The Advantages of Adding Distribution Software to Your Company
Distribution software adds several advantages to your company. These advantages translate into opportunities: opportunities to improve customer service, boost efficiencies, increase sales.
Whether you have an ERP system now and seek to improve your distribution management, or you’re considering an ERP and want to be sure that it adds distribution software to the suite of applications that you are using, understanding the advantages of adding distribution software to your company via an ERP system is an excellent step along the process of improving your business.
Grab Your Free Distributor’s Guide Now!
Before getting into the nitty-gritty of distribution software, grab your copy of Distributor’s Guide to Improving Profits. In it, you’ll find plenty of tips, tricks of the trade, and information to help you improve inventory management and distribution.
What Is Distribution Software?
First, let’s define distribution software. Distribution software manages every aspect of the process of moving goods from one place to another. It helps you manage every aspect of the process, including inventory control, accounting, finance, sales, and customer relationships.
Distribution software typically runs on cloud-based servers so it can connect multiple locations, seamlessly. This means if you have a warehouse in Illinois, a distribution center in Texas, and an office in California, the data accessed through the cloud reflects precisely what is going on in each location, and every area displays the same information. Your call center in California knows what’s in the warehouse in Illinois and can affirm if items are in stock during a customer call.
Five Advantages of Distribution Software
Maximizing advantages leads to more significant market share and potentially higher profits. The more you take advantage of tools like distribution software, the better advantage you’ll have over competitors who are unable or unwilling to add such software to their companies.
The following reflects only a smattering of advantages of distribution software. But with just these five advantages, you can make excellent progress towards your business goals
#1 Better visibility into all areas of your business
There’s an old saying that if you can’t see it, you can’t measure it, and if you can’t measure it, you can’t fix it. Distribution software lets you see problems, measure their impact, and fix them. It starts with greater visibility.
Using cloud-based distribution software, you’ll be able to see at a glance all areas of your company. Because distribution involves many “moving parts,” including goods on order, goods received, and products in transit, critical areas to monitor include suppliers, sales, and inventory. Through distribution software, you can track each of these areas or view them as a comprehensive whole.
Thanks to such a comprehensive supply chain view, you’ll also be able to see bottlenecks in the system. Whether it’s a slow supplier, problems on the loading dock, or weather-related delays, any issues in the distribution system become apparent once you can see all areas of the company’s business.
#2 Warehouse management improvements
Another area in which distribution software can help your company improve is the field of warehouse management. Inventory represents a significant asset to your company. Inventory management and control becomes easier when you can see every aspect of it.
WIth distribution software, you’ll be able to see stock counts, especially if inventory management software such as barcode scanners are used for logging items into and out of stock. Working with your warehouse manager, you can optimize floor and shelf space to maximize the square footage of your warehouse.
Additionally, distribution software provides information on shipments, so you’ll be able to see how quickly your teams move items from order to shipping. The data is captured within the software, and reports enable you to create and set benchmarks for improvement.
#3 Planning and forecasting
Alongside improved warehouse management is better planning and forecasting. Planning and forecasting inventory needs is an art and a science. Good salespeople and managers know their customers and the business cycles driving your industry. Data from distribution software provides the scientific base upon which to plan, forecast, and budget for new inventory and inventory replenishment.
Planning and forecasting also including planning for personnel to work during peak periods, such as the holidays in a retail business, as well as budget planning and sales forecasting for cash flow and financial management needs. Distribution software provides reports and tools to help you keep the information you use often right at your fingertips.
#4 Accurate reports
Companies working off manual counts and spreadsheets know that one small mistake can lead to significant errors. Online retailer Red Envelope knows the pain of spreadsheet mistakes firsthand. The company misrecorded one digit in a cell on a spreadsheet, which led to poor forecasts and the ouster of the CFO.
Spreadsheet errors can be challenging to find and even harder to correct. It’s unknown how much they cost businesses, but if online tales can be believed, some have lost millions due to simple formula mistakes or formatting errors.
Distribution software eliminated the spreadsheet and its attendant errors. The system draws raw data from its sources and provides calculations, graphs, and other data visualizations for you. You’ll never need to remember complicated formulas again.
Enhanced accuracy in reports your management team counts on also enables them to make better decisions. With real-time, accurate data and clear visibility into all areas of the company, managers can predict risks and manage around them more easily.
#5 Quality management improves
Defects in product workmanship or shipping delays may cause customers to complain or defect to the competitor. By using distribution software, you’ll be able to make quality improvements that improve products, shipping speed, and many other areas of your company.
Distribution software can track each component and part of an order along every step in the supply chain. This makes it easier to track down the manufacturer of a single item if it should have a quality defect. Alarms can be set in the system to alert managers if a problem or fault occurs more than once.
The result is better products, higher quality, fewer defects, and less money lost to discarded or returned products. Quality improvements lead to bigger wins companywide, including customer loyalty and repeat business, fewer losses, and a better reputation.
True Cloud Systems Offer More Benefits
Many of the benefits described here rely upon “true cloud” distribution and ERP software. In the early rush of software makers pushing products to the web, some adapted existing site-based applications to the internet by making specialized interface programs that enabled clients to tape into hosted versions of their product.
Unlike true cloud systems, these systems require specialized software for access. This limits your ability to use them on the road or in multiple locations unless each device used to connect to the software downloads and runs the interface application. That’s challenging, especially if you have field sales personnel who travel substantial distances to client appointments. They don’t want to lug a heavy laptop around with them, but older distribution ERP software may not run on small, portable devices such as cell phones or tablets.
Sorting Fakes From Friends: How to Identify True Cloud Distribution Systems
Sorting the fake cloud from the real cloud is relatively easy once you realize the differences between the two. Look for the following when considering true cloud distribution software:
- Fully functional on every device, including mobile phones, laptops, and tablets
- Integrates apps, spreadsheets, and typical applications
- Enables personalization of dashboards and other features by the user to customize the experience
- Built according to current standards
- Made with expected programs (nothing proprietary or so unusual it requires a custom programmer each year to integrate it, for example)
- Ability to pay by resource usage, not only by the user
- Industry-standard security
- Easy upgrades
One of the litmus tests used to differentiate true from fake cloud systems is the API test. Look at how the system can connect to other programs you currently run. A true cloud distribution system should easily connect with your current applications so there’s little work on your part to make them “talk” to each other and share data.
Older programs pushed onto the internet sometimes retain what is called “brittle” APIs. These APIs require unique programs to work with other programs and mainly work with other software packages made by the distribution software manufacturer. By using these APIs, the software maker retains ultimate control over what runs with their product. That helps their bottom line but hurts your productivity.
Acumatica – True Cloud ERP Distribution Software
Acumatica offers true cloud ERP and distribution software. It’s a PC Magazine Editor’s Choice system and one that has won many awards. It’s also earned the respect and loyalty of business owners worldwide who rely on its reliable, easy to use interface for the data they need to manage their businesses.
It’s easy to add third-party applications and customize Acumatica to your needs. Acumatica lets you pay as you go or purchase a subscription, so you have a choice in how you budget for the software.
Learn more in this white paper provided by Acumatica: True Cloud vs. Fake Cloud: How Companies Can Tell the Difference in Distribution
There are many distribution software packages on the market. With so many advantages found in the right software, it’s essential to take your time and explore your options. If you’re considering adding distribution and ERP software or upgrading your software, please contact Mindover Software, 512-990-3994. We’d be delighted to set up a consultation to discuss software choices that can help your business grow.