Distributors are the companies who buy and store products, and then sell those products through distribution channels for a profit. While new technology and recent economic changes have impacted businesses everywhere, no one is affected more centrally than distribution companies.
Retailer demand and pressure from manufacturers have created profit margin concerns for distributors who, just five years ago, were growing at lightning speeds. With giants like Amazon as a competitor, even smaller distribution operations have become more lean and precise.
And in an increasingly digital economy where online ordering has become a lifeline for consumers during widespread shutdowns, retailers are even finding new ways to connect directly with manufacturers, cutting out distributors altogether.
The e-commerce process continues to evolve in ways that improve the experience, so the customer wins in the end, but not the distributor. It’s clear distributors who lack visibility are the ones suffering and need better information to drive their decisions – but where do they get it and how?
Better Decisions Through Better Business Data
It’s all in the data, and if you’re a distributor with unmanaged data, it does more than just slow operations. It hurts the customer and your ability to meet their demand for your products. Letting your data continue to accumulate unchecked allows your competition to use theirs to get ahead. Amazon is undoubtedly using the power of their data to sell more, why shouldn’t you?
Data is an essential ingredient for making better connections into your supply chain and shining a light on your blind spots. Data lets you work smarter and more efficiently so you can eliminate redundancies and reduce waste. When you manage and understand your distribution data, you get the visibility you need to make informed decisions to become a more agile operation.
Can you make your data work for you?
For most distribution companies, the first step in conquering data challenges is finding out how tall the data pile is. Companies lose sight of runaway processes and inventory errors for various reasons, but manual processes and disconnected systems are usually to blame.
By manual processes, we mean the spreadsheets, paper, and email that make up your procurement processes and create more work for distribution businesses—the faxing of purchase orders, manually inputting check amounts and order quantities. These are all prone to human error when errors in this space can be expensive.
And by disconnected systems, we mean those that surface as a result of manual processes and open the door to duplicate entries into different distributor solutions, then into your CRM. By patching together off-the-shelf ERP systems with other solutions to meet the need, more distributors are learning hard lessons. When you try to make sense of it all, you end up with a mess of different solutions tangled together.
By avoiding spreadsheets and tangled solutions for all your essential processes, you can start unpacking all your data and taking steps to control the flow of information. Then you can begin making your data work for you by knowing what to measure and track.
Know What to Measure
The processes you measure are the processes you improve. It’s important to grasp that the ability to generate and gather data is second only to understanding its relevance. There are other variables in your business beyond revenue, cash flow, loss, or profit, so it is crucial to know how this info came to be.
The answers come through key performance indicator (KPI) tracking, which represents the essential measurements that can unlock your company’s real health and detect otherwise unknown opportunities. Through accurate data and transparent tracking, you get a clear picture of whether those processes are getting better or worse.
The Right ERP Solution for your Distribution Business
ERP systems draw all operational data under the same umbrella by integrating various data pipelines and presenting it through a single dashboard, giving you the tools to analyze, cross-reference, and generate reports of virtually every aspect of your operation.
Distribution ERP differs from traditional ERP systems through the additional tools available for the job processes specific to distribution companies, such as logistics management, inventory management, and more.