How Your Consumer Goods Business Can Leverage Data to Improve Efficiency and Profitability
July 02, 2020
You can’t fix what you don’t know is broken.
It’s as simple as that. As consumer goods importers and distributors, fixing what’s broken, correcting what’s inefficient or confirming what’s productive could be the difference between staying in the black and going into the red.
You can get a more holistic understanding of your efficiencies and inefficiencies by directly measuring the various processes, operations and components of your warehouse, better preparing you to make the necessary adjustments and improvements for success.
An enterprise resource planning (ERP) solution that’s built specifically for consumer goods importers and distributors can provide you with the necessary tools to measure for improvements that you need to make. Because the software is designed for your particular kind of business—consumer goods importing and distribution—it is sure to streamline operations, illuminate pain points and improve efficiencies in meaningful ways throughout the enterprise.
We’ve listed out some critical areas in your warehouse in which studying your analytics could lead to improvements in your operations:
- Chargebacks – It’s so valuable for you and the success of your business to evaluate and analyze why you’re receiving chargebacks. So often, accounting gets that information, accepts the deduction, and then moves on to the next task. Operations employees need to evaluate those charges; otherwise, they’ll continue and compound. You need to take a more in-depth look at those deductions and why they’re being taken. This is a simple way to make a quick improvement; implement a process that involves monitoring chargebacks. An ERP can help reduce the number of chargebacks incurred and recover erroneous charges through robust tracking and record maintenance.
- Profitability Scorecard – This is a tool that allows you to determine how profitable your business is by dissecting the profitability of each customer, product and supplier. The information is real-time and includes both above-the-line and below-the-line costs, including freight, allowances, royalties, commissions, chargebacks and more. Then you can amend and improve those relationships based on the analytics and insights the tool provides. The integrated retailer compliance functionality allows users to track and manage chargebacks, automatic customer accruals, and EDI fees, so he/she can reclaim profits and see the real, bottom-line profitability of each customer, product and supplier.
- OTIF – On-time, in-full (OTIF) is a challenge for consumer goods importers and distributors to meet efficiently and consistently— but it is something they have to get good at to remain profitable. OTIF is a metric used by retailers to evaluate the performance of their suppliers by measuring the accuracy and timeliness of their shipments. This key performance indicator is a quick and easy way for retailers to gauge the ongoing performance of each supplier at a glance. As a supplier, you want to remain compliant, eliminate any fines, and mitigate the risk of lost business opportunity, which is why it’s so crucial for you to ensure compliance of and track your shipments’ timelines. Combining the power of a proper demand forecasting model with integrated EDI and warehouse management enables you to reach that balance required in just-in-time fulfillment. You’re able to meet the strictest OTIF standards with a consumer goods ERP that allows for real-time decisions and visibility into every step of the shipping process.
- Forecasting and Purchasing – Automated distribution resource planning (DRP) and forecasting tools integrate historical sales data and long lead times to help you optimize purchasing decisions. By evaluating and analyzing historical data stored in the ERP, you’re better able to acknowledge and progress with products and partners that help to make you profitable. A flexible, rule-based environment provides automatic alerts on inventory status and reorder levels, so you can maximize order fill rates and improve customer satisfaction.
- Import Management – An import management tool enables you to track shipments and other data on route management for deliveries. You know where things are, when they’re going to be available and if the shipment will be on time. There’s real value in this kind of visibility; you have insight beyond just checking the boxes and filling out forms, you can see the effect of the work you’re doing.
Acting on analytics is not about a complete overhaul to your operations; it’s about small, purposeful and incremental improvements. In being intentional and thoughtful with the changes you make around your warehouse, and in making those changes based on analytics and insights provided by your ERP, efficiencies and improvements are bound to occur. And in becoming more efficient, you also have the potential to become more profitable.
If you’d like to talk more about how Aptean Apprise ERP helps you leverage analytics to improve your enterprise, please reach out. We’d love to talk.