If you’re a distributor, what business are you really in? On a day-to-day level, your business sources product from suppliers, stores it until it’s sold, and then transports it to customers. In its essence, though, a distributor is in the money management business. You’re taking cash and turning it into inventory. Tick tock – the longer it sits there, the less of a return you’re earning on that cash. Any operational or customer relationship issues that further stretch out the payment for a sale is lowering your return on capital even more. If you borrow to finance a distribution business, you’ll understand this problem deeply.
Software has long assisted distributors in making their businesses run right. Today, though, modern enterprise resource planning (ERP) solutions give you new ways to cut costs and shorten that all-important cash cycle. Here are five reasons you need ERP software if you’re in the distribution business:
1. Be able to improve customer satisfaction and cut costs at the same time
A modern ERP suite allows you to be efficient in the management of distribution processes. You get real time visibility into available inventory and inventory costs, inventory in transit and reorder quantities. This visibility translates into low operating costs and clear, productive communications with customers. You can cut down on misunderstandings and delays that negatively affect customer satisfaction.
2. Reduce order times
Automated sales order processing, which is available in ERP solutions, eliminates delays in order fulfillment and shipping. The suite usually also enables you to set up rules to handle credit, returns, drop shipments and so forth across multiple warehouses.
3. Run an efficient warehouse
The more efficiently your warehouse(s) run, the more profitable your distribution business will be. A Warehouse Management System (WMS), which comes with many modern ERP suites, lets you streamline your distribution processes. The system covers workflows across receiving and inventory management as well as the operation of tools like barcode scanners and mobile devices.
4. Stay on top of your supply chain
ERP enables you to ensure a steady supply of goods to distribute. It accomplishes this by automating and optimizing purchasing processes, purchase order management and supply chain management.
5. Know your true costs
A modern ERP suite gives you the ability to determine profitability by warehouse as well as by product line or business unit. Reporting and data visualization tools help you spot cost overages and other drags on profitability that may elude standard financial reports.
Control Your Inventory and Increase Customer Satisfaction with Cloud ERP Built for Distribution
Those are just five big reasons distributors can benefit from modern ERP. You can also push up your profitability—through a better cash cycle as well as more efficient operations—by means of advanced inventory software, requisition management and advanced financial reporting tools.
Distribution is all about logistics. Without the right tools, distribution companies simply can’t compete. We have considerable experience in the distribution vertical, equipping clients with industry-specific tools, like Acumatica, that ensure a smooth process, top-notch security, and consistent reliability.
Acumatica Distribution Edition delivers, giving your business control over their supply chain and logistics activities, including warehouse management, inventory management, and order management. Built in the cloud and customized for your needs, Acumatica helps companies improve customer satisfaction, reduce order times, and control costs across the entire supply and distribution chain.
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