10 Tips to Help You Get the Most Out of Your ERP System as a Wholesale Distributor

Your sales are flying, but profits are only limping along.

That’s not what you expected for your wholesale distribution business.

But with growth came mounting complexity:

• Thousands of SKUs quickly moving in and out of your various locations

• Daily headaches from your wide-ranging supply chain

• A non-stop balancing act in inventory management as you scramble to get customers what they need without choking your cash flow

Moreover, competition is fierce and customers seem ready to switch their business at the slightest letdown in service.

Fortunately, you’re well into your search for an ERP system.

That software’s capacity for centralizing data from all your business functions will give you complete visibility into your operation in real time. You’ll eliminate or automate processes and make better decisions faster based on real-time data.

As you kick the tires on ERP systems, we want to help you get the most out of the one best suited to meet your distinct needs as a wholesale distributor. Here are 10 proven tips that do exactly that.

1. Clarify your business goals

Your ERP system is simply a tool to help you meet your business goals.

So sit with your team to clarify where your wholesale distribution business should go in the next three to five years. Define and quantify what success looks like. What goals will you meet?

Use SMART goals as a framework for efficient goal-setting. SMART stands for Specific, Measurable, Achievable, Realistic, and Time-bound. The following table describes the framework for SMART goals.

2. To ensure your ERP system objectives align with business goals, consult ERP vendors

Once your leadership team is clear on your business goals, decide which areas of your operation require the most attention to achieve the goals. Address these areas of poor performance first when you define the requirements of your ERP system.

For example:

• Is scaling your business making inventory and warehouse management a daily frantic struggle?
• Does your accounting team have the necessary toolsto manage and forecast your financial needs efficiently?
• Is the company able to integrate business tools that would amplify the capabilities of your team?

Once you have a list of key features and functions for your ERP system, research the Internet to understand what options are available. Talk with ERP vendors and ask for personalized demos.

Remember, there’s no need to reinvent the wheel.

So short-list vendors who have experience and expertise in wholesale distribution. You’ll be glad to learn that top-tier, battle-tested software that serves the needs of small and medium-sized wholesale distributors is easily available.

3. Customize the ERP system to your needs

You have two options in ERP systems.

You can invest in generic software that requires major investment in customizations to meet your needs.

Or, you can choose an ERP system that’s the fine-tuned result of years of collaboration between savvy developers and thriving wholesale distributors.

If you choose the latter, keep in mind that, just like a nicely fitting garment you buy, it may need minor alterations for a perfect fit. Well-designed ERP systems take that fit factor into account.

They offer customization and configuration options so you can align the system to your workflows, business rules, reporting needs, and third-party systems. For example, some ERP software provides no-code features that enable anyone without any coding experience to make minor customizations.

By adapting your ERP to the way your team works, you’ll enhance their user experience and the chances of their using the system to its full capabilities.

4. Keep your team well-trained to get the most out of your system after ERP implementation

You don’t want your investment in an ERP system to become like the home gym equipment that now serves as extra hanging space for clothing.

After the employee training sessions of the initial implementation period, ensure that your team has easy access to support from either power users or your ERP vendor. Otherwise, frustrated employees may resort to manual workarounds that will defeat your productivity goals.

As new capabilities become available in software updates, show your team how to take advantage of them. Invite your ERP consultant or vendor to share the latest best practices.

Through recurring investment in the training and support of your team, you ensure a consistently growing ROI on your ERP investment.

5. Connect with your business ecosystem to enhance productivity

No business is an island.

To help you achieve your efficiency goals, your ERP system needs to seamlessly integrate with your other business systems (e.g., CRM, e-commerce, transportation management systems) as well as the companies that are important to you: customers, suppliers, and contractors.

For example, connecting to your suppliers via EDI (Electronic Data Interchange) enables them to be instantly aware of your component needs. At the same time, you can instantly retrieve the shipment data they’ve transmitted. This electronic exchange eliminates all paperwork for the sender and receiver, and reduces the risk of error that comes with multiple manual data entries.

Furthermore, you improve the monitoring of pricing and quantity errors, and can respond faster when there are errors. This speed and clarity improve communication and support greater mutual satisfaction in the business relationship.

Similarly, you gain the same advantages when you’re connected with your customers. Through your ERP system, you can also offer customers a private portal to view in real time their order status, invoices, and purchase history. This improved communication benefits all parties.

6. Take advantage of reporting and analytics to make better decisions faster

Your fast-paced business demands quick decisions.

Using your ERP’s real-time KPI dashboards, customizable reports, and insights from analytics, you can do the following:

• Stay on top of KPIs linked to your business goals in real time, so you know exactly how you’re progressing toward these goals.
• Observe patterns, through analytics or your reporting, that may represent opportunities for growth or improvement.
• Act proactively based on these insights.
• Export your ERP data to third-party business intelligence software to further analyze and visualize your company’s vital signs.

7. Elevate your inventory management to reduce costs

Stockouts, overstocks, and carrying costs can seriously leach your profitability as a wholesale distributor. Fortunately, your ERP system’s inventory management module can make a major contribution to decreasing the risk of these costs.

No matter how fast your stock is moving in and out of your multiple locations or e-commerce function, your ERP gives you complete real-time visibility into your inventory.

To help you manage stock levels when you reach pre-set minimum thresholds, you can program your ERP to issue purchase orders automatically.

Moreover, your ERP’s centralized integration of sales, purchasing, and inventory enables your ERP’s forecasting module to produce various scenarios to evaluate. When you enter different variables, the module delivers a range of data-based outcomes to help you make decisions as market conditions shift.

8. Track sales orders to enhance customer satisfaction

To sustain growth, you need to satisfy an increasing number of customers. In support of this goal, your ERP system’s order management functions enable you to do the following:

• Automate multiple elements of order entry to minimize the chances of error. Once an order is entered, nobody else needs to re-enter it.
• Track the order’s progress through your operation in real time. As a result, your operations team knows exactly the status of the order and what obstacles may be slowing it down. They can then make quick proactive decisions to optimize order fulfillment.
• Respond instantly to customer queries. If your CRM is integrated with your ERP, access to the customer’s profile will reveal a complete picture of that customer’s current and past dealings with your business. This context allows your customer support team to respond to queries with the big picture in mind.
• Offer your customer a portal into the ERP system. This access gives customers an effortless independent way to check on their order status and invoices.

9. Streamline your logistics and distribution

Logistics and distribution is an important part of your business. Through your ERP system, you can manage your entire supply chain, from the buying of raw materials to the shipping and exporting of products.

For example, the visibility you gain through your ERP empowers you to track your purchase orders just as you did with sales orders, and keep tabs on how your suppliers are performing.

You can analyze shipping times, delivery performance, and workforce hours in real time. From the data-based analysis of these and other related costs, you can easily monitor weak or strong areas of performance in your supply chain.

Furthermore, armed with these insights, you can enter discussions with your suppliers to lower costs and streamline your logistics.

10. Upgrade your ERP regularly

Because technology evolves quickly, your ERP needs to stay up-to-date on new features so you can pursue your business goals with new capabilities.

By checking in regularly with your ERP vendor or consultant, you can stay informed on upcoming system updates or upgrades as well as industry best practices.

This regular contact ensures your wholesale distribution business stays on track for improved profitability and a satisfying return on your ERP investment.

Want to learn more about how to get more out of your ERP system for your wholesale distribution business?

We’d be happy to answer your questions or arrange a personalized demo.