Which ERP software for your distribution business?
Buying in goods and shipping them out - it's pretty straightforward really. So, why are we wasting time talking about this?? Surely, most ERP or Accounting software solutions can cater for the basic requirements of Finance, Inventory Control, Order Processing etc.. Or can they????
To "borrow" a term used on a recent ad... are we really talking about just "any software" here? Well not exactly...
Although distribution itself is straightforward, there are some important questions you should ask yourself before you change your system or before you sit down with your Board/Management Team to plan the next phase in your growth strategy. The notion of "clone and go", where companies are growing but just keep moving ahead with the same old systems can actually do more harm than good.
Anyway, back to my important questions:
1) Do I need to categorise my stock items by sizes, colour, styles or other dimensions (matrix items)? Is my current system up to the job?
2) Am I able to dynamically forecast my demand to help me with my purchase ordering and avoid stock-outs or over-stocking?
3) What if we open up a web shop - how will this fit in with my ERP solution?
4) Should we re-think how we manage our shipping? Would we benefit from integrating with UPS or DHL?
5) How useful would it be to "upsell items" when on the phone with customers?
6) What if CRM were just part of the overall system and we could see what's going on with customers from every perspective
7) Are we really getting useful Financial and Business KPI's and information from our current system? What if we could eliminate the time spent pulling data into and out of spreadsheets?
8) What if we could run our marketing campaigns from the same ERP system - could this give us a better result?
9) Is my "Pick, Pack Ship" process as slick as it could be?
10) Are we a little "ad hoc" in our order processing and inventory management? Should we have more defined processes to avoid mistakes, returns, credits etc?
11) Are we getting the financial reports and statistics that we need to plan for the future?
12) If we set up another office in another country, are we able to handle this from a language/legislative perspective?
13) Would we be able to cut costs by moving to the cloud?
14) Would our Management Team and Directors like to see relevant information about the business while on the go?
Growing a distribution business today doesn't necessarily mean adding more square footage of warehouse space. Distribution businesses today look to new channels and new markets to find their niche and grow. Some distributors will get into manufacturing, others will move into retail or online sales while others will combine all of the above, transforming themselves into a full omni-channel business. The important point is to have the "right" systems in place to enable you move or glide with ease as your business evolves.
So, this whole notion of "clone and go" doesn't really lend itself to a taking a step back, thinking about your business plans and focusing your efforts on getting the right systems on board to enable you move to the next level. Keeping old systems in place with some sticky plasters may work for a period of time, but ultimately this type of thinking will hold you, your team and your business back and stop you from achieving the kind of success you envisioned.
Read about how this distribution business moved system, scaled up and accommodated 30% revenue increases with no additional personnel....