Two people in a warehouse.

Managing credit terms with suppliers in your distribution business

By | Acumatica Cloud ERP, Distribution / Supply Chain, ERP | No Comments
Two people in a warehouse.

Securing trade credit from your suppliers helps your distribution business maintain positive cash flow and great vendor relationships.

Credit management is a sound investment for any business, no matter where they are in the supply chain.

In distribution, offering credit to suppliers gives them financial flexibility to make money, which in turn allows your business to earn more profits. The same goes for your business when seeking credit from your own vendors and suppliers.

Business credit comes with risks and opportunities. It also means having the right distribution business software for managing credit with suppliers in your distribution business as part of a bigger picture in vendor or customer management.

The pros and cons of trade credit

Trade credit is a business-to-business agreement that allows for the purchase of goods and services without paying cash up front. Typically, these agreements allow suppliers to pay 30, 60 or 90 days after an invoice is issued. It’s a way for suppliers to finance purchases on credit by deferring payment, often to account for cash flow variances.

Here are some of the core advantages for distributors:

  • Better Cash Flow. Pay your suppliers after you’ve sold your goods, reducing your risk and allowing you to ride periods of financial instability
  • Ensure Supply. You can reduce the risk of not having a regular supply of goods if demand spikes by conserving cash flow and having access to sought-after goods
  • Better Insights. Suppliers are more likely to provide you with market information on trends related to your products if they are relying on you to pay on future sales
  • Improved Creditworthiness. By demonstrating reliable payback patterns, you raise your creditworthiness with vendors and have good credit references

On the other side, trade credit does carry some risk. Penalties can be steep if you miss repayment times. This can hurt your credit rating down the road. And if cash flow becomes an issue due to declining sales, you can find yourself in a deep hole.

Woman wearing a yellow hard hat and reflective vest while holding a clipboard.

Trade credits can be beneficial to all parties in the distribution business if managed well with the right ERP solution.

Managing distribution trade credits

With Acumatica’s enterprise resource planning (ERP) software, your accounts payable operation gains access to shared data, customizable tools and integrated management of cash flow and credit. It’s the distribution ERP that helps your business manage money and relationships.

Among the core features in Acumatica’s distribution ERP accounts payable software are solutions that ensure invoices are paid and vendor relationships are strong. It’s all accessible via the cloud and a connected web browser.

Top Acumatica accounts payable features include:

  • Vendor Prepayments
  • Prepaid Expense Recognition
  • Automated Approval and Payment
  • Automated Use Tax, Withholding Tax and VAT Functions
  • Vendor Payment Processing
  • AP Linking of Vendors to Accounts in the General Ledger
  • Currency Management
  • Automated Recurring Bill Generation
  • Vendor Refund Management
  • AP Aging Reports
  • 1099 Reporting
  • Vendor Account Security
  • Audit Trail Management
  • Source Document Management

With advanced automation solutions, Acumatica offers key advantages to your accounts payable business, including:

  • Streamlined Processes. Approve invoices, create process flows and create optimized workflows that reduce reliance on manual operations
  • Optimized Payments. Prevent late fees and leverage vendor discounts with payments that align to your cash flows
  • Error Reduction. Intuitive user screens allow for productive, efficient and accurate data entry

NexTec works with distributors to select, install and optimize business software. Let NexTec help you find the right distribution ERP that keeps cash flows and vendor relations at peak performance levels.

Ready to learn more? Give Acumatica a try.

Unlocking the power of data in distribution: Don’t get buried by an ever-expanding pool of data

By | Acumatica Cloud ERP, Distribution / Supply Chain | No Comments
data in distribution

When distribution data is managed and understood, it can benefit your company, improve your relationships, and facilitate growth. But what goes into making your data work for you?

Winter is here, which for some means snow. Break out the snowplows, shovels, and snow blowers; snow happens, and you can’t just wait for it to melt—at least if you hope to go anywhere.

For distribution firms, snow is bad enough, creating logistical nightmares in its wake. Luckily, snow melts. Unmanaged data, on the other hand, just keeps building up.

Left unchecked, this ever-expanding pool of data can become unwieldly, slowing your business down and hurting your ability to serve customers. As the data stacks up at your business, the competition is heating up outside of it, making it more important than ever to clear up the blind spots, connect the supply chain, and work smarter than ever.

That said, when distribution data is managed and understood, it can benefit your company, improve your relationships, and facilitate growth. But what goes into making your data work for you?

You can’t measure what you can’t see. Common challenges holding distributors back.

For many distribution firms, the first challenge in overcoming their data challenges is to know just how tall the ‘snow pile’ is. Businesses lose sight of inventory and processes for a variety of reasons, but the most likely culprits are manual processes and disconnected systems.

Paper, spreadsheets, and email

Overreliance on paper, spreadsheets, and email isn’t only slow, it creates a blind spot for distribution businesses. For those looking to improve their ability to track data, the first place to look is the file folder. Why? Because you shouldn’t be relying on one.

A surprising amount of businesses still rely on paper-based processes, printing out paperwork for orders and projects, faxing invoices and checks, scanning data into the system, and hoping they can keep track of it all. This presents a variety of problems.

  • First, it’s expensive and time consuming. Those businesses still relying on outdated processes are paying their staff to waste hours every single week completing tasks they shouldn’t be worrying about.
  • Second, it’s inaccurate. Spreadsheets are breeding grounds for errors, and it’s incredibly easy to make a mistake when hand-keying information into a document. One mistake can set off the entire formula.
  • Third, it’s hard to track. Scanning a document into a computer, routing an email to a warehouse, and hoping the right person saw it is just that—a strategy based on hope.

By eliminating paper and spreadsheets and reducing reliance on email for important processes, you can begin to track how data stacks up at your organization and take steps to control it.

The application hairball

Another challenge that businesses face when trying to make sense of the data they have is something that can best be described as an ‘application hairball,’ a mess of separate products that are tangled together—but still disconnected.

For those in the distribution industry, this is often one of the most pressing issues; data from inventory management exists, data from CRM exists, and data from ERP exists—in three separate places. So where do they turn? Back to spreadsheets and emails.

However, those on the leading edge are able to untangle this mess of applications that can’t talk to each other, connect the processes, and facilitate the management. A distribution-focused ERP can make this happen. To manage their supply chain and logistical activities successfully, distributors should consider implementing a true cloud distribution ERP solution, one that is able to handle their warehouse, inventory, and order management processes while simultaneously connecting these activities with their financials and sales.

Getting from disparate to data-driven: How to start using your distribution data.

Once you get rid of the first challenges, the next step is to start making your data work for you. How? It all starts with knowing what to measure and being able to track what’s happening.

Know what to measure

The ability to make sense of the data you’re generating is one thing—knowing the what, why, and how of this information is another. There’s more to your business than revenue, profit and loss, and cash flow, you should be able to understand how this information came to be.

Key performance indicators, or KPIs, exist to answer this, representing a variety of measurements important to a specific industry designed to unlock the true health of a business and uncover previously unknown opportunities or challenges that traditional reporting measures fail to address.

However, not all KPIs are created equal—some metrics matter more than others, some are easier to track, and others are great for predicting where you will stand a year from now. Learn more about tracking KPIs for business growth here.

Improve your understanding

If you’re in the finance department, charts are your friend. What about the people who didn’t spend their college days learning about GAAP? Even if it makes sense to you, present most people with something unstructured and their eyes will glaze over.

However, by structuring data (including the aforementioned KPIs) and presenting it in a way that’s useful for anyone who needs it, your business can work faster and your people can make smarter decisions.

Distributors that turn to dashboards, analytics, and business intelligence (BI) software integrated with an ERP system and other key internal systems are able to unlock the secret value hidden in their data and make wise choices based on what they learn. Reports that used to take hours are now automatically calculated in real time, helping distributors to improve planning, increase profit margins, and enhance customer relationships.

The right ERP solution for your distribution business.

The right ERP solution for distribution is essential. When you pair this with other necessary applications you will have a solution that can put you on a path that allows you to not just survive, but thrive. NexTec Group consultants have been helping distribution companies select and implement ERP, BI and CRM for a quarter century. If you believe 2020 is the year that you truly take control of your supply chain, let’s talk. We’re here to help.

Supply chain

Overcome distribution and supply chain disruptions with ERP analytics

By | Acumatica Cloud ERP, Distribution / Supply Chain, ERP | No Comments
Man looking at documents on a clipboard.

Enterprise resource planning (ERP) data analytics tools resolve supply chain problems quickly.

Supply chain managers face the continuous threat of disruptive actions that can derail operations at any turn. However, when business leaders integrate enterprise resource planning (ERP) data analytics solutions into supply chain management, problems can be identified early on or eliminated.

Uncertainty and supply chain management

Supply chains are, by their very nature, prone to uncertainty. However, your operation can overcome distribution and supply chain disruptions with ERP analytics.

Let’s consider some of the most common challenges faced in supply chain management:

  • Last-minute changes to customer orders
  • Compliance issues with suppliers or their suppliers
  • Unexpected machine input and output variances
  • Inaccurate measures and tracking of inventory
  • Transportation delays
  • Sudden changes in supplier quality
  • Lack of traceability
  • Poor communication and collaboration among suppliers

While headline-making natural disasters or geopolitical issues get the most attention, usually these more mundane but real day-to-day issues cause the most headaches.

The strength of data analytics

Data analytics help predict and preempt the most common supply chain issues. Forward-thinking companies are turning to data analytics to get ahead of supply chain complexity, simplifying processes, using data effectively and transforming operations.

Data analytics have long been a part of supply chain management. The difference today is that more data are available and trackable; companies can do more with the data they have to develop smarter solutions, often in real-time.

Data analytics are generally bundled into one of three types:

  • Descriptive Analytics. These insights use data to illustrate past performance or behavior. It gives your organization a clear and detailed picture of what has happened. It’s the most foundational and basic type of analysis and plays an important role in planning, strategy development, and decision-making.
  • Predictive Analytics. Data that are collected, organized and reported upon in a coherent manner can help managers make better projections for future behavior. For supply chain leaders, these projections can help forecast events that could be disruptive.
  • Prescriptive Analytics. While the first two categories model data, prescriptive analytics go a step further. They start with a corporate goal and use your predictions, along with rules, real constraints and limitations. These analytics will identify disruptions and help to find a solution.

Collectively, analytics programs provide insights from massive data sets, leveraging the Internet of Things, cloud computing, machine learning, and automation to provide a real-time of your supply chain and related business metrics. They offer insights needed for better decisions in the moment of most crucial need.

Supply chain.

Make better supply chain decisions with real-time ERP dashboards and analytics.

Acumatica and business analytics for your supply chain

At Acumatica, data analytics are a critical component of our ERP solutions. Start with a single version of the truth with a unified data collection and reporting system. Use multiple display options that generate reports for key staff based on role, visual dashboards for KPIs and exports to Excel for use with programs like Power BI.

Acumatica data analytics solutions include:

  • Business intelligence and analytics from data collected from Acumatica and external sources
  • Generic Inquiries, which extracts data and allows for multiple reporting and analytics applications
  • Acumatica Reporting, with access to more than 250 standard reports, and report creation and modification capabilities
  • Acumatica Dashboards, customizable by role, department or person

NexTec helps businesses identify, install and optimize the right ERP solution for their unique needs. Our experts help you leverage supply chain data for better solutions completed more quickly.

Get our short guide to BI and what it can do for your business.

Is your distribution business getting the benefits of a true cloud solution?

By | Acumatica Cloud ERP, Distribution / Supply Chain, ERP | No Comments
distribution true cloud solution

Seamless integration, improved security, and the ability to incorporate emerging technologies are just a few of the benefits companies are getting with true cloud solutions, leading to increased productivity and higher ROI.

Wholesale distribution is a complicated business. An industry in a constant state of change, companies in the distribution industry need to work faster than ever. Understanding inventory, cash flow, and the market as a whole requires the right information at the right time provided to people who can use it—no matter where they may be.

Distribution firms are turning to the cloud. But is it true cloud?

To make this all happen, distributors of all sizes are turning to cloud business management solutions. Designed to increase visibility, provide anytime and anywhere access, and deliver information in real time, the cloud provides companies with the mobility they need to make fast and well-informed decisions.

However, not all clouds are created equal. As with any technological movement, there are always fakes. Many legacy vendors worked to repurpose their solutions, slap the cloud label on them, and milk a few more years of revenue from their aging product. These fake cloud products are simply legacy applications that are adapted and hosted on the internet, never truly designed to be delivered and used via the cloud.

Unfortunately, this “cloud” is nowhere near as innovative, efficient, or useful, leaving distribution companies who choose it with an unreliable solution that likely costs much more and delivers much less than expected. Whether it’s limited availability, poor integration, or increased complexity, fake cloud products can hold distributors who choose them back, increasing ownership costs and hindering your scalability.

Knowing the difference between true cloud and fake cloud is critical to the long-term success of your software initiatives, and luckily, a new guide was released to help distributors understand.

What do distribution firms get from a true cloud solution?

Seamless integration, improved security, and the ability to incorporate emerging technologies are just a few of the benefits companies are getting with true cloud solutions, leading to increased productivity and higher ROI. Paired with improved visibility into your sales, order management, inventory, purchasing, production and services, and accounting information and the ability to scale, companies who embrace true cloud solutions can reap the rewards for years to come.

The recently released Acumatica guide, True Cloud vs. Fake Cloud: How Distributors Can Tell the Difference, explored many of the benefits of true cloud solutions and the additional risks of falling into the fake cloud trap.

So why does the cloud hold so much promise? Simple. It tears down barriers to productivity. How?

  1. Functionality and innovation: Distribution firms have unique needs, and business management solutions need to be customized to meet these needs. The cloud makes it easier for vendors to create a distribution-focused solution and for partners to customize and deliver it—no matter how many SKUs, warehouses, or currencies.
  2. Integration made easy: When you choose the right cloud ERP system, that platform will serve as the hub for all your business applications. Knowing this, it’s imperative that the product can connect to all of them. True cloud products were built with this in mind, making it easier and more affordable to integrate.
  3. Data security made simple: Trying to keep track of the software side and the hardware side was often challenging for companies using on-premises products. Luckily, the cloud has that covered. No good cloud vendor can survive without making and delivering on security promises, and they put huge focus on keeping data locked down.
  4. Delivering what’s new and what’s next: With so much on the horizon for the distribution industry, keeping track of it is hard enough—leveraging it is even harder. Luckily, cloud solutions were built to adapt with the market, helping you control your supply chain and ultimately, improve your bottom line.

The true cloud imperative: How to avoid falling into a faux cloud trap.

So how can you avoid getting trapped by fake clouds? Start by understanding what they are. Fake cloud software occurs when legacy applications are adapted and hosted on the internet, but never truly designed to be delivered and used via the cloud. Often, this means you will need additional products to access it, require hand-coded customization,costly, ineffective integrations, and poor scalability.

Ready to learn more? We invite you to download the entire True Cloud vs. Fake Cloud: How Distributors Can Tell the Difference guide to understand:

  • Three reasons mobile devices alone can’t meet the need for real-time information
  • Four ways the cloud can enhance productivity for distribution companies
  • Five reasons legacy applications don’t play well with the internet
  • Eight ways to identify true cloud software for distributors
  • Where to see true cloud software in action

Do you have the right software for distributors and other tools you need to succeed in the age of technology? Download the NexTec Corporate Overview Brochure to learn more about how NexTec can keep the gears moving throughout your organization.

Additional Distribution Resources

Distribution: Key metrics/KPIs for distribution

Distribution: How to control cash flow alongside product flow

How Acumatica data-driven insights help distribution businesses

Overcoming growth challenges in distribution: Preparing for a strong 2020

By | Acumatica Cloud ERP, Distribution / Supply Chain, ERP | No Comments
growth challenges distribution industry

Companies in the distribution industry will face a wide variety of challenges meeting the needs of an increasingly savvy and demanding customer base.

Whether you’re adding SKUs, warehouses, or simply looking to grow your customer base and revenue, successfully growing your distribution business in 2020 may seem like a monumental task. An industry readying itself for disruption, increased competition, and calls for transparency, companies in this industry will face a wide variety of challenges meeting the needs of an increasingly savvy and demanding customer base.

The 2020 distribution outlook

Much like other industries, disruption is on the minds of distributors. As technology continues to improve, buyers expect the B2B purchasing experience to become more commoditized and similar to their B2C experiences, and your customers are finding new ways to use data to drive purchase decisions.

Three forces challenging the status quo.

A recent McKinsey article found that the coming year will see an acceleration to disruption coming from three forces—your competition, your customers, and your own supply chain.

Fast-moving digital players eyeing the industry’s trillion-dollar revenue pools have begun to offer more convenience and improved transparency. Paired with this, sophisticated customers armed with new data are demanding deeper discounts and better promotions on more commoditized products.

How to address this: Keep up with your customers and competition.

Transparency, speed, and responsiveness are all imperative to the way you run your business. Whether by thriving in the commoditized environment or by making the shift to provide even more value-add, whichever approach you take needs to be smarter.

With countless customer-SKU combinations and constant margin pressure from manufacturers on one end and customers on the other, it pays to use the right customer data at the right time. The best distributors equip sales staff to act as business partners who can identify customer pain points and co-create business solutions. To make this happen, you need to break down silos and empower your sales staff with the right information at the right time.

The right customer relationship management solution, integrated with your ERP and warehouse management solutions, can go a long way in providing your sales, marketing, and customer service staff with the right information to help customers. Better yet, it can provide your warehouse the ability to fill orders more quickly and ultimately give you more speed if you need to succeed in a commoditized environment. Check out the following resources to learn more:

Finding a way to maintain or increase margins

With increased competition, faster shipping expectations, and continued wage pressure, distributors need to find ways to make sure their products continue to work for them. Your ability to maintain or even increase profit margins in 2020 and beyond will become even more important. Success in the coming decade will rely on your ability to retain customers, replace departing ones, and deliver in a distribution environment that is increasingly transaction focused.

How to address this: Smarter scaling.

There are ways to address this, however. Scale will continue to be an important factor. Scale helps distributors gain purchasing power, create denser delivery routes, optimize warehouse locations, increase coverage of products and sales, and reduce redundancies.

However, knowing how, where, and when to scale is vital. Whether through mergers and acquisitions, focusing on specific products, or expanding your reach, each provides a way to increase margins if approached properly. There are many ways to approach this; an engaged leadership team, well-resourced integration office and functional teams, a rigorous cadence, and careful performance management top the list.

Also imperative to scale? An understanding of your current business. One tool to help you see the bigger picture is through business intelligence. Such a solution can provide better planning and inventory management, increased profit margins, and more control of delivery, accuracy, and customer service. We recently discussed this topic in a blog, ERP and business intelligence in the distribution industry.

New technologies

New data and advances in computing power, data storage, analytics, and mobile platforms are turning industries as varied as music and healthcare upside down. Wholesale distribution is not immune, of course. Predictive and prescriptive analytics are helping the most sophisticated customers and manufacturers use dynamic pricing, predict churn, and optimize workforces and capital.

How to address this: Embrace new technology yourself

While new entrants, current competition, and buyers are leveraging new technology, it’s important to recognize that you’re not excluded from the technological improvements.

Whether it’s in the form of automated warehouse operations to speed up delivery, an investment in the future of autonomous vehicles to replace an increasingly expensive shipping landscape, or software to automate, improve visibility, and increase control, there are many opportunities to stay ahead of the curve in the coming years.

One of the first steps to taking control of your distribution business is to leverage technology that empowers people, provides visibility, and accelerates your business, helping you move faster, identify opportunities for growth, and move on them.

Taking control of your distribution operations with ERP

Finding a flexible, user friendly, and innovative ERP solution can connect your business and help you grow. With the competitive landscape more intense than ever, the right ERP can go a long way in getting your business where you need it to be.

Acumatica provides accurate and timely information, as well as the functionality needed to readily resolve issues and update management and customers. Our modern distribution business software provides true, company-wide inventory data that lets you create proactive, responsive replenishment operations and minimize inventory costs.

As a leading provider of this powerful cloud ERP, NexTec Group can help you implement this software and use it to stand up to the competition in 2020 and beyond. With more than a dozen locations and nearly a quarter of a century of experience in the distribution industry, you will be in good hands. No matter how large you are or complex your needs, we would love to help. Let’s get in touch.

Digital transformation in the distribution industry

By | Acumatica Cloud ERP, Distribution / Supply Chain, ERP | No Comments
digital transformation distribution

Your ability to use data will rely on your ability to digitize, gaining the speed, reliability, and control you need to take on advancing competition.

Distribution is a tough business. High levels of competition, shrinking margins, and higher expectations make it easy to feel the pressure. The supply chain is changing and with this, so is the market. And guess what? You’re right in the middle of it.

Remaining competitive in distribution will rely on a variety of tactics and strategies, but if you’re looking to get and stay ahead, you will need to transform your business and find new ways to use data, analytics, and engagement.

For the distribution industry, whose members are already pressured by competition from everyone ranging from traditional competitors to firms including Amazon and Wal-Mart, your ability to use data will rely on your ability to digitize, gaining the speed, reliability, and control you need to take on advancing competition.

What is digital transformation?

One of those phrases that has gotten thrown around a lot in recent years has been the term “digital transformation.” A term that could include anything from going paperless in the office to a complete overhaul of the way your business operates, it all starts with understanding how to apply technology—something we discussed in a recent blog.

In the blog, we used definitions from Technopedia, finding that

“Digital transformation is the changes associated with digital technology application and integration into all aspects of human life and society. […] Digital tools and technology are changing how people interact, and in turn this changes how people do business. […] In a more business-related aspect, digital transformation refers to how a company has or is transforming its core business processes using digital technology in order to gain competitive advantage and gain differentiation in its market segment.”

However, there are also challenges for companies in every industry, as too many leaders think it’s both a standard process and a metamorphosis, and that they will walk into work one day with a ‘transformed’ business. This is not the case. Digital transformation not only differs from industry to industry, it differs from company to company.

Early steps for distributors looking to transform

Knowing this, it is helpful to find a starting point and early steps, including the process of identifying where you stand, what technologies you currently have, where you hope to be, and what actions you will need to take to get to your ideal state.

Knowing where your distribution firm and your supply chain stand

As mentioned above, digital transformations are happening at different levels across all industries. As the company who often connects manufacturers or other suppliers to retailers and in turn end users, you have watched both sides adopt new digital technologies in their own ways. While this has likely changed the way you’re working with them, your competitive advantage will be built on your ability to embrace the changes they have put on you.

Addressing this will require you to take a hard look at your current business practices, technologies, and understand how you will fit into the supply chain.

Looking at your technology stack

From the c-suite to the ground-floor employees, every team member should understand why adopting digital technologies, cloud ERP software and emerging technologies (e.g. IoT, AI, robotics, next gen security), is absolutely necessary for being able to exchange data across the organization. This information can then be used to make strategic, effective decisions, meeting modern expectations from across the supply chain, and innovation.

A solid technology foundation and a clear digital strategy—which includes asking the right questions, setting clear goals and the steps to achieving them, getting input from people throughout the organization, and providing ongoing informational and training sessions—will keep the transformation moving forward.

Understanding what you will need

The digital changes also provide a window for distribution companies to rethink business models. Companies need to consider whether they will become disruptive players or are at risk of being disrupted by upstarts or competitors.

For distribution companies, this starts with being able to understand your products better. How did they get there, where are they, and how do you get them to your customers? What’s profitable? How can we do something faster, cheaper, or better than our competitors?

As we discussed in an earlier blog, there are four key components to making a digital transformation a reality: cloud computing, mobile technologies, the industrial Internet of Things (IoT), and data analytics.

Making your move: Acumatica Cloud ERP delivers for distribution

Distribution management is Cloud ERP software that helps companies manage their supply chain and logistics activities, including warehouse management, inventory management, and order management (sales and purchase orders), and integrate these activities with the company’s financials and sales. With Acumatica Cloud ERP, distribution companies can leverage technology that empowers them, improving everything from cost control to order times, supplier relationships to customer satisfaction.

As a leading provider of Acumatica for distribution, NexTec can customize, implement, and integrate the solution, training your users and setting you up for success in a digital world. Get to know more about our work and contact us for a free consultation.

ERP solution

Streamline supply chain management with a ERP solution

By | Distribution / Supply Chain, ERP | No Comments
Woman looking at a tablet and using a calculator.

Enterprise resource planning solutions allow for integrated supply chain management, with access to data and insights across devices and platforms.

Imagine a production environment where your supply chain partners can see data, trends, and patterns. Imagine those same partners being able to recommend solutions and improve sourcing, procurement, and transportation. Imagine standardized processes that optimize workflows and allow for more efficiency and profit margin.

With the right enterprise resource planning (ERP) solution, the imaginary can become the reality. As seen in the recent post, Strategic Guide to Planning Manufacturing Production CyclesERP platforms offer the chance to integrate new technologies, collaborate internally and externally, and drive productivity.

Enterprise resource planning software brings together myriad systems and data sets in one space. By combining operational functions with those involving supply chain management, warehousing, procurement, and transportation, operations become dramatically more efficient. When combined with back-office functions such as human resources, finance, sales, and marketing functions, the transformation of the business takes on new dimensions.

It’s evident that to streamline supply chain management with a ERP solution makes sense. But what are the specifics when it comes to supply chain transformation and ERP platforms?

Response to Customization

Today, manufacturers face the challenge of customers expecting customization of products and a broad assortment of options. Customers also expect these customizations to come with short cycle times and rapid delivery.

On the consumer side, tastes and preferences are evolving rapidly, with global perspectives, cultures, preferences, and tastes influencing shopping and consumption worldwide.

A manufacturing ERP software solution provides the large amounts of product data that can be displayed in matrices, dashboards, and reports that provide deeper analysis and understanding that can be shared across the supply chain. The ERP system can provide the tools for accurate and rapid assortment and distribution of various products.

Process Standardization

ERP tools can consolidate and display data taken from different sources, locations, and systems. The integration of this data breaks down internal silos by democratizing the display, access, and use of that information among employees and partners. Standardized data allows for standardized processes that ensure that information, materials, intermediate products and final products through production quickly and accurately. Standardization reduces and eliminates the amount of manual work needed between systems, reducing production schedule times and creating more accurate outcomes.

Standardization of data and processes also allows for more consistency, reducing errors, wastage, and rework. Products are completed at higher grades and quality considerations.

person using a tablet with the words supply chain management displayed.

Supply chain management reporting and insights can be shared across internal and external partners with the use of ERP solutions.

Integrating IT Systems

Different IT systems among supply chain partners and internal departments can slow down operations dramatically. ERP solutions are designed to pull data from different sources and integrate that data with outside information.

Automation for Efficiency

ERP solutions provide for far better operational efficiency. Mix rates, recipe management, production scheduling, maintenance management, inventory control, and scheduling can be rapidly developed and executed using automation tools that keep the supply chain moving. The mundane manual work can often be streamlined and done more efficiently.

Measurement and Assessment

ERP solutions allow for accurate measurement and reporting on supply chain processes, efficiency, and execution, from procurement to warehouse to transportation functions. ERP tools allow for reporting and display of performance in real time, allowing for immediate adjustments to improve performance.

Role Definition

An ERP system can assign access roles and responsibilities to allow for employees to act on information and insights throughout the supply chain. Management of the supply chain can also become more transparent with an ERP solution that allows for clear delineation of responsibilities.

At NexTec, we help companies select and implement an ERP solution that fits their supply chain and operational needs. Contact us to see how NexTec can provide insights into the vendors, products, and features that will transform your supply chain management.

shipping container

4 challenges facing distribution

By | Distribution / Supply Chain | No Comments

As we barrel down the highway heading for the third decade of the not-so-new millennium, the impact of the digital reformation is making a huge impact on the industries of manufacturing, transportation, and distribution. Known for being industries that are traditionally slow to embrace change, the entire supply chain is learning to leverage the modern improvements and conveniences of cloud computing, mobile technologies, connected devices, and software for distributors. What challenges face distribution as we draw closer to 2020? How can technology help address those challenges? Here are your answers.

1. Supply Chains are Becoming More Complex & Less Visible

Any breakdown in the supply chain anywhere in the world can derail your ability to make on-time delivery and satisfy your customers’ demands.

The layers upon layers of suppliers and middlemen are growing rapidly. Each layer of supply and demand adds complexity while reducing the ability to achieve visibility into the supply chain.Most distributors admit to having very little visibility into their supply chains, even as tools for tracking and communicating with suppliers get richer in functionality and more reliable. A single breakdown in any layer of the supply chain can upset the entire industry — isn’t it time you got software for distributors so you can control your company’s destiny?

2. Customers are Less Tolerant of Delays

You’d think that in an era in which complexity is compounding by the day, customers would become more accepting of inevitable kinks in the process that lead to delays in distribution. However, B2B customers have quickly grown accustomed to the immediate, almost infallible service of tech giants like Amazon, and aren’t readily accepting of anything less than 100 percent reliable service, 100 percent of the time. That means distributors are forced to improve on multiple levels. In addition to being able to assure on-time delivery, distributors must provide superior customer service, predictable quality, and even take on the responsibility of making extraordinary product recommendations that reliably delight their customers.

3. Technologies are Addressing Needs Across the Supply Chain

The good news is, distributors now have the technology they need to help meet these rises in demand.

Though demands on distributors are indeed growing, the technologies available to meet those stringent demands are also maturing and becoming more potent. Along with more powerful software for distributors, there are tools like GPS devices to track fleets, automation tools to streamline and simplify processes, and paperless warehousing solutions that reduce errors, improve productivity, help manage inventory, and even lower labor costs. Without these and related technologies, it would be difficult or impossible for distributors to keep up with increasing demands.

4. The Supply Chain is Migrating to E-Commerce

Just like buyers take to Amazon and eBay to buy their laptops and gym bags and books, they’re also learning to leverage e-commerce for their business-related buying needs. B2B buyers are shopping and buying online, meaning that it’s essential to have a functional website (more than just a storefront window), customer portal, and other online presence.

Do you have the right software for distributors and other tools you need to succeed in the age of technology? Contact us today so you can prepare for the distribution environment of tomorrow.

distribution KPIs

Distribution: Key metrics/KPIs for distribution

By | Acumatica Cloud ERP, Distribution / Supply Chain, ERP | No Comments
Distribution KPIs

Whether you are trying to see where you are or where you need to be, there are many types of KPIs you need to track when it comes to your distribution firm.

“The most valuable commodity I know of is information.” This quote from Wall Street’s Gordon Gecko, while not used by a moral or righteous character, is something that holds true for every business. Information matters, and no matter your industry, your ability to turn data into useful information is something that determines your success or failure now and in the future.

Unfortunately, with more and more data to measure and manage with each new supplier, customer, and product, it becomes harder for today’s distribution firm to get meaning from it.

In a world where too much data can be worse than having too little data, financial professionals often get buried in reports that they miss the important details and trends that indicate where the business is and where it’s heading.

Key performance indicators: The right information for each situation

As a finance professional, you abide by GAAP. You can answer the basic managerial needs—profit and loss, cash flow, inventory turns, and the like. However, there’s more to your business than just being able to measure necessary information and generate reports. This is where key performance indicators, or KPIs, come into play. These represent a wide variety of measurements unique to a specific industry, that can unlock the true health of a business and uncover previously unknown opportunities or challenges that traditional reporting measures fail to address.

Managing and tracking these, however, presents challenges with an ever-expanding pool of data. While new technologies such as the industrial internet of things (IIoT) present new levels of visibility, they also create more sources of data you need to track, often requiring finance professionals to spend more time trying to distill it into something useful.

Types of KPIs

Whether you are trying to see where you are or where you need to be, there are many types of KPIs you need to track.

Financial vs. Operational KPIs

Among the most common, as well as the easiest to track and understand KPIs are financial, as this is the most common language of business decisions. Common financial KPIs in every industry monitor sales, costs, margins, cash flow, and asset utilization.

However, for product-focused businesses like distribution in which relationships and reputation rely on on-time shipments and inventory availability, operational measures come into play. These metrics are inherently non-financial, but play a major role in the present and future of your business: transportation schedules, inventory, on-time delivery, backorders, customer service and more.

Historical and Predictive KPIs

In addition to this, KPIs can tell you not only where you’ve been, but where you are or may be heading.

Historical KPIs can be set up with alerts and warnings that monitor and detect exceptions, calling attention to issues or “push” alert messages sent via email or text.

On the other hand, predictive KPIs can make it easier to see where you may be heading at a glance. Leveraging internal and external data, these can help you order smarter and plan for where you need to be. Predictive KPIs for distribution may use economic indicators, demographic trends, or specific industry indicators.

The basics: Three things to track closely

When it comes to your distribution firm, it pays to know which items are being ordered, how fast each item is being shipped, and which items are profitable, with each of these accessible in real time:

  • Inventory turnover ratio: Shows the current status in the familiar ratio format as well as some key indicators that a purchasing manager might want to watch like open POs and purchasing trends.
  • On-time shipping ratio: Compares the on-time shipping performance for different warehouses, items, and trends. For example, are your warehouses getting better or worse at getting items shipped on time? Is it location-specific or systemic?
  • Profitability by item: Savvy distributors are well-advised to periodically review the relative profitability of customers, markets, channels and products as they formulate sales and distribution plans and budgets to optimize overall business plans and strategies. Being able to slice and dice information to see exactly who and what is profitable is a necessity.

Going further: More than out-of-the-box KPIs

Distribution ERP should be able to deliver these out of the box, but once you get comfortable, your business serves to benefit from finding relevant and customized KPIs, making it easy to generate new reports without a ton of additional labor. Out-of-the-box is one thing, but your system needs to be flexible enough to handle it and usable enough for each end user to generate reports without much extra coding.

Free guide: Selecting and utilizing KPIs that matter for your business

In a recent whitepaper, Acumatica explored even more about the KPIs for distribution companies, discussing how the right measurements can deliver a clearer picture of your business with less effort.

In “Key Performance Indicators for Distribution,” you’ll learn:

  • What historical and predictive KPIs can tell you about your business.
  • Which three distribution KPIs to track most closely.
  • Why out-of-the-box KPIs aren’t enough to improve performance.
  • How to systematize your KPI process.
  • The ideal number of KPIs to track on a daily basis.

Finding a distribution solution for your business: Get to know NexTec

NexTec Group specializes in helping a wide range of distributors to get what they need and want out of the solutions they use. No matter what unique focus your business has, we have the experience and expertise to deliver what you need. Get to know more about our work with Acumatica, read customer testimonials, and contact us for a free consultation.

Additional distribution resources

ERP and Business Intelligence in the distribution industry

Multi-warehouse woes: challenges in maintaining visibility

Distribution: How to control cash flow alongside product flow

Distribution Cash Flow

Distribution: How to control cash flow alongside product flow

By | Distribution / Supply Chain, ERP | No Comments
Distribution Cash Flow

Recent advancements in technology have empowered businesses to do more, leveraging tools that allow them to reshape and realign the accounts receivable (AR) and accounts payable (AP) functions and shared service center business processes.

Your job as a wholesale distribution business is to ensure product gets from your suppliers to your warehouses to your customers. An industry known for tight margins and high expectations from both customers and suppliers, everything in your business needs to flow.

While inventory is one part of this, something we discussed in our article on inventory control and fulfillment, it’s not the only element of your business that requires tracking and management, because with the movement of product comes the movement of money.

One of the oldest and most fundamental requirements for any business

Controlling the way that money flows into and out of your organization is a constant challenge, one that impacts your relationships with suppliers, reputation to customers, and ultimately your ability to generate profits now and in the future.

A process left largely unchanged for decades, recent advancements in technology have empowered businesses to do more, leveraging tools that allow them to reshape and realign the accounts receivable (AR) and accounts payable (AP) functions and shared service center business processes.

Three goals for improving money flow at the distribution business

For the distribution business, this means that there is a continued push to break down silos, embrace data analytics and business intelligence to improve decisions, and ultimately connect adjacent business functions to increase speed and decrease back-office costs. With the right processes and technologies in place, you can deliver the following benefits:

Break down silos

One of the biggest challenges for any company’s cash flow is siloed data. Not only do you have to combine the way money flows into and out of your organization, you need to align this information with adjacent functions as well. Treasury management, procurement, tax management, and so much more—if people have to spend hours or days just making sure the bills are paid using spreadsheets to connect data, your finance team is operating without the visibility they need.

With each additional location, currency, supplier, or even SKU you add, the time it takes to do even the bare minimum increases.

Connect systems

While there are many reasons silos exist, one of the most common symptoms is lack of integration. Too often, an organization’s back-office infrastructure resembles a “hair ball” of point solutions that talk to each other sporadically, if at all. “How much does my company owe to its suppliers?” “How much do my customers owe?”

The right technology not only allows you the ability to connect workflows to break down silos, it also provides you the right information when and where you need it by providing additional control over information flow and workflows.

Automate business processes

Whether it’s quote-to-cash, revenue recognition, or paying invoices, your distribution needs to make speed and accuracy a priority. Sadly, there are still thousands of companies of all sizes with manually driven workflows for some aspects of AR and AP. Held back by manual processes and emails, too many businesses lose sight of the big picture.

Paired with improved workflows and technologies, distribution businesses face an automation imperative that can only come when you can identify and rectify areas for improvement.

Curing your distribution firm’s cash flow woes with Enterprise Resource Planning

In order to bring together their operations, many businesses have looked to embrace modern technologies that can break down silos, provide a hub for connecting data, and automate traditionally manual processes in AP, AR, and more. As AR and AP are changing from serial processes and exception management to workflows with continuous audit and compliance, addressing the challenges will be a top priority for distribution firms in 2020 and beyond.

Enterprise Resource Planning applications have grown to deliver more and more certainty for distribution firms, who now leverage the cloud to connect various applications and create workflows that work. A recent IDC Marketscape report looked to address the role of ERP in AP and AR operations, noting the challenges your distribution firm may experience in connecting processes into a shared service center and comparing vendors on their ability to deliver. We invite you to read this informative report for free here.

Delivering on the cloud ERP benefits: NexTec and Acumatica Cloud ERP

For the growing distribution firm, you have many options—not only for the solution you choose, but the partner who takes you there. At NexTec Group, we understand the challenges your distribution firm faces and know how to help.

With more than a dozen locations and nearly a quarter of a century of experience in the distribution industry, you will be in good hands. No matter how large you are or complex your needs, we would love to help. Let’s get in touch.

Additional distribution resources

How Acumatica data-driven insights help distribution businesses

Features to look for in a distribution management system

Rise of the Smart Factory: Implications for Distribution and Logistics