Blog - ‘Profitability Series’
Thursday, December 8th, 2011
As a distribution company you have an opportunity to stand out from your more complacent competitors by enabling your customers to easily order from you, and track their orders online.
Small to medium-sized distribution companies are certainly not as quick to deliver this feature as the major online distribution houses. But your customers are used to ordering their own goods at home, having inventory and shipping information at hand immediately.
So, can your ERP system deliver when it comes to user friendly shipping and order information? Is it seemlessly integrated to your in-house system? Easy access to shopping carts, inventory status and shipping information is what your customers live with in their personal lives. Do they want to step “back in time” at the office?
Its time to involve your customer in your ERP solution.
Tags: ERP, order, track
Posted in CRM, Profitability Series | No Comments »
Wednesday, November 30th, 2011
Our previous posts in the current series on “Building More Profit In Your Distribution Business” covered pricing, inventory, warehouse management, customer relationship management, and customer order tracking.
Data is flowing to and from your customers, vendors, administrators, salespersons and operational areas. Data is flowing to and from from your ERP systems, your CRM system, your website.
The key to make all this work is integration.
When an order is entered in your ERP system, you don’t want to spend the extra time and money to enter it again into your CRM system or if it came from your website, you don’t want to then enter it into ERP and CRM…too many hands on one set of data.
Compounding the problem of multiple systems and different roles within your company that need access to accurate data is the existence of different devices.
Servers. Desktops. Laptops. Smartphones. Tablets. Voicemails. Emails. There are lots of different touch-points where data is coming from and going to.
Can you take all the pieces you have in place and connect them? For the best return on investment, laborious custom tasks should be reduced to a minimum.
An experienced systems integration company working with a state of the art software solution can turn your disparate systems into a seamless whole.
For today’s profitable business, using one solution with all the necessary pieces will keep administrative costs, maintenance costs and operational costs at their optimum lowest level.
And your customers, vendors and employees will have all the data they need at the right place and at the right time.
Tags: disparate systems, integration, multiple systems
Posted in CRM, Profitability Series | No Comments »
Monday, November 28th, 2011
Inventory Management is the number one reason distribution business owners buy software. But Customer Relationship Management should be the number one reason distribution business owners buy software.
In our last “Building More Profit in Your Distribution Business” post, we discussed the need for warehouse management in your software solution. Managing inventory, warehouse by warehouse is important, but only if you have the sales that are actually looking for the inventory.
How will you track sales and your sales pipeline?
How will you keep track of all the leads that come into your business from the marketing department? How will you track the conversations your sales people have had with your prospects? How will your sales people prioritize the time they spend with their prospects? How will your marketing department know which prospects need further marketing?
If sales is the lifeblood of your company, then you need a ready answer to these questions.
That’s why CRM software should be your number one priority
A robust, professional cloud-based or in-house CRM system enables you to:
- Track customer activity: conversations, emails, information they’ve consumed, meetings they’ve had with you.
- Track sales person’s activity: prospecting calls, follow-up calls, nurture marketing activity, demonstrations and meetings.
- Market to your prospects: determine which prospects are cold and require educational marketing, and which prospects are further along the path and require more trust-building marketing.
In other words, a CRM system helps you take control of your sales process, just like an ERP system helps you manage your inventory management process.
Make acquiring a CRM system a priority
You manage your Inventory with your ERP software. But you’re not in business to move inventory from one warehouse to the other. You want to sell it. This is the purpose of your business.
So make CRM software a priority now.
Tags: crm, distribution business
Posted in CRM, Profitability Series | No Comments »
Tuesday, November 15th, 2011
If a distribution company with multiple warehouses had a Facebook page, what would its relationship status be?
“It’s Complicated.”
In our last “Building More Profit in your Distribution Business” post, we discussed inventory as the number one focus of small business owners with their software searches.
You might be a wiz at using your current software, or Excel, or even index cards, to control inventory in your one warehouse. But add an additional warehouse, or two, or three, whether they’re virtual or physical, and your current system breaks.
Can your current software keep up?
Your inventory could be spread across warehouses, or you might store different items in different warehouses. You might have two or more warehouses.
But do you know what are your committed, on hand and on order counts across all your warehouses are?
Can your current system handle this? If not then it’s time for an overhaul.
Conclusion
A modern ERP system can easily help you take control of inventory not just for real-time numbers and forecasting accuracy, but over several warehouses.
If you’re running multiple warehouses and your software isn’t specifically designed for this, then it’s time to get new software.
Posted in ERP, Profitability Series | No Comments »
Wednesday, November 9th, 2011
Want to know how to lose a customer? Sell them your product, and then tell them you can’t ship it for weeks because it’s not in stock.
For a distribution business, over-promising and under-delivering is an inventory problem.
In our last “Building More Profit in your Distribution Business” post, we discussed the importance of incorporating your own pricing formulas into your software. But, as every distributor knows, you can price properly and sell more, but without accurate inventory counts, you can’t make accurate promises and can’t deliver on time.
Does your software help you manage your inventory?
Inventory control is the top reason that owners of distribution companies shop for new software solutions. Many times, their current in-house systems have capabilities around inventory that can solve inventory status problems.
But modern ERP systems were designed with inventory control as a core functionality, in addition to accounting and pricing.
But maintaining inventory counts to provide the high visibility you need to gain and maintain customer trust in your delivery promises has to become a priority.
Is inventory control a priority for your Operations Department?
To keep inventory visible and forecasting accurate you must re-establish in-house priorities and demand real-time data on the following:
- Purchase orders
- Receipts
- Shop floor control
- Order entry and
- Shipping data
Your staff and managers must make collecting and entering this data into your ERP system a priority.
Get inventory under control and differentiate yourself
The good news is, your competition probably does not have accurate control over their inventory. Or if they have, they made not be using it to improve customer service.
Many ERP systems enable you to extend real-time inventory information over wireless networks, so your distribution sales staff can provide on the spot and accurate inventory counts to your customers while on-site.
Conclusion
In the distribution business, not only does pricing make or break your business, but so does inventory control. An accurate, real-time view of your inventory allows you to project inventory levels into the future, and avoid over-promising and under-delivering.
A great way to keep your customers loyal, and differentiate yourself from the competition.
Most modern ERP systems provide inventory control as a core functionality, in addition to pricing and accounting functions.
If you’re in the distribution business and you don’t have an ERP system yet, you should probably get one ASAP.
Posted in Inventory, Profitability Series, Tip of the Week | No Comments »
Monday, October 31st, 2011
Pricing can make or break your distribution business.
But it’s one of the most complex parts of your business. In this ultra-competitive business climate you need to make sure you’re priced competitively, while handling other complexities such as volume pricing, customer-specific pricing and vendor-specific pricing.
Keeping track of all the moving pieces can become a full-time job.
The Importance Of Price Management
Your distribution business relies on competitive pricing. You also may have contract-specific pricing, and may also offer vendor-specific specials. Your sales people may have negotiated special pricing in order to bring on a new customer, or close more business during the last day of the quarter.
Managing pricing specifics has never been more important for a distribution business.
Many companies use spreadsheets to manage their pricing. But keeping track of the different versions of spreadsheets across your company can be overwhelming, especially when you’re trying to decide which version contains the current pricing formulas.
ERP Systems Make Price Management Easy
Enterprise Resource Planning (ERP) software systems provide the answer.
You can add complex formulas for customer-specific, vendor-specific, and volume pricing to your ERP system, so when your customer places an order the correct price is automatically calculated.
But ERP systems add an additional element: the trust factor.
Instead of chasing the latest Excel spreadsheet with the correct formulas, an ERP system is always up-to-date. As the common industry buzzword states, an ERP system contains the “single version of the truth.”
Conclusion
In the distribution business profit margins can be razor thin. Pricing items too low can erase profits. But commoditization and globalization also means slight differences in prices could mean the difference between competitive success or failure.
An ERP system provides the answer. These are sophisticated systems that take complex pricing formulas and automatically apply them to your ordering system.
If profitability in your distribution business depends on complex pricing arrangements, you should seriously consider implementing an ERP system
Tags: erp systems, pricing, profitability
Posted in ERP, Profitability Series | No Comments »
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