Life isn’t a game show. What lies behind the locked door isn’t a mystery. It’s the equipment to improve efficiency for your business so you can take your company to the next level. All you need is the key.
We’re giving you the key: Inventory management improvement.
A 2017 study from Mint Jutras found that fewer than 60% of companies in the wholesale distribution space used full-scale, integrated solutions like enterprise resource planning (ERP) software to manage mission-critical operations.
The same study found that the top 20% of ERP implementations led to a 24% reduction in inventory costs. The rest of these implementations also performed very well, achieving a 13% decrease in those expenses.
The message is simple: A successful ERP implementation can mean lowering your spend on inventory, and a successful implementation starts with clear objectives.
The better your goals are defined across your supply chain when you begin shopping for an ERP and a solution partner, the more likely you are to achieve a highly successful outcome.
At Fusion5, we want to help you identify your pain points and determine the solution that will address those specific needs in the most effective way. We know that every organisation is unique and that your objectives are tailored to your business model.
Today, we’re taking a broad look at inventory management needs in the wholesale distribution sector, and we’ll explore how NetSuite, one of the most popular options, can help you improve efficiency and streamline operations.
But why do you need an edge?
If you’re used to simply getting by with disconnected operations tracked on siloed spreadsheets instead of using a fully integrated solution that delivers enterprise-wide visibility, you may think you’ve already got the edge. Your customers are happy, and they keep coming back, so what should you worry about?
Think about it this way: How much unnecessary administrative burden — like simple data entry — does your wholesale distribution company take on due to outdated processes? If the answer is more than zero, then you have an opportunity to improve your margins over today’s baseline performance.
If your wholesale distribution company manages multiple warehouse locations, how often do you wind up overstocked in one area but lacking inventory at another location? Is this issue ever the result of counterproductive internal competition or human error, with redundant work taking place across separate sites?
Unless you answered ‘never’ and ‘absolutely not’ to those questions, you’re probably missing out on a golden opportunity to streamline essential functions at your business.
You’ve outgrown old processes.
These days, it seems like everybody’s talking about scalability. No matter the B2B solution you purchase, you want it to grow with you instead of just working for now and holding you back after you expand.
The truth of the matter is that a lot of businesses scale their operations to meet rising demand and then retrofit their processes and workflows to accommodate the changes..
For other businesses, they’ve managed to maintain a high level of success using legacy solutions, so they’re not even aware of how much more they could accomplish by using the latest technology.
Two important underlying functions that enable effective inventory management are:
- Sales and operations planning (S&OP): The same Mint Jutras study found that just 34% of the distributors they contacted had sufficient ERP support for S&OP functions like forecasting and demand planning.
- Supply chain planning and management (SCM): The researchers also found that less than half of the distribution companies they surveyed felt that their ERP software facilitated adequate SCM capabilities.
Put together, that means there’s a whole lot of wholesale distribution companies using enterprise resource planning software that doesn’t do enough to help them figure out what their customers will need and when the company can get it to them.
Put simply, they have an inventory management capacity that’s at least a size too small for today’s climate.
It’s time to get fitted for the new world in which we live.
What's NetSuite got to do with it?
Like we’ve said before, the process of finding and implementing the right ERP system for your needs is all about the journey. To get started in the right direction, it definitely helps to know where you’re going.
NetSuite might just be the ERP software that’s waiting around the corner for your wholesale distribution company. Let’s take a look at some of its features:
- Automated replenishment: NetSuite is able to manage inventory for single-site operations or wholesale distributors that have warehouses in multiple locations. By analysing relevant data and inputs, the system can tackle warehouse stock volume requirements, integrate lead times and establish reorder point suggestions.
- More accurate item counts: The Inventory Count feature provides users with the ability to sort and categorise items by amount, price or other variables and to set up automatic prompts for periodic counting. This gives you a better sense of what you have on hand, improving your ability to replenish only as needed and providing greater insight into key metrics like inventory turnover.
- Enhanced inventory tracing: By lot or serial number, NetSuite enables users to follow all transactions throughout an item’s lifecycle.
- Granular and wide-angle views: With a hierarchical structure, NetSuite allows users to track inventory in the aggregate across several locations or zoom in to examine inventory in specific bins or other defined sub-locations.
Perhaps most importantly, NetSuite also integrates robust sales order management and supply chain management functions, enabling seamless communication between inventory management and associated business operations.
Bringing it back around: Why inventory management matters, and how the best ERP system can help you get there.
Switching to a cloud-native ERP can be beneficial for businesses that operate at every point on the supply chain. Because of NetSuite’s experience in the wholesale distribution sector, they have discovered what works and what doesn’t. They know that accounting for warehouse stock and other inventory management processes can be essential for improving margins, monitoring inventory turnover, anticipating demand, increasing visibility and enabling businesses to refocus on their core competencies.
At a broad level, some of the key benefits of ERP software like NetSuite include:
- Integration and transparency: The system knits together customers, inventory and orders into a centralised, integrated and up-to-date platform.
- Streamlining and automation: As data points are integrated and functions are automated, tasks can be offloaded from human completion, improving accuracy, transparency and operational efficiency.
- Analysis and reporting: Since they now have a reduced workload and better insight into their operations, business leaders are empowered to interpret data from the ERP system and create competitive insights.
Let’s explore your options
If you’re ready to get started on the road to better inventory management, and more efficient wholesale distribution operations overall, work with us to discover the right ERP system for you. If you need help assessing if an ERP is what your company needs, we've made it easy with our Navigating Change Checklist, or you can get in touch through the form below.
