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Top 5 Benefits of Specialized ERP Software for Distributors
Top 5 Benefits of Specialized ERP Software for Distributors
Oct 6, 2021Ken Weygand
Why Do I Need a Distribution ERP, Anyway?
Anyone who works within the distribution sector can benefit from a distribution ERP. As a consumer goods distributor, you manage many moving parts within your business. You oversee inventory management and forecasting, warehouse operations, supplier and customer management, supply chain disruptions, and any number of other tasks or issues that arise. If you want to grow—and who doesn’t—you cannot continue to use basic ERP software, or worse, Excel spreadsheets and accounting software, to manage your business.
If you’re reading this blog, maybe you’re not quite sold on the idea of a specialized ERP. Or maybe you have an ERP, but you’re struggling with a legacy system that is outdated and slows you down. Maybe you just want to know more about an ERP so you can build a business case to present to stakeholders. We’re glad you’re here, regardless of what brought you. Let’s talk about why you need a specialized ERP for distributors.
Let’s do the math.
(Improved warehouse efficiency) + (improved supply chain management) = Faster order times
Faster order times = improved customer satisfaction = Improved company profits
To manage all business complexities, you need the right tools. After all, you wouldn’t want to start a fire with two sticks. Two sticks might work, but they aren’t the most efficient—or cleanest—way to start a fire. Without the right tools, your consumer goods distribution company can’t compete. Equip your team with the right industry-specific tools and you’ll get improved processes and a smoother supply chain.
To unite data and synchronize your operations, you need a solution that all your departments can use and have all the same information at their fingertips. Industry-specific ERP software for distributors ensures your teams work from the same real-time information to make running a successful distribution business that much easier.
Why Can’t I Use Just Any ERP?
You certainly can and using an ERP will help you stay organized and eliminate clunky manual processes. But an industry-specific ERP, installed with the help of experts that know your industry inside and out, is ultimately the best solution.
Your business is unique. A one-size-fits-all ERP will not be a perfect fit, often requiring costly customizations or add-ons. Consumer goods distributors need a fully integrated, purpose-built system that can adapt to meet evolving industry needs and trends.
Specialized distribution ERP software has key functionalities that serve specific company and department functions and have the customizable options you need. No matter what vertical you’re in, industry-specific features deliver profitable advantages over your competition.
Changes in consumer buying habits and higher expectations have disrupted the distribution space forever. To thrive in this space, you need to create a transparent supply chain and guarantee efficient delivery. Utilizing the right technology will support digital transformation for your distribution business and help you meet these expectations.
ERP software for distributors has robust, purpose-built functionality. You can effortlessly manage your warehouses and logistics, forecast product demand, track inventory levels, and calculate true landed costs. A specialized distribution ERP can help you ship goods directly from your supplier to your customer, while managing chargebacks. An ERP can convert multiple UoMs and currencies. The bottom line? A specialized distribution ERP reduces costs and makes you more profitable.
Benefits of Specialized ERP Software for Distributors
No matter the size of your business, you need a distribution ERP to help you scale and grow profitably. With the right industry-specific ERP, you not only save time—you save money. With a specialized ERP, you can:
Improve operational processes and performance
Enhance business-wide visibility and agility
Reduce costs with profitability analysis
Increase customer satisfaction
By creating efficiencies across your enterprise, consumer goods distributors can increase profits and ensure that the entire business uses the same real-time data.
1. Improve Operational Processes and Performance
You know that customer satisfaction is the key driver in growing your business. Specialized ERP software for distributors bridges the gap between client expectations and your capabilities. How? Because an ERP automates and standardizes processes, which saves you time and money and improves productivity. An ERP provides visibility by integrating all your systems and processes in one user-friendly platform.
While back-office and administrative tasks are necessary, they are also time-consuming and hinder employee productivity. A specialized ERP system tailored for your industry automates most of these tasks and streamlines administrative processes. Instead of spending hours compiling data and perusing spreadsheets, now your employees can concentrate on the roles for which they were hired—making them more effective, successful and happier.
Your management team will have quick and easy access to the data they need to make strategic decisions and operational improvements across the business. Purchasing and inventory teams will reduce waste by keeping inventory lean. And your sales team can dive into customer history to better understand buying patterns and improve customer relationships.
By automating routine processes, a distribution ERP cuts the human error factor and increases precision. Your employees aren’t wasting innumerable hours on menial tasks and can focus on meeting customer demands quickly, which in turn increases customer loyalty and customer revenues. With an ERP for distributors, you can easily reduce overhead costs, minimize mistakes and increase productivity.
2. Enhance Business-Wide Visibility and Agility
If you’re using multiple disparate systems and platforms to manage core business and operational functions, you cannot get an accurate picture of how your business is performing.
An industry-specific ERP system provides you with real-time visibility into operations and gives you instant access across your global supply chain. You get a single version of the truth. All decisions are data-driven, which allows you to proactively identify problems and correct them.
Your entire team has instant access to the information they need. They can sift through massive amounts of data in seconds and figure out the best course of action as disruptions arise. Let’s picture a real-world scenario. If inventory is arriving late from a supplier, your team can be notified. If needed, your business can notify your customers of the delay in real time with an updated delivery date. This allows your team to be agile and proactive as problems occur. You know that change is the only constant in this dynamic industry, so agility is key to your survival.
3. Optimize Inventory and Warehouse Management
An industry-specific ERP with a built-in warehouse management system (WMS) is essential for consumer goods distributors. An integrated ERP and WMS system controls the movement and storage of materials within your warehouse, accurately tracks and streamlines receiving, picking and shipping processes.
A distribution ERP system has robust demand planning capabilities. Your warehouse, supply and purchasing teams always have a clear picture of the amount of inventory you will need at any given time, which is crucial for keeping up with customer orders. It means you won’t run out of your top sellers due to poor planning or lack of information. With a specialized ERP for distributors, you have access to historical trends and patterns for a clear picture of what you need to meet demand.
This ensures inventory levels are always at the right level, and that you’re agile enough to meet demand. In turn, this guarantees happy customers. You’ll have the resources to instantly react in any situation—which is impossible if you are still using manual and outdated processes.
Where a distribution ERP really shines is in your warehouse processes. You get robust functionality for managing invoicing, receiving, picking, packing, and customer-compliant labeling and shipping. You can easily scale to fulfill both retail and direct-to-consumer orders.
Specialized ERP software for distributors also supports functionality that allows you to create shipments and obtain shipping and tracking labels for many major small parcel carriers, like UPS and FedEx. You control and view tracking information and costs within the ERP. Streamlining the pick, pack and ship process directly within the ERP; the system even creates all necessary labels. Data transfer and data capture is automatic.
4. Reduce Costs with Profitability Analysis
Profit erosion can happen in any business. It’s not due to missing out on a deal or equipment breaking down. Those are the normal risks and costs of running a business. It’s the small daily issues, if not addressed, that will eventually hurt your profitability. If you are still using spreadsheets and clunky processes to manage your consumer goods distribution business, profit erosion becomes an avalanche, where all money goes to maintenance and none to growth.
Specialized ERP software for distributors gives you the protection you need against profit erosion. Think of it as a retaining wall to shore up your business. An ERP becomes your central database, which means you won’t have to maintain multiple data centers or manage data across disparate systems. All aspects of the business are in one unified system, so you can easily identify unprofitable areas of the business and correct them.
A built-in profitability scorecard can help you determine how profitable your business is. The tool analyzes the profitability of each customer, each product and every supplier. You access the information in real time, and all costs are included, like freight, commissions, and even chargebacks. Once you’re armed with the most accurate information, you can make strategic decisions based on those analytics and insights.
Incorporating Business Intelligence (BI) tools helps you evaluate and analyze historical data stored in the ERP, optimizing purchasing decisions. This toolset transforms data into charts, graphs, and summaries to help you understand the business from the bottom up. Having these analytics at your fingertips prevents further profit erosion through small, meaningful changes. And these changes lead to big results.
5. Increase Customer Satisfaction
One of the biggest benefits of implementing a specialized ERP for distributors—and one of the most overlooked—is increased customer satisfaction. You have near real-time data about shipping and delivery times, including exceptions. If you actively communicate with your clients before problems arise, you prevent issues later.
A robust, agile ERP for distribution ensures a tight, transparent supply chain. All customer information, history and buying patterns are housed within the ERP, enabling your team to build client relationships, proactively communicate order updates and answer any inquiries. Happy clients translate to repeat and consistent business, which in turn translates to revenue and profits.
It’s Time for Specialized ERP Software for Distributors
No matter where you are in your digital transformation journey, an ERP can help. Whether you’re just starting to research how an ERP can transform your business, or you’re looking to replace an outdated or generic ERP to level up your performance—it’s clear that a system designed specifically for consumer goods importers and distributors is imperative. A specialized ERP will not only give you the five benefits we’ve discussed here, you’ll get a range of other advantages that will set your business up for success—both today and tomorrow. Are you ready to take the next step?
Aptean Distribution ERP offers your organization a unified, robust solution with powerful functionality designed to master your industry challenges. Our experts have the experience and understanding of industry best practices to ensure your success. We’ve developed our distribution ERP based on the unique needs of your specific business vertical which means our ERP enables your business to run leaner and more efficiently than a generic ERP option.
Want to know more? Get in touch to find out now how our specialized ERP can drive growth for your distribution company.