Distribution

ERT Group offers three Microsoft Dynamics Solutions for your distribution and supply management needs.

ERT Group provides powerful, adaptable solutions like Microsoft Dynamics GP, Microsoft Dynamics AX, and Microsoft Dynamics NAV that give distributors the tools they need to manage every aspect of their business. From order entry and procurement to sophisticated inventory and shipment management, these integrated solutions can be deployed quickly and inexpensively, without complicated customization or drawn-out implementation projects.

Overview:

The $4.2 trillion distribution industry is vital to both global and local economies. The industry helps to simplify the flow of products, payments, and information by acting as an intermediary between the manufacturer and the final customer. Distributors store goods that neither manufacturers nor retailers can store until consumers require them.

Faced with shrinking margins, growing costs, and new competitors, many distributors are offering value-added services to improve customer loyalty, and outsourcing core business processes to reduce costs.

The distribution industry provides merchandise to retailers, commercial and institutional users, and others in the wholesale industry. The principal types of wholesale operations include merchant wholesalers who take title to goods and then resell them, sales branches maintained by manufacturing operations, and agents or brokers engaged in buying and selling merchandise for others.

Market Scope:

The distribution industry, because it handles goods for sale, is directly impacted by changes in the economy and consumer confidence.  Although most industrial distributors so far have escaped the effects of the economic downturn, the decrease in industrial activity soon will trickle down to distributors. U.S. producer prices dropped a record 2.8% in October, and industrial production decreased 3.7% in September.  Additionally, the industry is facing competition from online retailers and manufacturers that sell their own products over the Internet, bypassing the middleman entirely. By selling directly to consumers, companies can keep the total profits instead of sharing them with distributors.

Among the steps businesses are taking to combat the economy are: 1) reducing costs, capacity and reliance on bank financing; and 2) stepping up revenue-generating strategies (such as acquiring new customers and increasing brand recognition) and product innovations.

Industry Issues:

Economic Dependence – Demand within the distrubition industry is a direct reflection of the nation’s economic well-being. In bearish economic times, customers are less likely to spend their discretionary income on unnecessary consumer goods, and as a result the industry suffers. The current pressures soaring oil prices, sluggish home sales and consumer credit crunch are all economic factors that play into overall demand. In order to counteract these economic factors, distributors are turning to promotions and deep discounts.

Rising Costs – Costs are increasing among many commodity areas, causing direct downward pressure on distribution margins. The soaring price of oil has seriously impacted transportation logistics costs within the industry. Distributors are struggling with managing cost effectiveness and providing their customers with associated value.  Many distrubitors are turning to private labled goods as one way to reduce the costs of their products, while still maintaining margins.

Customer Buying Experience – The internet, e-commerce, and Electronic Data Interchange (EDI) have allowed distributors and their customers to better gather price data, track deliveries, obtain product information, and market products. Distributors must constantly upgrade their infrastructure to, at a minimum, stay current with their competitors.  The leading distributors use technology to enhance their customers buying experiences and tie closer to their extended supply chains.

Effective Asset Utilization – Distributors are consistently held to make the most of their assets that are tied up in property, equipment and infrastructure. Poor or erratic utilization of fixed assets can lead to a high level of cost per unit of measure and lower than desired inventory turns per square foot.

Competitive Supplier Pricing – In an environment with rapidly rising costs, distributors must engage in competitive pricing with their suppliers. Many distributors have great difficulty arriving at competitive price points with suppliers. Distributors must be certain that price points are quantity sensitive, their requirements for purchase are clearly communicated to the supplier, and they have a clear view of the suppliers’ forecast.

Strategic Planning – Perform long-term supply chain design, marketing planning, and sales and service planning.

Supply Chain Planning – Conduct advanced demand and supply planning to maintain or improve service levels, reduce your capital investment in stock across the supply chain, and identify short- and medium-term trends.

Procure-To-Pay Management – Manage strategic and operational relationships with your suppliers to reduce the cost of goods sold, streamline operations, and decrease overhead costs.

Supply Chain Execution – Improve inbound and outbound processes and warehouse management to accurately measure the performance of core warehouse operations and avoid stocking goods unnecessarily.

Order-To-Cash Management – Support a range of sales channels and services that provide income, increase customer satisfaction, and reduce customer migration.
Value-Added Services – Counteract margin pressure with fee-based value-added services, including general, logistics, and financial services.

ERT Group Solutions Benefits:

Streamline business operations

• Automate critical business processes, from order capture to inventory replenishment, and help reduce wasteful activities.
• Deliver real-time business intelligence and alerts on the status of the business to management and customers.
• Enable customer self-service through Web portals.

Improve supply chain and inventory management

• Provide easy, real-time visibility into inventory, sales, purchasing, and financial information across multiple locations.
• Accurately track shipping and delivery of parts by integrating Automatic Data Collection (ADC) functionality with enterprise resource planning (ERP).
• Maintain accurate real-time inventory data and optimize layout, picking methods, and movement.
• Create accurate demand forecasts.

Enhance customer relationships

• Help ensure accurate and on-time delivery with powerful customer/supplier integration, planning tools, and company-wide inventory visibility.
• Respond rapidly to unique customer demands, such as specific packaging and shipping requirements.
• Manage customer interactions across multiple communication channels.