Warehousing and distribution companies pride themselves in being able to provide customers with the products they need when and where they need them. Because warehousing and distribution business is demand-driven, this often means that most companies require multiple warehouses across various state lines, shipping zones or international borders. Any seasoned distributor knows the challenges of employing a multi-warehouse strategy for distribution, but the benefits of this type of approach far outweigh these challenges.
Below, we discuss both the challenges and benefits of running a multi-warehouse strategy for distribution and how cloud-based Enterprise Resource Planning (ERP) software can help increase visibility across locations and provide you with the insight you need to grow your business.
The Benefits and Challenges of a Multi-Warehouse Strategy
The benefits of opening additional warehousing and distribution centers are clear: you can reduce shipping costs, reduce delivery time and handle more SKUs. But additional locations also makes it much more challenging to maintain accurate stock counts, ensure accurate order processing, efficiently handle taxes and currency and maintain control over inventory storage costs.
The root of all these challenges can be grouped into one overarching issue most distributors struggle with daily: visibility.
Warehousing and distribution organizations with good visibility into their operations, inventory, financials and supply chain management are able to deliver on the promises they make to customers.
While the decision to add new locations is an investment that can pay for itself in a variety of ways, it also represents a significant increase in labor, capital and operating expenses. In addition to these challenges, the decision to open multiple facilities requires the implementation of new systems and processes to route and ship orders. Now, instead of having one fulfillment department responsible for every order, multiple fulfillment teams at multiple locations will have to communicate with each other to ensure accuracy and efficiency.
This makes it very easy to end up with mixed messages, inefficiencies or stock-outs at one location, resulting in your business losing the benefits that come from opening the second location in the first place.
How to Increase Visibility across Multiple Warehouses
Whether you are opening your second, 20th or 200th warehousing or distribution facility, visibility between locations is always a concern. With the help of integrated ERP software, however, you can bring together data from across your entire organization to better control inventory, increase profitability, reduce costs and increase customer and supplier satisfaction.
Cloud ERP software integrates operational processes at all of your locations into one solution, providing you with accurate real-time information that helps you better manage your business, anticipate issues and resolve challenges as they occur. Software designed for the distribution industry helps businesses like yours gain complete visibility into their inventory levels from multiple locations, which helps them create proactive workflows for replenishment processes and minimize inventory costs.
But increased visibility into your operations does more than help with just your inventory management processes. The benefits of a cloud-based ERP solution can also help your distribution company:
- Improve customer satisfaction while minimizing costs
Efficiently manage distribution processes with real-time visibility into available inventory, inventory in transit, reorder quantities and inventory costs. You can also optimize quoting, acceptance, entry and fulfillment processes.
- Reduce order times
Eliminate delays through automated sales order processing and shipping order generation. Set rules to manage multiple warehouses, returns, credit limits, drop shipments and more.
- Anticipate future business
Take a consumer demand-driven approach to ensure a steady supply of materials by optimizing and automating your purchasing process.
- Understand your true costs
Determine real-time profitability by drilling down on data based on warehouse, product line, location or business unit. Use real-time information to control costs across the entire supply and distribution chain.
Solutions like Acumatica Cloud ERP help distribution companies automate processes and reduce errors in purchasing, order fulfillment, inventory tracking and customer support. By embracing a robust and flexible solution to manage all of your finance, operations, supply chain and distribution processes in one place, you can transform your business and ensure success. To learn more about how Acumatica can work for your distribution business, reach out to us. We’d love to chat.