ERP systems have become instrumental in a distribution company’s drive for maximizing process efficiencies despite increased competition.
Because logistics and inventory management remain among the biggest challenges for distributors, it’s important to understand the solutions available that can help improve the flow of materials through the internal business ecosystem.
Logistics are typically separated into two distinct categories: inbound logistics and outbound logistics. Effective logistics management demands a robust inventory management system.
Enterprise Resource Planning (ERP)
ERP systems function by pulling all business data from its disparate pipelines under the same umbrella, granting authorized users access to all data from a single dashboard. ERP excels at inventory tracking, logistics and supply chain management, financial data organization, process tracking, personnel management, and more.
Inbound Logistics and ERP
Inbound logistics are the business processes that includes purchasing and shipping materials from vendors to your place of business. Receiving materials from vendors is often one of the most expensive components of logistics for distributors.
While companies can control their own shipping costs by batching outgoing orders and selecting shipping methods that make the most financial sense for their workflows, the same cannot be true for inbound shipments.
ERP systems help streamline some of the unnecessarily costly components of this process by enabling users to automate receiving processes to save money on in-house working hours. ERP’s innate tracking capabilities can simplify overdue or incomplete orders making it more seamless when responding to the receiving team.
Users can set up alerts for order arrivals, immediately alerting them to orders that arrive past their expected date. Similarly, scanning in received materials automatically compares materials received versus ordered, generating data on any missing (or surplus) items.
ERP’s process tracking and management capabilities allow businesses to set their standard practices for quality assurance processes like inspection and return routines.
By setting the standard for these processes within the ERP system, users remove the uncertainty for all personnel regarding what to do in the event of any given situation arising, ultimately saving time and money on these inevitable headaches of logistics.
Outbound Logistics and ERP
The most important single element of outbound logistics is having strong inventory management to keep materials organized and readily accessible for distribution. Having the appropriate materials out on time and to the correct recipient starts with efficiently managing one’s inventory.
There are many components to getting a customer or client’s order exactly right, and the integration of all business data inherent to ERP vastly simplifies the process to check all the boxes necessary to make it happen.
ERP’s automation helps to streamline order fulfillment further by automatically directing work orders to the correct departments at the correct times. Upon authorizing an order, the system generates a fulfillment order to the inventory team to pull, inspect, pack, and ship orders that come through the system.
The right ERP system will also give users the ability to automatically generate shipping labels and place pickup orders with their shipping partners. At the same time, the system generates an order for financial professionals to begin the billing process.
All of these processes, which in the worst cases are all performed and tracked manually, can now be administered through a unified system encompassing all other business processes as well – in the end making it simple to automate and streamline to save money for the company.