Distribution firms pride themselves on being able to provide customers with the products they need—when and where they need them. Often, this means multiple warehouses across states lines, shipping zones, or international borders. There are many benefits to employing a multi-warehouse strategy for your distribution, but alongside these benefits comes a wide range of challenges.
Benefits and challenges of running a multi-warehouse distribution firm
Does the decision to open additional warehouses reduce your shipping costs, reduce your delivery time, and allow you to handle more SKUs? Yes. However, with the benefits that this strategy brings, it also makes it much more challenging to maintain accurate stock counts, ensure that ordering goes smoothly, handle taxes and currency, maintain control over inventory storage costs, and much more.
That said, we would like to turn our attention to one of the biggest challenges that exists in maintaining a multi-warehouse distribution center: Visibility.
Distribution firms with good visibility into their operations, inventory, and financials 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. Added to this, the decision to open another facility requires new systems and processes to route and ship orders. Now, rather than simply sending an order down for fulfillment, you have to forward the order to the proper facility, who in turn has to fill it.
This makes it very easy to end up with mixed messages, inefficiencies, or stock-outs at one location, which ultimately results in your firm losing the efficiencies that come from opening the second location in the first place.
How to deliver visibility across multiple warehouses
Whether you are opening your second, twentieth, or two-hundredth warehouse, visibility is always a concern. However, with integrated ERP solutions, you can bring together the data you need to control inventory, increase profitability, decrease costs, and increase satisfaction.
This, of course, requires proper planning and execution to control inventory, gain a single version of the truth, and see a clearer picture of your warehouse operations. In order to embrace the true benefits that visibility can provide for your growing distribution business, businesses like yours are turning to enterprise resource planning software to take control and gain the visibility they need—no matter how many locations they have.
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.
You’ll also experience better decision-making with more timely and accurate financial data through Acumatica’s Financial Management software, which includes the core set of financial applications, fully integrated with customer management and operational software for distributors and wholesalers.
The benefits of our cloud ERP software can be seen in:
- Improving customer satisfaction while minimizing cost: Efficiently manage distribution processes with real-time visibility of available inventory, inventory in transit, reorder quantities, and inventory costs. Minimize inventory and costs; optimize quoting, acceptance, entry, and fulfillment processes.
- Reducing 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.
- Knowing where your business is: Ensure a steady supply of materials by optimizing and automating your purchasing process.
- Knowing your true costs: Determine real-time profitability by warehouse, product line, location, or business unit. Use real-time information to control costs across the entire supply and distribution chain.
In the coming months, we look forward to discussing even more of the challenges that multi-location distribution firms like yours face and explore how Acumatica can help your company to overcome these challenges. At NexTec Group, we understand your pain points 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.