In the dynamic landscape of the distribution industry, specialized ERP solutions assume the role of masterful painters. Namely, they craft an era of heightened efficiency, visibility, and operational brilliance. As enterprises in distribution grapple with the intricacies of supply chain management, timely deliveries, and optimal inventory levels, the call for tailored technological solutions becomes increasingly clear.How Do I Know ERP Will Benefit My Distribution Business?
While ERP’s potential sounds promising, you may wonder whether any established evidence exists of ERP’s benefits in the distribution industry. Fortunately, a study done by Khan and a few other authors from 2020 demonstrates the nature and benefits of industry-specific ERP for distribution businesses. 1
In particular, the text explores the relationship between Enterprise Resource Planning (ERP) systems and supply chain management (SCM). In short, the study found that ERP systems contribute to competitive advantages and improved supply chain management, leading to enhanced organizational performance. With these benefits in mind, the study came up with four main hypotheses as to why this is the case. Namely, they considered a few of ERP’s popular features: automation, record keeping, time management, and artificial intelligence.
The study uses four-dimensional building as a framework to assess supply chain management, as the method has gained popularity. In summary, four-dimensional building considers not only the construction of a project itself, but also time parameters such as schedules and milestones (for more information, check out this article: What is 4D BIM and How it Works with 3D BIM Model | BIMCommunity). Additionally, the study considered both internal and external logistics chains and how their factors impact the landscape. The study also takes into account the impact of strategic partnerships, distributor activities, and information sharing on competitive advantage. They observe how ERP systems benefit this aspect by managing information and processes.
Overall, the study found that many well-developed organizations use ERP systems to improve supply chain management. They found that the main benefits that ERP brings to the supply chain include organizational performance and general competitive advantage.
These systems are popular for distribution and supply chain for a reason. Distribution businesses that used ERP systems demonstrated an improvement in supply chain management as errors were significantly reduced or eliminated. The overall findings support the notion that ERP systems contribute to the efficiency, demand planning, and decision-making of supply chain management operations. Generally, distribution businesses that use ERP have fewer delays, improved cost-effectiveness, and better forecasting. At the end of the day, the study finds that its original hypotheses of automation, time management, record keeping, and artificial intelligence providing improvement, is accurate. From these findings, the study urges businesses to consider ERP and other IT solutions to streamline record-keeping and departments on a unified platform.
What Is SAP’s Approach to the Distribution Industry?
Overall, SAP finds that the introduction of B2B e-commerce and marketplaces has increased competition.2
As B2B customers grow to expect an updated and personalized e-commerce approach, distributors must adapt. These customers demand a wider range of products and services, along with shorter delivery times and multiple delivery options. In response, many leading distributors emphasize customer collaboration and a trust-built relationship. This way, they are able to maintain communication and ensure satisfaction.
To help in this pursuit, SAP offers many services in its distribution solution:
- SAP’s AI-powered tools help distribution businesses avoid risks and disruptions.
- SAP S/4HANA Cloud improves overall operations.
- Zilliant Price IQ accounts assesses price to offer advice for selling scenarios.
- SAP Commerce Cloud empowers distributors to interact with customers seamlessly across various channels.
- OMS+ Cross-channel Order Management Solution enhances and unifies the user interface.
- Tools such as SAP Data Maintenance for SAP ERP by Vistex help businesses maintain product, pricing, and vendor master data.
- SAP Customer Identity and Access Management shortens time to market and ensures privacy and compliance.
Overall, SAP’s distribution solutions aim to offer demand management and insights, response and supply planning, and sales, inventory, and operations planning. Additionally, SAP assists with procurement challenges with tools for cost recovery and rebates, buy-and-deliver services, invoice and payables management, and indirect goods procurement. Finally, businesses can optimize supply chain execution with solutions for order promising, track and trace, transportation management, warehouse management, and yard logistics.
On the front end, marketing and sales efforts benefit from SAP’s commerce personalization, customer rebates, and incentive programs. For instance, the platform offers omnichannel commerce management, 360-degree customer view, quote-to-cash management, optimized marketing, and real-time CPG analytics.
Conclusion
In the dynamic landscape of the distribution industry, the emergence of industry-specific ERP solutions ushers in an era of heightened efficiency, visibility, and operational excellence. As enterprises engaged in distribution grapple with the complexities of managing intricate supply chains, ensuring timely deliveries, and maintaining optimal inventory levels, the need for tailored technological solutions becomes increasingly apparent.
Industry-specific ERP solutions offer a holistic view of the entire distribution network, providing real-time insights into inventory levels, order statuses, and shipment progress. This enhanced visibility not only reduces the risk of stockouts or overstock situations, but also contributes to more accurate demand forecasting– a critical aspect for meeting customer expectations in the ever-evolving market.
Overall, logistics optimization becomes a core theme within the realm of industry-specific ERP solutions for distribution. Fortunately, ERP systems possess features that facilitate efficient route planning, warehouse management, and transportation coordination. Automation and data-driven insights empower businesses to minimize lead times, reduce transportation costs, and foster a more agile and responsive distribution network. This way, the distribution business stays competitive in its fast-paced industry.
As demonstrated in the 2020 study, these features and benefits truly impact businesses in the supply chain and distribution sector. Additionally, SAP offers specific solutions that allow distribution businesses to benefit from specialized features without needing to worry about customization.
At the end of the day, ERP solutions indeed offer streamlined order processing, improved warehouse efficiency, and enhanced customer satisfaction.
If you would like to learn more about how ERP can benefit the distribution industry– and businesses in general — take a look through our blog and website. Additionally, don’t hesitate to contact us if you believe that SAP and personalized assistance is the next best step for you.
1 Khan, Umair & Asim, Muhammad & Manzoor, Salman. (2020). Improving Supply Chain Management of a Distribution Firm Using ERP System. European Journal of Business and Management Research. 5. 10.24018/ejbmr.2020.5.2.248. (PDF) Improving Supply Chain Management of a Distribution Firm Using ERP System (researchgate.net)
2 “Wholesale Distribution.” https://www.sap.com/industries/wholesale-distribution.html
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