Is ERP important in a distribution industry?

What are the functions of ERP in the distribution industry?

First, it should be said that ERP is a tool that, in general, can perform numerous functions within a company. If you don't yet know what ERP is, we encourage you to first consult what an enterprise resource planning system is.

In the value chain of a business, it can offer its capabilities not only to the manufacturing side, but beyond that it can also be of great help to sales and marketing departments, as well as distribution departments, as we will explain below. Among all these areas, sales management is essential.

To summarise, it can be said that it can service all these departments through technologies such as the Internet of Things. However, we will also add that in the specific case of distribution, process automation and stock control is the most important part of ERP.

Specific aspects offered by ERP for the distribution industry

We will now discuss specific points where ERP can be of help to the distribution industry.

1.- Supply chain management

In specific relation to distribution, ERP can help manage all the supply chain planning processes. This is comprised of the supply, planning, return and distribution of products.

This means that ERP in the distribution industry can offer effective management of everything that enters the distribution chain for the production or service of your business, as well as everything that is involved throughout the entire manufacturing or distribution process.

This control applies from the time of entry into the business to the time when it is delivered to the customer. That said: we should also mention that it actually goes further and also applies to the after-sales period. Another crucial time for a business in which a customer continues to be managed, albeit at another level. We would like to recall that ERP is a modular technology. This lets you design specific software for your business. As a result, there is a wide typology of ERP modules that we encourage you to find out about with SEIDOR.

2.- Stock control

ERP in the distribution industry is responsible for controlling the amount of stock a business has in its warehouse. With it, you will be able to control your stock and product traceability. This particular area would not be exclusively related to production and distribution tasks as with the previous point, but would be related to stocking for future sales.

With this, you can see the levels of reserves you have for new orders; at the same time, it is a very interesting tool for implementing more efficient resource management systems such as just in time, which enables you to optimise product management and stocking costs as far as possible.

4.- Procurement through ERP in the distribution industry

As we have said, ERP in the distribution industry is related to the entire value chain, right from supply. However, you should know that it is related to procurement in general, including any purchases that the company or business requires for its own operation and that are not necessarily linked to production.

5.- Customer management

Thirdly, we should say that ERP in the distribution industry is a fundamental tool for centralising all customer information and making it available on a single platform. Using this, you can get all the relevant data on them at a glance, at any time and any location as cloud access is provided. This point of customer management or CRM is very important for marketing campaigns as well as for all commercial business.

6.- Reporting

Report management is another point where ERP can be crucial for the distribution industry. The large volumes of information now generated mean that a programme that can manage it efficiently is required.

With ERP, you will be able to have all the reports generated by your business available on a single platform to make them visible and accessible.

7.- International and relations with other partners

Another important point is internationalisation and relations with other business partners. In fact, an internationalisation or sales process in another country can be extremely complex: consequently, ERP in the distribution industry can be a very important tool for managing it easily and effectively.

Likewise, relations with other partners such as suppliers, carriers and intermediaries make it necessary to use distribution ERP.

What are the benefits of distribution ERP?

At SEIDOR, we would also like to discuss the benefits of distribution ERP. These are the advantages into which all the functions we have talked about so far are translated.

1.- Better customer service

The ability to automate processes and to improve the delivery of orders, their preparation and stock control in general result in a better service for the customer. Among other things, because the delivery time and quality are improved.

2.- Increased profitability

The second important area of distribution ERP is to improve the management of sales and purchases that go out and enter your business, respectively. Your company's costs are more and better controlled; this will lead to an increase in the profit margins of the commercial operations carried out.

3.- Improved decision-making

Thanks to the increase and improvement in the information available, it is possible to improve the quality the decisions made. Up-to-date information is available on each of the departments, therefore, it is possible to make choices with a more accurate outlook about what is happening and what can be predicted about the future.

We hope that these points have helped you decide to implement distribution ERP in your company. At SEIDOR, we can offer you customised solutions to organise a company with ERP: with solutions adapted according to the modules required for the best operation.