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How to Select the Best ERP for Distribution Companies
How to Select the Best ERP for Distribution Companies
Jun 1, 2021Ken Weygand
First things first, let’s talk about why you need an enterprise resource planning (ERP) solution. If you’re a consumer goods importer or distributor, you’re wearing a lot of hats, juggling a lot of balls, acting as both the head cook and the bottle washer. Simply, you’ve got a lot to do.
From proper labeling to forecasting to inventory management to warehouse organization to internal communications to compliance. And this list isn’t even extensive. For every one thing we talk about here, there are likely three other things we don’t mention that you still have to do. It’s tough, necessary work.
Here’s what an ERP does: it makes all that work you have to do, all the tasks and processes involved in running a successful consumer goods or distribution company, more efficient and more effective. An industry-specific ERP better positions you for business growth and profitability. It’s a way for you to clearly communicate with your teammates, vendors, consumers, customers and suppliers.
An ERP is a tool. You’ve got to figure out how to use it and train others on how to use it, but once you do that, its potential is explosive. You can scale up or pull things back, you can move your data to the cloud or keep it in a data center on-premise, you can manage the lifecycles of all your products, track what’s not doing well and make adjustments the following year. You can do all this because you have an ERP, a single source of truth, a tool unlike no other.
Now, let’s break it down by industry. If you’re a consumer goods importer or distributor, you don’t want an ERP designed and made for metal manufacturing. Or software that boasts “one size fits all.” One size doesn’t fit all. It wouldn’t do you, your customers, your teammates, your consumers any good to just make do. You want to thrive.
The same could be said about legacy software. It may have worked wonderfully for you ten, fifteen years ago. And we get it, we really do. Change is always hard. But sometimes, just making do with software that hasn’t been updated to enable drop-shipping, the ecommerce explosion, remote work and overcoming unexpected supply chain disruptions makes everything that much harder.
You want a software solution made by experts who know your industry inside and out. Who know your challenges and who can equip you with the right tools to overcome them.
Our distribution ERP has tools to support your goals. Tools like:
Product lifecycle management. Track your product from start to finish, from when it was first an idea to the point that it lands in the hands of your consumer and every single step in between.
Warehouse management functionality. With this kind of functionality, you get real-time visibility. You get optimized supply chain performance. You get smooth operations and picking and packing efficiencies. You get to run the warehouse—pick and pack zones, optimized spacing and efficiency with handheld devices—the way it should be run.
Profitability scorecards. Who doesn’t want to drive business growth and profitability? Our profitability scorecard enables you to do just that. It’s a tool that determines how profitable you actually are. The software dissects the profitability of each customer, product and supplier.
Electronic data interchange (EDI) services. About 80 to 90% of business-to-business traffic is conducted using EDI and growing 3 to 5% annually. EDI is the future when it comes to communicating with your vendors and customers. EDI streamlines communication and fosters more robust relationships between business partners. There are fewer data inaccuracies and fewer miscommunications. With our ERP for distribution companies, you can either manage EDI yourself, or we can manage it for you—whatever best suits your team’s goals.
Import management. Get your customers what they want when they want it with import management functionality. You can track shipments, vessels and containers in real time. That way, you know the inventory you have available and what’s coming and when.
Landed costs and tariff management. There’s often a big gap when it comes to how much money you think you’re making and how much you’re actually making. With a landed cost management tool, you have easy visibility into your true landed costs, making it that much easier to ensure profitability in the long haul. The same rule applies to changing tariff legislation. Knowing how much your product is relative to how much it will be after new tariff implementations enables you to calculate your true landed costs.
Direct-to-consumer (DTC) shipping functionality. Suppose you’re distributing thousands of single-parcel shipments daily. In that case, you need to effectively manage increased order volume, increased fulfillment requirements, new complexities around the warehouse and more nuanced shipping methods. An ERP for distribution companies not only accommodates these DTC challenges but supports mastery within them.
Ensure You Select an ERP Fit for the Future
The best ERP for distribution companies changes as they do. As the industry does. You need an ERP that adapts and adjusts, and scales as your business does. It should be a solution that’s as unique as you are.
As you read this, whatever day that may be, think back to one year ago today. How different the world was. We were in mandated lockdowns, shipping had either stalled or exploded depending on your industry or vertical. No one was sure of what would happen either in the short term or the long term.
Our ERP certainly couldn’t have answered all those questions. Still, it could have better prepared you for unexpected supply chain disruptions caused by something akin to a pandemic or tornado, and in the midst of that, enabled you to adjust and appropriately react to a new set of circumstances.
And, when business is booming and you want to scale, a specialized ERP for distribution has the functionality you need to scale without hiring more people or purchasing more equipment. It’s robust enough to enable that uptick without adding to your overhead costs.
Lastly, if you really want a distribution ERP that’s fit for the future, you want a distribution ERP that’s SaaS-enabled. Because when an unforeseen incident does occur, your data is stored safely in the cloud, protected and accessible. With an on-premise solution, you’re tied to your building, to the environment in which it’s stored. SaaS means freedom, means fewer upfront costs and means more accessibility and mobility for you and your team.
When you’re trying to select the best distribution ERP, you need to make sure it supports your goals now and in the future. So that no matter what happens, you’re Ready for What’s Next, Now®.
Consider Implementation and Timelines
Implementation, invariably, is the most challenging part of the whole process. It involves acclimating to change, training your teammates and employees, and adjusting to a new kind of normal. But the payoff is undoubtedly worth it.
Don’t just take our word for it. We interviewed many customers and put together a list of ERP implementation best practices.
We’ll break them down for you here, but for a more thorough and detailed explanation, click the link above for the post in its entirety.
Be clear on the real needs and goals of your business
Understand the proper functionality of your ERP solution
Be careful to choose the right ERP partner
Track your data before, throughout and after ERP implementation
Consider the impact of implementation on your current processes
Generate a realistic timeline
Don’t forget testing and training when creating your timeline projections
Ensure you have executive team buy-in and commitment when it comes to implementation
Include your entire team in the implementation process
Consider whether or not you’re really ready to go all-in
Ensure the system prepares you for now and for the future
Choose a Trusted Partner
Beyond having the right ERP, you also need the right partner. A partner you can trust and a partner who’s with you for the long haul. Implementing a new ERP is a big, transformative undertaking. You want a partner who not only recognizes this but who’s there to answer questions and support you during updates and hiccups.
Also, a partner who has industry-specific knowledge, who knows your industry and can provide recommendations and best practices. A vendor with that kind of expertise will make the implementation process that much easier and ensure quality support for the entirety of your partnership.
Aptean is a partner who’s with you every step of the way. In fact, it’s part of our mission to help you solve tomorrow’s unique challenges today with purpose-built software and superior customer service.