The distributors maintain close relationships between manufacturers and retailers. They are also an important factor in fulfilling customer utility. To maintain this relationship, distributors must have an intelligent business system with in-depth functionalities.
ERP (Enterprise Resource Planning) is not alien to distributors. But what they need is a powerful cloud ERP software that can integrate multiple tools that can automate and simplify the quote-to-cash cycle.
This blog discusses why distributors should consider a strong ERP system for managing their business operations.
Why Do Distributors Need an ERP System?
Distributors are all-rounders, they have to manage sales, purchase, inventory, delivery, etc to meet the growing expectations of customers and retailers. This is applicable in both B2C (Business to Consumer) and B2B (Business to Business) businesses.
Distributors need to consider:
1. Order Management
2. Product Availability
4. Inbound and Outbound Transfers
ERP software showcases an extensive range of tools and features that simplify all these procedures, put cloud-based ERP solutions into the mix and you have the perfect solution. In this blog, we will discuss why this is the case.
ERP software for distributors is capable of handling various facets of the distribution business, like quality management, customer relationship management (CRM), Warehouse Management, Human resource management, etc.
Do All Distributors Need ERP?
We would shout a resounding “Yes”. This is because distributors of all sizes can benefit from ERP software. Most medium-sized distributors go for an ERP system because they need to cut back on their expenses as much as they can. It is also highly unlikely for them to afford sudden fluctuations in the stock demand without a sound ERP system.
Whereas in the case of large distributors, ERP’s are more than a necessity. ERPs need to be part of the process if the company aims to scale rapidly and efficiently. Huge distribution companies are often riddled with market pressure and rising competition and if they plan on remaining competent ERP’s are the way to go.
Benefits of ERP for Distribution
Here are some operational advantages of having an ERP system:
• Improved quote-to-cash (QTC) metrics.
• Low operating costs
• Effective administrative cost management
• Advanced inventory cost management
• Managing or reducing stale-dated inventory
• Reduce decision-making time
Let’s understand some of the core areas where ERP impacts distribution business:
1. Operational Visibility
Tracking orders is an integral part of the distribution business. Supply chain activities like Product movements, delivery, etc need to be tracked efficiently. Business owners should have a 360-degree view of the business 24/7 to understand what is happening within their business. ERPs provide real-time visibility into various areas of the business like monitoring the stock level, managing schedule orders, delivery schedules, and many more.
2. Inventory Management
Inventory management has a direct impact on the distribution business. It’s important to understand the stock levels in your warehouse to supply without delay. But, importantly the stocked inventory should not cross the limit. ERP software automates various inventory components like paperless transactions and inventory traceability.
Managing various warehouses and currencies can be easily done through ERP systems. Users can track and manage various activities like current inventory in transit, costs, and reorder levels. Also, the management can take care of expiration dates, stale inventory, and bin locations.
3. Demand Planning
Demand for products is increasing every day as consumer shopping gets easy. Distributors need to make arrangements to meet this growing demand. ERPs are capable of predicting and managing seasonal demand by going through historical trends.
Having a clear understanding of your inventory will help you improve customer satisfaction because customers will not be turned down due to insufficient inventory. Poor planning is no longer a risk distributor should be willing to take.
4. Happy Customers
Customer satisfaction is a major component in the distribution business. This area can only be improved if the product is delivered on time. An ERP system is capable of tracking products in real-time. It can track inventory that is in-stock, in-transit, and inventory that needs to be re-ordered.
By automating these various processes customer retention can be doubled as the business will be able to provide speedy service along with prompt delivery. Also, quick resolution to any rising concerns during the order fulfillment process will enhance the customer experience.
5. Improving Profitability
ERP systems are known for reducing costs and improving productivity. This is because they have a centralized approach towards storing data, and making it available to all users in real-time - ensuring zero blockages along communication lines.
Various internal processes or systems of a warehouse, location, or individual production lines can be automated. Since information can be accessed across the organization in real-time, cost-controls and supply chain optimizations are easy. ERPs can foresee the demand fluctuations which is quite difficult to manage manually.
NetSuite ERP for Distributors
Oracle NetSuite is the leading ERP solution for distributors. Within a single platform, you will be able to manage all your business processes and gain in-depth knowledge about your business in real-time through highly customizable reports and dashboards.
An ERP solution like NetSuite has minimal implementation time and low TCO (Total cost of ownership). NetSuite’s built-in workflows automate the core business functions such as order management, warehouse management, CRM, supply chain as well as logistics activities, inventory management, and many more.
Let’s understand some of the key modules of NetSuite ERP software for distributors:
1. Order Management
NetSuite can effectively manage all your omnichannel needs and improve your order-to-cash process. NetSuite allows users to receive orders through various mediums like web, POS (Point of sale), kiosks, etc. All these different channels may be measured individually to understand their performance.
NetSuite can also automate the functions like quotes to orders, orders fulfillment, invoicing to payment, etc.
• Reduce billing errors, enhance quote accuracy, and boost revenue recognition.
• Add customer lifetime value.
2. Warehouse Management
Having integrated tracking control helps users to minimize overhead costs and move their inventory at a faster pace.
• Track your inventory throughout its journey.
• Understanding inventory to sales ratio.
• Reduce stockouts and stale inventory.
• Make the best use of distribution centers and branches by effective co-ordination.
• Analyze data to remove bottlenecks and improve efficiency.
• Track lot numbers and serial controlled products.
NetSuite helps in the timely delivery of the orders and helps in reducing your cycle time and shipping costs.
• Improves efficiency with zone and wave picking.
• Dealing with cancellations/Returns, packing notes, changes, and labeling.
• Bill freight inclusive with the product or individually.
The purchasing process can be streamlined with NetSuite. It can help forge meaningful supplier relationships and provide insights into performance.
• Improve communication with your supplier through the supplier portal.
• Work on a centralized purchasing system.
• Build real-time approval workflows.
• Generate supply orders backed by sales data.
• Reduce lead times.
NetSuite takes care of all your support needs like case management, return tracking, self-service client support, etc to run a customer-centric business.
While choosing your ERP system, remember to find out a NetSuite implementation partner who works closely with your unique business requirement. Feel free to contact Jobin and Jismi IT Services LLP for assisting you in choosing the right ERP system.
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