How your distribution operation manages its inventory says a lot about your company. If your inventory management strategies are failing and your inventory costs are increasing, your company could be losing hundreds – even thousands – of dollars every month. If you aren’t constantly focused on improving your inventory management, your company will experience limited growth and success.
Research shows that distributors who actively manage their inventory levels far exceeded the companies who do not in terms of growth and sales. Inventory is, after all, the biggest asset for most companies, and if you aren’t controlling it with the right tools, you are setting yourself up for failure. Enterprise resource planning (ERP) software can help you manage your inventory efficiently and lower your overall inventory costs. All ERP systems, however, are not created equal.
As you go about evaluating ERP software, ask yourself the following questions:
- Is the software customizable?
According to recent studies, 92% of distributors use ERP software to manage their inventory and other business processes; however, many of these solutions are not customizable to fit their needs. By replacing an older ERP system with a newer, customizable system, distributors can improve efficiency, reduce working capital, and free up 15% – 20% of cash tied to inventory.
- Does it deliver real-time inventory intelligence?
Having access to real-time information is crucial for the success of every part of your distribution operation. By using an ERP software solution with real-time inventory intelligence, you could improve fill rates by 2% – 10% and reduce stock-outs so your customers receive what they need, when they need it. Inaccurate inventory information leads to errors in the delivery process and problems in customer service. With real-time reporting, every area of the business is informed and ready to answer customers’ questions.
- Does the solution support purchase planning? Does it deliver purchase planning intelligence?
Accurate purchase planning relies upon your ability to access important inventory information when you need it. It can help reduce excess inventory while eliminating stock-outs. Modern ERP software can help distribution companies reduce excess inventory by up to 10 – 15% and cut the time spent on forecasting in half. Having access to accurate information about your inventory can also improve forecasting by eliminating manual errors in calculation.
A new ERP solution can help distributors streamline inventory management, save money, and decrease inefficiencies. If your distribution company is operating on an old or outdated ERP system, it may be time to invest in a new solution. Contact our distribution experts today to discuss your needs. We’d be happy to point you to the best ERP solution for your company.