Entrepreneurs are increasingly investing in new technologies supporting business management. According to Eurostat, the digitization rates of European enterprises have increased significantly over recent years. ERP (enterprise resource planning) systems in storage and distribution are becoming very popular.
In 2010, less than 21 percent of large companies benefited from ERP solutions, in 2015 this ratio increased to 36 percent. Statistics also confirm that the implementation of a company support system is not always a success. According to a study conducted by Software Advice (Gartner), as much as 54 percent of companies want to replace their ERP system with another one. Why? There are many reasons, but they all boil down to one basic – no visible benefits of implementation. In order not to make this mistake, every entrepreneur should try to answer the key question before making a decision about choosing a specific solution: what ERP system will bring real profit for my organization?
Customer service
In trade, distribution, or broadly understood logistics, quick and efficient customer service is particularly important. If such processes as checking the price or the availability and delivery of goods to the site run quickly and without problems, the company gains regular contractors and performs more transactions, which in turn, increase its profitability.
The ERP software is an indispensable tool for streamlining these processes. This type of system should be coordinated with warehouses and other logistic objects of the company (i.e. terminals). Thanks to this, the employee at the customer’s request can easily find the product in the ERP system and check its price, availability or delivery time. Do not forget that the company’s showcase is its sales representatives who should be equipped with modern tools for work (tablets, smartphones) to quickly and efficiently present offers, promotions and collect orders. In the implementation of these tasks, the SFA (Sales Force Automation) mobile application will be coordinated with ERP.
The challenge for many commercial and distribution companies is the service of high storage warehouses, mainly surface optimization. It is she who decides about the operating costs of the warehouse.
Optimizing warehouse space
ERP software also helps in optimizing warehouse space. Modern systems are coordinated with mobile storage applications, where employees regularly update the number of individual goods and their location on the shelves. On this basis, historical warehouse states are created, thanks to which it is possible to perform a detailed sales analysis and regular replenishment of minimum states. The analysis helps to detect errors in the functioning of the warehouse and to introduce changes that increase efficiency.
Paperless document management
Efficient circulation of documents between a commercial and distribution company and its contractors speeds up payment processes and positively affects the company’s profitability. The fastest exchange of documents is carried out electronically. And in this case, the tool facilitating and accelerating the circulation of orders and invoices is the so-called EDI (Electronic Data Interchange) platform.
The purpose of EDI is to eliminate multiple data entries, i.e. on multi-page invoices. The platform has built-in formulas and indexes that make it possible to generate and send the right document in just a few minutes. This is a great convenience for companies issuing invoices.
Entrepreneurs conducting trade and distribution activities should choose ERP software that is compatible with the EDI platform. In this way, they will improve the exchange of documents with their contractors and increase the profitability of the company. Thanks to tis ccordination you can automatically create warehouse acceptance documents, order/sales invoices and purchase invoices „- says Tomasz Dobrzański (Unit4 Poland).
ERP software should also ensure efficient handling of settlements and factoring from sales and purchase. Trade and distribution companies using the services of the factor must provide him with sales specifications in a given week on a regular basis. A properly selected ERP system speeds up this process thanks to ready-made formulas enabling quick generation of a sales report in an electronic form and sending this information directly to the factor.
High-class ERP software also has the function of cashflow forecasting. Such an analysis is useful for maintaining financial liquidity because it shows the ratio of sales invoices to purchase invoices, thanks to which an entrepreneur can control expenses and credit limits of his contractors. If the buyer is indebted, the ERP system informs about it and the company may suspend the sale until the debtor has paid the outstanding invoices. Some ERP systems have a very extensive control of credit limits.
Multi-company credit limit control means that if the buyer has exceeded the limit and his company is part of one capital group, all subsidiaries belonging to this company may be covered by this limit”- emphasizes T. Dobrzański.