For a business to achieve success, effective management of inventory and distribution channels is necessary. Meeting the requirements of deliveries, costs, and balancing supply and demand proves to be tedious for a lot of companies. The use of ERP systems can provide the necessary tools to streamline these gaps between supply and demand. Let us explore why ERP systems have such a high ROI when it comes to inventory and distribution management.
Inventory Management with ERP
In ERP systems, there is an improvement in the positioning of inventory. Instead of relying on a person to keep track of where inventory rests, ERP systems automate the functionality. This improvement increases access speed to stock, which improves the operations accuracy and inventory placement as well. Time taken to locate stocks drastically decreases, minimizing the complexity of processes.
Faster retrieval of products from large warehouses and their delivery time has been the greatest advantage for companies using ERP systems. Transport costs and stock retrieval time drop while customer satisfaction and fulfillment rates peak.
Accurate FIFO (First In, First Out):
With the use of ERP Systems, perish able goods can easily be maintained. Repurposing old products becomes easy with the FIFO principle, reducing loss and solving spoilage issues. Freshness and the overall quality of products can be greatly maintained.
Available To Promise:
Stock levels are monitored to visibility of stock can be promised to customers. This is useful for managing customer expectations, enhancing service delivery.
Managing Products About to Expire:
It allows setting safety and expiration dates on products thus helping in loss mitigation by enabling discounts on what is about to expire.
Tracking Over-Timed Products:
Daily reports are issued on products which have been in stock for too long. This enables the business to respond to such information quickly and reduce potential overstocking losses.
Proactive Alerts:
Alert on discrepancy is sent when inventory audit is conducted on stock levels. This reduces the likelihood of business problems created by inaccurate inventory audits.
Optimized Space Utilization:
Proper organization of inventory enables businesses to better utilize storage spaces. Space has been turned from a liability to an asset by using headroom for storage.
Management of Distribution Channels is ERP related
Possessing Real-time Order Taking Capability:
With the help of a dedicated distributor panel, distributors can place real-time orders accurately. The system tracks the order status and provides timely updates for more coordination.
Demand Predictions Tools Accuracy:
ERP systems allow for accurate planning of orders by analyzing the projected real-time demand, ensuring consumer needs are met without unnecessary oversupply or shortages.
Monitoring Entire Distribution Network:
The C&F agents, distributors, dealers, and retailers database is accessible via ERP’s distribution network management module, which is vital to any company looking to grow or improve its supply chain.
Learning About The Customers:
ERP systems allow for tracking customer data which also helps in collecting feedback that assists the business in improving products and services, hence increasing overall customer satisfaction.
Sales Team Control:
Business owners can track all of their sales force operating in the field in real time. this allows to capture, analyze, and leverage data to ensure that set sales goals and targets are achieved as well as the customers are served in a timely manner.
Viewing Network Performance:
Owners of businesses gain access to accurate reports on the financial performance of distribution networks, which help them evaluate the profitability and provides adequate reasons for the changes of their distribution strategies.
Controlled Prices:
Effective Pricing Strategies With the right data available at their disposal ERP systems allow businesses to set product prices with much ease. This flexibility means that the company’s growth and brand value can be improved with precise pricing strategies.
Summary:
Firms are able to save money and foster growth by integrating ERP systems into their inventory management and distribution systems. With ERP, usage of resources is streamlined because data is available instantly, there is less lag, decisions are better, and profit is maximized. There is no question that ERP has significant operational benefits, but for optimizing customer satisfaction, resource use, and achieving business growth, firms who utilize ERP are more successful.
Enterprise Resource Planning (ERP)
