that further stretch out the payment for a sale is lowering your return on capital even more. If you borrow to finance a distribution business, you’ll understand this problem deeply.

Software has long assisted distributors in making their businesses run right. Today, though, modern enterprise resource planning (ERP) solutions give you new ways to cut costs and shorten that all-important cash cycle. Here are five reasons you need ERP software if you’re in the distribution business:

1. Be able to improve customer satisfaction and cut costs at the same time

A modern ERP suite allows you to be efficient in the management of distribution processes. You get real time visibility into available inventory and inventory costs, inventory in transit and reorder quantities. This visibility translates into low operating costs and clear, productive communications with customers. You can cut down on misunderstandings and delays that negatively affect customer satisfaction.

2. Reduce order times

Automated sales order processing, which is available in ERP solutions, eliminates delays in order fulfillment and shipping. The suite usually also enables you to set up rules to handle credit, returns, drop shipments and so forth across multiple warehouses.

3. Run an efficient warehouse

The more efficiently your warehouse(s) run, the more profitable your distribution business will be. A Warehouse Management System (WMS), which comes with many modern ERP suites, lets you streamline your distribution processes. The system covers workflows across receiving and inventory management as well as the operation of tools like barcode scanners and mobile devices.

4. Stay on top of your supply chain

ERP enables you to ensure a steady supply of goods to distribute. It accomplishes this by automating and optimizing purchasing processes, purchase order management and supply chain management.

5. Know your true costs

A modern ERP suite gives you the ability to determine profitability by warehouse as well as by product line or business unit. Reporting and data visualization tools help you spot cost overages and other drags on profitability that may elude standard financial reports.

Control Your Inventory and Increase Customer Satisfaction with Cloud ERP Built for Distribution

Those are just five big reasons distributors can benefit from modern ERP. You can also push up your profitability—through a better cash cycle as well as more efficient operations—by means of advanced inventory software, requisition management and advanced financial reporting tools.

Distribution is all about logistics. Without the right tools, distribution companies simply can’t compete. We have considerable experience in the distribution vertical, equipping clients with industry-specific tools, like Acumatica, that ensure a smooth process, top-notch security, and consistent reliability.

Acumatica Distribution Edition delivers, giving your business control over their supply chain and logistics activities, including warehouse management, inventory management, and order management. Built in the cloud and customized for your needs, Acumatica helps companies improve customer satisfaction, reduce order times, and control costs across the entire supply and distribution chain.

Click here to learn more or request a demo.

Check out these other articles for more ways to improve your distribution business:

How ERP Software Can Promote a Sustainable Supply Chain

Benefits of Inventory Management Software for Your Distribution Company

ERP for Distribution Companies

Managing inventory in the most efficient and profitable way, is a top concern for companies across the globe. It’s essential that businesses are able to fully understand customer needs so they can make better decisions that impact ways inventory is handled. With cutting-edge technological developments, it’s becoming much easier for distributors to better manage inventory.

Through modern ERP software, organizations are able to improve customer service with real-time access to important information around inventory, as well as key data. Implementation of a cloud-based ERP system, allows companies to manage the distribution process efficiently and without losing track of costs.

Challenges Distributors Face

Visibility provides distributors a way to realize and understand inventory, which can impact supply chains. In this area, the entirety of the business revolves around receiving, replenishing, stocking, compliance labeling, processing customer service requests, tracking, reporting, and shipping, etc. By understanding the complexity of the inventory ecosystem, a business is able to set in place protocols that drive efficiency, which helps to reduce costs.

1. What does the inventory look like? Knowing a business’ core (continuous, year-around) items and non-core items (seasonal merchandise), as well as the marketplace, enables companies to manage ordering. A company should know what’s in stock, what needs to be ordered, the quantity and shape of the order, as well as what gaps need to be filled.
2. Has the business moved beyond outdated processes? Manual ways of doing business can add to the complexities of the work environment and deter a company’s growth. The first step forward is identifying where improvements are needed.
3. Is the company keeping up with customer demand? When it comes to customer needs, it’s essential a business remains limber enough to respond to changes —- shifts can happen daily. A company is expected to keep abreast of customer needs by managing its inventory to meet demands, and those that do not risk losing out to the competition.

The ERP Advantage

An ERP system gives a real-time glimpse of the company’s inventory; distributors are no longer pressed to work with ambiguities in critical areas. Effective businesses will learn to keep a handle on costs as they manage both inventory and distribution processes.

Many businesses are challenged due to the sheer expanse of the business. Multiple warehouses often have location-specific inventory quantities, allocations, and costs. An ERP system that focuses on inventory management, helps companies to redistribute product from a central warehouse to other warehouses with ease, as well as granting rights to the various locations, so employees can access information and enter transactions in real-time.

The systems assign multiple valuation methods, so businesses can determine standard cost, moving average, FIFO (first-in, first out), and item-specific methods. Unique valuation methods can be attributed to each inventory item, while report and inquiry views help distributors make direct adjustments to cost and physical inventory counts.

Being able to know where each and every item is becomes exponentially easier with lot and serial numbers assigned on receipt, issue, or assembly. Costs can be managed with item-specific valuation methods associated to serial numbers — all of which makes tracking that much more effective.

Learn more in ERP for Distribution Companies.

Impacts on Distribution

Imagine the advantage of having access to warehouse information, including the ability to make updates in real-time. With a cloud-based ERP solution, distributors are able to modify and analyze inventory, as well as restrict access to inventory by item or warehouse. All business insights are accessible in the cloud-based system — employees are able to get secure access anytime, anywhere via smartphone or Internet-connected device.

Visibility gives the team the tools they need to make better decisions, faster. Drill-down reports and user- or function-specific dashboards reveal past actions and data that can help positively impact the future. With the entirety of the organization viewing real-time inventory levels and customer-specific pricing, the team is able to clearly communicate to customers. When customers are told the same insightful information from all parties, expectation is better managed; a company that honors contracts and successfully fulfills orders will have a better chance at gaining repeat customers.

A modern ERP that meets the needs of distributors can help to manage costs. Outdated spreadsheets become a thing of the past, as ledgers are automatically created from inventory transactions. It’s easy to see what goods have been sold, and also any inventory holding costs.

Another cost saving measure, is the benefit an ERP system brings to the actual workforce. There’s no longer a need for employees to perform time consuming data entry, which also helps to mitigate risk due to error. Default accounts can be set, reducing the amount of work the staff must do. The increased efficiency leaves time for distributors to focus on other areas of business that can drive growth and profit.

Implementing for the Future

The first step of the journey is realizing when a company is ready for a cloud-based ERP system. Acumatica Cloud ERP is an award-winning solution that offers Acumatica Distribution Edition. One of its many features is Advanced Inventory, which is designed to improve customer service and profitability.

Partnering for the future enables a business to improve capabilities and efficiencies, both of which are imperative to growth. As an Acumatica Partner, CSS Technology Group brings cloud expertise to take a company into the next decade and beyond. Read testimonials and contact us to learn more about implementing a cloud-based ERP solution.