Well handled distributors understand the importance of costs and keeping them low.

In doing so, they also are able to achieve control over sales growth, expenses, as well as their assets.  In order to control business activities, you need to be able to see and measure them first.  A distribution-based enterprise resource planning (ERP) solution can give you the insight and the control you need to know your costs, keep expenses low, and boost profit margins.

Sage 100 ERP (MAS 90/200) is a popular, comprehensive ERP solution that manages all of the critical business operations that distributors need to control, including finances, supply chain, manufacturing, inventory, payroll and human resources issues, and other important activities.  You can also use electronic data interface (EDI) features that are often important to big box companies, online bill pay and banking, and integrated ERP with customer relationship management (CRM) solution.  A single software solution will make it easier for your team of employees to enter the important data you need to review, in real time, in order to make important financial decisions.

Once you have all your important business data in a single ERP solution, you begin to make sense of how your operations affect each other.  For example, you can review historical customer data and watch for trends in the products that they buy.  You may notice seasonal fluctuations, product preferences, and when they place replenishment orders.  All of this information is valuable when managing inventory levels.  Once you know what inventory you need to have on hand to satisfy customer orders, you can establish inventory levels, with appropriate safety buffers, so that you don’t over-buy inventory or run out right before the next big replenishment order.  As a result, you can work with suppliers to make bulk purchases, when possible, which could save money on the inventory items you purchase, and order in advance to save money from making rush deliveries.

Using real-time financial information will also make it easier to identify the true costs of your operations and the products that you offer customers.  You may find that you can offer economies of scale for certain products, but not everything.  You may also find that you are undercharging for certain products or services and can give your profit margins a little more wiggle room by finding more accurate pricing options.  The key to managing costs and leveraging profit margins is in the ERP solution.  With the right solution you can control activities, manage costs, and leverage insight to improve productivity, profitability, and drive growth.  Contact DWD Technology Group for more information about ERP solutions that may be right for your distribution business.  We offer a free software needs assessment valued at $250.

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