Whether you’re selling off-the-shelf products or delivering custom-made items, wholesale distribution offers a lot of challenges. Enterprise Resource Planning (ERP) could be the right solution for all your business needs. An ERP system will help your company become more efficient and result-oriented.
Let’s look at some pain points faced by wholesale distribution channels and how they can be solved by utilizing an ERP.
1. Inventory control problems
Organization of inventory is a huge challenge for distributors. Tracking orders, optimizing storage, moving goods, planning transportation – all this needs a lot of planning and documentation. With just a small mistake, a few orders can easily become misplaced. The workflow becomes more organized with an ERP. You can keep track of all the pending or fulfilled orders plus stay informed regarding stock outs. With its demand planning and inventory counting feature, you can keep the supply and demand in sync. Since everything is automatic, there is less overhead and more savings.
2. Traceability issues
Without the right kind of automation, wholesale distributors have to enter details in spreadsheets. Manual entry is cumbersome and prone to errors. Also, spreadsheets are unable to store all types of inventory and delivery information. With an ERP system, you can have backward and forward tracking to trace all items along with their quality control assessments.
3. Communication barriers
Understanding customers becomes difficult for large level corporations. If the geographical differences among your warehouse, your suppliers, and customers are too large, there will be language and currency conversion barriers. With an ERP system, everything will be integrated as it comes with support for multiple languages and currencies. So no matter where your stakeholders are located, you can maintain transparency and communication across regions.
4. Pricing slip-ups
Pricing slip-ups can be costly, especially when you have low margins, which is usually the case for most wholesale distributors. Sometimes customers can request discounts on wholesale products or ask to be issued a credit, and that can further slim down those margins. It’s not easy to calculate the right prices accurately. With an ERP system, you can easily set different price levels for wholesale, retail, and custom orders. You can even set discount policies for your loyal customers through VIP orders.
5. Loss of integration
Fetching data from several spreadsheets takes time and creates confusion. When the data is not integrated into one place, important information can get lost in translation. With an ERP, all the required details will be stored in one place and you don’t have to pull out fragments from various files. Consistent and correct information will help you take better business decisions.
6. Complicated processes
If your disparate solutions across departments, for example between sales, warehousing to accounting, it can complicate your lead-to-cash process. However, when you use ERP, data is stored in one location that is accessible by all departments. Everything is centralized and easy to operate. Thus there are no complications and reduced risks of errors. It also makes material requirement planning easier, reducing your efforts for resource management along with an optimized lead-to-cash process.
7. Lack of mobility
Modern day businesses have global clients which means there is no concept of an absolute value of 9 to 5 timing. It might be your bedtime, but across the pond your customers are up and ordering. This means your system must be running 24/7 and the project lead should be able to access it from their home, or at the least your system needs to be able to gather order requests passively for your CSRs to facilitate the quote to cash process. While a traditional system needs your presence in the office, the ERP system can be accessed wherever there is an internet connection – even on your phone.
8. No standard reporting
Without an ERP system, there is no reporting tool that can examine all data related to distribution and generate an accurate assessment. An ERP with Business Intelligence will update itself with each transaction and so you can get highly customized and accurate reports. This will further help you in taking business decisions.ERP is not just a software solution, it is an empowering tool for wholesale distribution systems or manufacturers who also deal in distribution.
At Kloudville, we’re focused on providing businesses with the best back office software possible. Our applications are designed to make the lives of executives, owners, and operators easier. Kloudville allows businesses to work better, so that they can focus on their core operations from lead to cash and grow bigger, faster.