5 Reasons Distributors Need ERP Software

Being a sustainable and profitable distributor requires efficiency. But quantifying the ability for the business (a.k.a “efficacy”) to produce a desired is nearly impossible. Instead, we focus on defining efficacy by breaking it down into quantifiable processes like customer satisfaction, increasing sales, decreasing wasteful expenditure, better use of available resources, less time spent on redundant processes, among other components.

Software helps businesses track these components to drive tangible results. In distribution, given its many moving parts, tracking, analysing, and managing the process is nearly impossible without effective ERP software. This tracking, analysing, and managing that is made possible by ERP software forms the foundation of the 5 reasons why distributors need ERP software.

1. Reach Key Objectives

What are the primary goals and outcomes you want to accomplish within the next quarter or year? Perhaps you’re considering increasing your distribution base or expanding your warehouse. Regardless of what it is, you need to focus all your resources on implementation. 

ERP software allows you to implement your plans by starting at the source of many distribution issues: deficiencies. Deficiencies within your supply chain or warehouse are responsible for draining finances, causing delays and increasing customer churn. 

When you know what is responsible for those deficiencies, you can make better decisions. ERP software displays what affects your warehouse’s output, which suppliers are redundant or consistently behind schedule, and which products are your successes. 

Having these insights enables you to implement the changes that will reach your company’s objectives.

2. Save Cost

Profitability does not begin with more revenue, per se. Instead, it can occur by reducing wasteful expenditure.

A good ERP suite gives you the ability to determine profitability by warehouse, product line or business unit. Additionally, reporting and data visualization tools help you find cost overages and other stains on profitability that escape common financial reports.

3. Decrease Customer Churn

Clients aren’t interested in the supply chain of your business. They want convenience and availability because their customers want convenience. However, your supply chain is crucial to the customer experience. Where will clients go if you don’t have stock? Which of your competitors will clients choose if your stock is damaged or has long lead times?

Customer experience is the new battleground. Winning this battle starts by improving the management of your inventory and suppliers. 

Because a broken supply chain leads to frustrations, disappointment, and bad experiences, which increases customer churn. 

However, with ERP software, you can close the gaps in your supply chain, leading to a better customer experience.

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4. Maximize Your Warehouse

Without proper systems in place, it’s easy to misuse your resources and not be aware this is taking place. Your warehouse is usually one of the largest loss incurring aspects of being in the distribution business because the sheer size and capacity of the building make it challenging to manage. 

You exacerbate this by the inability to monitor your inventory. 

However, these challenges are mitigated by ERP software as it enables you to track inventory across your warehouses.

5. Reduce Order Times

For distributors, a straightforward answer on how to improve competitiveness does not exist. However, the answer can be attributed to speed. Consider that the primary objective of your client is to have their customers prefer buying products from them. This requires them to act instantaneously to provide customers with the products they desire. 

With this knowledge, you can deduce that having long lead times increases customer churn because as a distributor, you pass on your delays to clients, which in turn passes it on to their clients. 

However, ERP software solves that by automating the process of ordering, fulfilment, and shipping.

So, what next?

Many companies are either upgrading their ERP software to cloud-based or undergoing a digital transformation to ERP systems. This places enormous pressure on distribution businesses to begin the process of upgrading and improving. As an exhaustive ERP, we’ve included the best ERP features in our software and continue to expand and improve our features so distribution businesses can grow alongside us. 

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