What Kind of Distributor Are You?

Blog Written By | ERPFocus

Distribution ERP – What Kind of Distributor Are You?

Evaluating advice and information relating to ERP and distribution requires first that you understand exactly what portion of the distribution spectrum you are interested in, and then, what portion of the information – vendor claims, ERP implementation consulting experience. etc. – your evaluation is referring to.

Distribution can refer to channel – retail or web or wholesalers, for example. It can be shorthand for the primary function of administering transportation routes and freight management. If the distribution is used in the context of manufacturing, then it may be limited to getting finished inventory off the loading dock and on to a truck. In all of these cases, the functionality requirements of distribution ERP software are significantly different, and the vendor selection process can and should be different.

Channel Distribution

Managing channel distribution is largely a matter of marketing strategy. How you choose to sell your products, and to whom, must be a well thought out approach, or you can end up alienating your customers. For instance, if your primary channel strategy is to get your product to market via regional distributors, then later decide to also offer your product directly to consumers via a website, that could put you in direct competition with your distributors. The types of ERP solutions that help manage this sort of distribution have more elements in common with customer relationship management (CRM) than traditional supply chain management.

Logistics Based Distribution

Companies which make their money primarily from the transportation of goods from one point to another are dead center in the distribution spectrum. These companies deal with a very unique set of business problems and need a very unique set of ERP utilities as a result. Distribution companies are extremely sensitive to fuel costs and fuel consumption, and the effect changes in either can have an effect on costs and productivity. Transportation companies operate in a highly regulated arena, in which the hours drivers can work is rigidly specific, and can sometimes complicate the planning for long hauls. Truck and trailer (asset) management requires its own unique math formulas and logic. And all of this occurs in an environment that is chronically short of qualified drivers. Distribution ERP software for this segment needs to integrate smoothly with these business problems.

Manufacturing Distribution

Manufacturing operations often have a distribution function that is almost entirely a warehouse function, whether the warehouse exists as a part of the factory, or as a separate distribution center facility. Warehousing issues typically involve picking strategies, inventory movement, financial control, cycle counting, bin location, safety management, and document creation for bills of lading, shipping labels, and packing lists. Again, the ERP packages that handle these things effectively probably aren’t effective at handling the previous two categories of distribution.

The conclusion is to be well versed in what distribution requirements you have as you do your research for the right ERP vendor. No distribution ERP system on the market is all things to all organizations, and finding out the right fit for you will take self-knowledge and patience.

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Looking at Warehouse Management in ERP

warehouse management

Blog Written By | ERPFocus

ERP for warehouse management

If you are a manufacturing company that engages in distribution as a sideline, simply as a means of delivering your manufacturing output to customers, then you are likely to be both appreciative of and possible overwhelmed by warehouse management functionality in ERP. On the other hand, if you are primarily a distribution company, then you likely know how and why you make money and, when choosing distribution software, will emphasize the features warehouse management that contributes the most to your operation.

Labor efficiency in warehouse management ERP

If labor efficiency is the key success factor in your distribution operation, you will want ERP to deliver a warehouse management system that has a robust capability to optimize pick-and-pack strategies. One strategy might be to simply minimize pick time, while another if space is limited and trailer turnover is critical, would be picking and staging complete orders most efficiently. The right warehouse management ERP should offer different picking options, allowing you to experiment and find the one that suits your company.

Levels of control

For some distribution operations, labor costs associated with picking, staging and loading a shipment are minuscule compared to the cost of an incomplete or erroneous shipment. Imagine that you were responsible for shipping the lighting and wiring kit for a new restaurant. The truck arrives on site, the wire is there, the light fixtures are there, the switches are there, the circuit breaker is there, but the electrical conduit…somehow didn’t get on the truck. The electrical crew just stands around waiting while the project manager desperately scrambles to postpone the arrival of the flooring and furniture, In this case, your warehouse management system needs to have strong controls and redundant verification loops.

  • Did everything for the order get picked up?
  • Did everything for the order get staged?
  • Did everything for the order get on the truck?

Bin Control

Another facet of warehouse management ERP is bin control and your required level of sophistication. When designing your controls for inventory control in ERP, you will learn that if you put generic inventory into a bin location, and then remove it in its entirety and ship it, you probably need a different level of bin complexity than if you remove 100 units of inventory from a bin, count out forty units for an order, and return sixty units to the bin. And that is a different level of sophistication from being easily able the forty-unit order, and return forty previously allocated units to the original inventory location.

At the end of the day, using warehouse management effectively within (or without) ERP is about emphasizing capability when it aligns with your business strategy and simplifying as much as possible the features that are not mission-critical. If you are not able to do this effectively, you may end up with a warehouse operation that is more complicated than you want without any additional benefits. If distribution is not your primary source of profit, then you may have to take what you get; the ERP package will be decided on for reasons other than warehouse management. If this is the case, be prepared to overman in the short term, and figure out how to automate in the long term.

Dynamics 365 Business Central, on the other hand, offers a wide range of modules for businesses to grow into. You can keep your finance, sales, operations, and warehouse management under control – all in one system. This adaptable ERP offers a wide range of benefits for small to medium enterprises. To find out more, contact allonline365 to speak to one of our consultants. Call us on +27 (21) 205 3650 or email  info@allonline365.com.

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Distribution ERP System: Does your business need one?

distribution erp management

Blog Written By | ERPFocus

3 Signs your business needs a new distribution ERP

You turn the crank. The music plays. Suddenly, Jack pops out of the box. Once upon a time, things moved along in an orderly fashion to the expected conclusion. Business just isn’t that simple anymore and knowing when to replace your distribution ERP and upgrade your business systems is one of the complexities. Here are three sure-fire signs that your legacy distribution ERP is in need of an overhaul.

Frequent Inventory Shortages or Excess

Look around your warehouse. Are your shelves full but you rarely have the right products on hand to deliver the entire order? Distribution orders run on having the inventory the customer wants next and nothing more. A new distribution ERP can help achieve that goal.

Fast and efficient order entry allows checking of product availability immediately. On the shelf now? Available now, or has another customer asked for it? Distribution ERP will reply in a second. Not on the shelf? No problem. Where did you buy it last time? How long did it take to arrive? Is there a comparable product you have already that will satisfy the customer? Modern purchasing and supply chain tools will have an answer.

A good distribution ERP should work in reverse too. Too much on the shelf? Can you return it? Who bought it last? Maybe they want a few more still. It might be best to simply clear the shelf and make room for something that will sell. A new distribution ERP can help make those decisions and many others through accurate “inside-out” reporting.

Your Distribution ERP Stands Alone with No Integration

Modern technology of all types can help and today’s distribution ERP can connect to and use data from all of them. The big boys have conveyors and they fill boxes as they move along the line. The conveyor weighs the filled box and connects directly with the carrier system to prepare the shipping documents and get tracking numbers before the box is taped closed. That s integration. At the same time as the box is closed and signed-off for dispatch, the customer is charged through your ERP payment processor integration.

One more SKU is due this afternoon to complete that big, important order. Your inbound trucker carrying that item has already made an appointment for your dock to unload. Your new distribution ERP identified all the products on that truck, calculated the best dock and prepared a cross-dock movement of that last SKU so it gets on the outbound carrier with no delay.

Your Business Does Not Utilize E-Commerce

Allow customers to place their own orders and pay for them right away. The web portal links directly to your new distribution ERP so you can schedule a delivery or purchase the items desired. Even complex orders are handled with ease. You can deliver specific lots to fill the order. You can track the shelf life of your product to ensure your inventory is good and to provide maximum shelf life to your customer. Distribution ERP will also control inventory using FEFO or FIFO rules as needed for your business.

Distribution ERPs do not have to cost you a fortune anymore, with Microsoft’s standard Dynamics 365 Business Central and extended modules you can customize the system to suit your business needs at an affordable cost. Let allonline 365 help you solve those burning questions and help you digitally transform your business. Contact us on  +27 (21) 205 3650 or  info@allonline365.com.

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