How can an ERP influence the distribution process? - Alfa Software

How can an ERP get control over distribution activities?

How can an ERP get control over distribution activities?

ERP distribution

Distribution companies, food or non-food, are facing similar challenges in controlling their activity. Effective management of inventories, supply, optimization of transport routes, receipts management and credit limits and the pursuit of profitability for each salesperson and product are some of the challenges of this business.

An ERP can successfully manage all these processes, leaving time for tracking economic and financial profitability and analyzing options for opening new distribution routes, introducing new products in the portfolio or business expansion. The role of an ERP in the distribution activity is to interconnect four main components: the supply of goods, customers`orders, cash flow and correct dimensioning of stocks by using the ABC principle.

  • The supply of goods

    Purchase orders take into account on one hand the customers orders and on the other hand the existing stock at a particular time. For effective control of stock, there has to be done a warehouse and selling-points inventory. This operation provides clarity on goods handled by the company regarding location and quantity. ASiS ERP provides a tool that combines information from delivery orders and stocks in order to set appropriate minimum or maximum limits for supplying a particular product. ASiS ERP allows categorization of stocks (ABC principle) to separate those with a high rotation speed of those that are less profitable. All these aspects help distribution companies to strictly control costs and inventory of goods.

  • Customer orders and transport routes

    Orders from customers are the motor of distribution companies and therefore customer relationship has a particular importance. We can not speak about distribution without thinking of SFA applications. SFA applications that are integrated with an ERP are supposed to take over some of the needed data from inventory and accounting modules. As a solution for distribution companies, ASiS ERP has a dedicated application – ASiSagent that can be both used for van sales or classic distribution processes. ASiSagent is operating on smartphones / tablets that come with Android / IOS. ASiSagent is used by sales agents to retrieve and manage customer orders. They can make stock reservations, check balances, credit limits and previous orders for each customer. It all depends on the rights policy for ASiS applications. The benefits of using a dedicated distribution application are numerous:

    • traceability for every product, until it reaches the client. Products with expiration date are registered taking into account the expiration date, and this is information that helps company`s agents to provide quality goods and also to exploit stocks at the right time.
    • keeping and improving relationships with customers by rapidly delivering the required goods
    • fast and efficient tracking of customer orders and preparing merchandise in the shortest time because customer orders registered by sales agents can be seen instantly in the system, at the company`s headquarters
    • operating errors that can delay customer orders and may increase discontent
    • managing marketing mix policies easily and implementing policies regading prices and discounts
    • controlling agents’ activity as SFA applications for smartphones retrieving information from the phone’s GPS system regarding location
    • tracing agents productivity and connecting it to salary policies regarding achievements / sales
    • optimization of transport routes regarding customer orders, sales forecasts and vehicle capacity
  • Management of receipts from customers, discounts and credit limits

    As profit margins in distribution activity is not very high, it is important not to keep money blocked in stocks. Delaying payments for goods by the customers can throw off cash-flow KPIs for distribution companies and that is why collecting money from customers is important to happen with predictability. ASiS ERP tools provide the possibility to set credit limits depending on various criteria and give options to block new orders until the settlement of the existing ones (total/partial). These restrictions can be found in ASiSagent application and field representatives are implementing them according to company policies. On request, the application can issue invoices or receipts if the agents collect the money on the spot. All the records can be found in the system instantly (mostly, if van sales).

  • Inventory optimization

    Inventory optimization refers both to stock acquisition and to their rapid manipulation in the warehouse or any other location. ASiS ERP ensures goods traceability and monitors including their expiration date, if necessary, which considerably reduces risk of depreciation.
    Once established the basic processes of distribution activities and implemented through an ERP, management needs to pursue the strategies set by tracking the performance indicators.

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