Distribution ERP Software and Why You Need it
Distribution ERP Software and Why You Need it
If you’re in the distribution industry, you’ve no doubt come across references to ERP software, but you might not understand exactly how and why it can improve your business. Here’s what you need to know about this innovative software.
Enterprise Resource Planning (ERP) systems allow businesses to collect, store and manage data throughout the enterprise. This data can be integrated from all business departments - including human resources, manufacturing, sales, and more – and then shared, in real-time, to streamline all business operations.
What is Distribution ERP?
ERP software can be customised for each industry, and this includes distribution ERP. Distribution ERP software is often combined with Business Intelligence (BI) and Customer Relationship Management (CRM) capabilities, giving distributors more insight into customer habits. These come alongside tools such as fleet management, marketing, inventory management, and shipping for an end-to-end distribution solution.
What Are the Features of Distribution ERP?
Each ERP system will come with a number of standard features and some additional features that might add a higher price tag initially but could prove hugely effective in the long-run. You’ll need to discuss what features are included and whether they’ll work for your business with your ERP software provider. Here’s an overview of what you can expect:
- Customer’s Portal
One of the many great elements of distribution ERP software is that customers have access to it as well, improving customer service and relations. Using the internet-based portal, customers will be able to input their order placement, guided by previous suggestions, going straight through to sales. This portal will decrease employee tasks and improve the cost of selling.
- Customer Relationship Management (CRM)
Part of distribution ERP systems is CRM software which gives your company access to customer-related data. This will include things such as credit limit, location, order history, and status. This data can then be translated into beneficial business information that drives marketing campaigns and customer loyalty programmes.
- Supplier’s Portal
Distribution ERP software also allows distributors to choose suppliers that have portals connected to their ordering systems. The distributor can then send off purchase requests based on customer demands and inventory levels for much smoother transactions.
Distribution businesses, like most companies involved in product sales, require some form of a point-of-sale system. Distribution ERP has barcode scanning but takes it even further. Once a customer has bought an item, and the inventory drops below a certain number, the ERP system will send a trigger to the POS device to replenish the inventory by sending an order to the distributor. This increases sales, as well.
- Inventory Organisation
When ERP systems work in conjunction with Warehouse Management Systems (WMS), distributors can better organise inventory so that it’s set up for the following transaction. This includes moving something from the back of storage to the front so that it’s ready for shipment, saving on lost time.
- Inventory Movement
Through your distribution ERP software, you’re able to communicate directly with workers in the warehouse, talking them through where inventory needs to be placed to ensure more optimum storage. Keeping your inventory moving is vital to ensure you’re getting your return on investment.
- Procurement Management
As a distribution company, you’ll rely on ways to procure goods, and this can be centralised through your ERP software. This procurement management feature will include purchase-order and bid management, handling drop shipping for products, and assisting with requests.
- Warehouse Management
This is an imperative feature for distributors and will cover a range of functions. Warehouse management software controls all processing and inventory data for more efficient operational processes. By automating the many warehouse processes, you’re also optimising employee time and reducing the chance of human error.
The ERP software will allow for communication between internal and external operators, eliminating constant back-and-forth and miscommunication that leads to massive losses. This allows for much more visibility across the entire supply chain, with users able to track all functions.
- Automated Identification
Barcoding is a hugely important aspect of distribution processes today, as the barcode acts as an identification label, storing all the product data in one convenient location. The barcode could include a product description, serial number, lot number, and other necessary information. Distribution ERP software will be able to scan and store the barcoded information for a hassle-free distribution process. If you’re working with the latest radio frequency identification (RFID) technology, you won’t even need to scan the device as the tags send off signals constantly.
- Mobile Access
With the spike of remote business operations, it’s no surprise that people working in distribution require mobile technology as well. Fortunately, ERP software can accommodate this need with mobile access distribution. Although the screen is much smaller, you can quickly check all available inventory from wherever you are, place a purchase order and make a sale without even being near the warehouse.
As with any business, it’s important that all finances, transactions, and other related cash flow information is accurately stored and easily accessible. With Distribution ERP software, you will get features such as accounts payable, accounts receivable and general ledgers that allow for the electronic payment and collection of cash and fund transfers. Your ERP software will also be able to prepare financial statements which both customers and investors can use.
With the increase in digitisation, distribution ERP software also allows you to benefit from eCommerce advantages, including selling directly to customers online. If you prefer, you can collaborate with another web-based sales’ company to deal with the storefront and customer transactions.
What Are the Benefits of Distribution ERP?
We’ve run through the many impressive distribution ERP features, but it’s not always evident exactly how advantageous these are to your business. Here’s why distribution ERP software is such a valuable investment.
1. Improve customer satisfaction
By accessing up-to-date customer data, you’re able to customise loyalty programmes and perform targeted marketing campaigns that benefit your customers. The access to a customer’s portal, improved efficiency, enhanced communication, and constant inventory replenishment will satisfy your customers.
2. Improved visibility
With your ERP distribution software, you’re able to track the product easily flows at each step of the distribution process from manufacture through to the customer. You can immediately identify any errors or challenges in supply chain management and are better placed for future business planning. Some of the challenges distribution ERP software can identify include inconsistencies in transactions, deliveries, stocks, sales, and any illicit operations.
3. Superior efficiency
Once you implement a distribution ERP system, you’ll begin to see the benefits in terms of enhanced efficiency. The reason for this is that ERP makes it that much easier to arrange orders and deliveries using the software, minimising errors and improving customer relations. It doesn’t matter if the workload increases; through ERP software, you can easily manage and maintain employee rosters, timesheets and leave days without it becoming a logistical nightmare.
4. No more order lags
Because everything is fully automated through the ERP solution, there is no delay in filing an order or shipping. In addition to this, your ERP software will let you set up the rules and regulations for credit handling, dropped shipments, and returns across multiple warehouses if needed.
5. Improved costing
With your ERP distribution software, automation removes the need to hire more staff for transaction monitoring or inventory control. The drastic reduction in errors, lower-order lags, improved efficiency, and better overall operations will impact your bottom line. The software also gives you access to your financial data so that you’re able to determine the warehouse profitability easily.
6. More accurate reporting
The improvement to supply chain visibility also allows for the compilation of data into more accurate reports, internally and externally. These can be used to improve business decision-making, and you’re able to respond quickly to any challenges to operations.
The automation of your distribution processes makes for better inventory management. You’re cutting down the time taken for manual inventory processing while also allowing users to track and manage data across multiple warehouses. Warehouses can track expiration dates on stock, negative inventory, and bin locations.
8. Enhanced time management
As mentioned, cutting out the manual inventory management, reducing errors, and improving communication across warehouses actually makes your distribution operation a well-oiled machine. The time saved on these daily tasks can then be focused on other revenue-enhancing areas, such as enhancing customer relations, improving service, or creating an effective marketing campaign.
9. Implement demand planning
As customers purchase items, your distribution ERP software will send an alert for the replenishment of inventory so that you’re never running out of stock. This allows businesses to also perform demand planning through predictive analytics based on past trends. You can discover what products are moving quickly and which ones are lagging.
What to Consider When Choosing ERP Distribution Software
There’s a lot to consider when choosing exactly which ERP distribution software would be best suited to your business, and the process can get overwhelming. Working with an ERP supplier, you will want to consider the following factors.
- Distribution ERP functionality
You want minimal disruption and enhanced streamlining when you bring the ERP system into your distribution processes. To achieve this, it’s important that the ERP solution actually fits in with your business processes. This means having to watch ERP demonstrations and consult with suppliers.
- Determine your current challenges
The best way to decide what ERP features and functions you need is to determine what difficulties you’re currently experiencing. You need to decide:
? What is outdated about your existing system?
? What areas would you prefer to automate?
? Where do you need increased visibility?
? What systems need to integrate with ERP?
? What do you like about your current system?
- Check about industry experience
ERP software is improving business operations across every sector, but if you’re looking for distribution ERP software, then you need to be working with suppliers who can meet this specific demand. You want industry-specific software which is most impactful for distribution.
- Check the vendor reliability
You have to be working with a vendor who has experience with ERP specific to your industry but who also provides you with a tried-and-tested product. You’ll need to ask about previous clients, the product’s history and future plans, as well as the number of active customers.
- Scalability of the model
ERP software has the benefit of scalability, and there are likely features you will require at a later stage that you don’t want to be paying for now. Your best bet is to share your business strategy and future needs with the supplier so that you can find software that will support future plans such as growth, mergers, new technology or new markets.
- Product pricing
Nothing in business is simply a matter of looking at a price tag. You need to consider the cost-to-benefit ratio, what your return on investment will be. This can be determined in many ways, including daily cost savings, increased automation, enhanced capabilities, among other things. There’s also the total cost of ownership, pricing model, installation costs, and any other related costs to check first.
- When to implement
The implementation of ERP software into any distribution organisation needs to be carefully considered. While there’s no perfect time as there could be some initial teething issues and adjustments to the system, certain times are certainly better than others. You will also need to consider the support provided by your ERP software partner so that you’re never left in the lurch.
At the end of it all, if you’re working with a reputable ERP vendor, like Omni Accounts, you’re going to benefit from all the distribution-enhancing features of ERP without dealing directly with hassles related to implementation, operations, training, and upgrades.
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