Ultra’s team of independent ERP consultants is regularly called upon to discuss the needs of project teams looking to drive business process improvement in their organization.
As part of our dialogue, we hear many questions distribution companies have about ERP.
These questions are asked by teams in a range of sectors – from food and beverage processors who not only manufacture products but also distribute through multiple channels, to wholesale distributors facing ever-increasing competition.
A recent ERP blog offered some insight related to this topic entitled “Thinking Enterprise Technology for Distribution Companies? 3 Tips to Keep in Mind.”
That post outlined the unprecedented disruption faced by distribution companies in the wake of volatile consumer demand, ever-changing distribution channel technologies, and advancements in enterprise solutions.
Enterprise Technology for Distribution Companies
Today, we take a more detailed look at enterprise technology for distribution companies, including the typical questions distribution companies have about ERP.
Some of the most critical functional areas technology solutions must address involve maintaining optimal inventory levels, facilitating quick movement of goods, providing strong front-office functionality for customer service personnel, and generating access to real-time, flexible reporting.
We make the case to our distribution clients that it is important to validate if the system offers a complete warehouse management system, strong financial management, and kitting and assembly capabilities.
Also key to the distribution sector are robust supply chain management capabilities that can coordinate advanced planning, merchandise importing, and distribution requirements planning (DRP) for centralized purchasing environments and multi-warehouse distribution channels.
Looking at Questions Distribution Companies Have about ERP
Summarized below are just a few typical questions a distribution company is concerned about related to enterprise software functionality.
What are the key issues impacting my ability to perform?
Shrinking timelines for order fulfillment: Today’s distributors are feeling the impact from customer-focused, high-volume retailers like Amazon and big-box organizations.
This shifting competitive landscape places pressure on wholesalers and distributors to fulfill orders more quickly and more efficiently. This key area challenges technology and processes to be more flexible and responsive to their requirements.
Pricing flexibility: As margins are being squeezed, the challenge is to set pricing that not only protects profits, but also drives competitive advantages to the customer.
As an example, dynamic volume-based deals with rebate and promotional programs are driving distributors to seek better, more adaptive technology.
Mobility: When looking at Customer Relationship Management (CRM), note that field sales personnel must stay close to customers – they must be able to capture and pursue opportunities more quickly, as well as have good analytical data on customer performance at their fingertips.
When it comes to selection and evaluation of ERP, what is the most important functionality for wholesale distribution companies?
A significant functionality now required by today’s distributors is better visibility of inventory availability across the supply chain.
A rapidly shifting competitive landscape places pressure on wholesalers and distributors to fulfill orders more quickly and more efficiently.
Today’s customers expect, and demand, immediate feedback on order status – best provided through Customer Self-Service portals. ERP must extend beyond the four walls of the enterprise to provide visibility of in-bound and out-bound inventory through the entire supply chain.
Also critical is real-time analytics and workflow. Modern technology is needed to predict potential supply chain issues before they happen based on good historical and planning data.
How important is integration between ERP and CRM for distribution companies?
CRM and ERP are not just applications that process transactions as they once did in past years. Today’s business environment is driven by interactions that use information as a trigger for activity.
CRM is the foundation for good customer service. These systems must share that information for more responsive forecasting and order fulfillment. CRM also provides a means of providing added value services that serve to differentiate in the marketplace.
CRM can monitor customer returns, complaints and service requests and generally support good communication with a prospect or customer beyond the level of basic order capture. CRM can also be the foundation for developing customer focused value-add services that increase customer retention and offer marketplace differentiation.
Thinking about Questions Distribution Companies Have about ERP? Dig Deeper
It’s clear that it’s a new chapter for the distribution sector, given the changes in consumer demand, delivery platforms and more.
Looking to dig deeper?
Download the timely white paper “Your Best Warehouse Management System: Getting Maximum Value From Your Warehouse and Your Functional Areas.”
Forward-looking distributors are now evaluating how enterprise systems can be used to drive true business process transformation.
Contact Ultra to consider your strategies in the face of this new business environment.