What is ERP — Distribution Management

Distributors of any size face many of the same global challenges, including rapidly changing customer demands, complex product inventories and fluctuations in the supply chain. Distributors need a solution that minimizes manual intervention through business automation. This is where an effective ERP solution comes in (for an in-depth discussion on the benefits of ERP, read the first part of this “What is ERP?” article series and for more information on ERP financial tools, check out part two). In this third part of our series, we want to go into a little more detail on what Distribution Management ERP software is and how it can take your business to the next level.

What is Distribution Management?

Distribution management refers to overseeing the movement of goods from supplier or manufacturer to point of sale. This encompasses many processes including packaging, inventory, warehousing, supply chain and logistics. How effective your distribution management has a direct effect on the financial success and longevity of your business.

Modern distribution management includes more than moving products from here to there. It involves gathering and sharing relevant information that can be used to identify key opportunities for growth and competitiveness in the market. Now, companies often utilize their distribution forces to obtain market intelligence that are vital in assessing their competitive position.

The goal in distribution management is to achieve ultimate efficiency in delivering raw materials, parts and completely finished products to the right place and time, in the proper condition.

Picking a Distribution Management Solution for You

Selecting an ERP distribution management and accounting system to run your business is a decision that will affect your company for many years. There are plenty of distribution management systems on the market, but only one is right for your business. Acumatica offers a checklist to help distributors evaluate the offerings of three top vendors. According to the checklist, here are the 5 categories you should be using to measure and compare systems.

1. Productivity – What can the product do to make you and your staff more productive?
2. Functionality – what features and functions does the product have that actually perform the daily accounting and business management functions?
3. Technology – Does the product leverage technology for usability, customizability and maintainability?
4. Value – How does the product maximize features and functions vs. cost for the usable lifetime of the product?
5. Risk – How does the product minimize risk and facilitate security?

Acumatica Distribution Edition

We’ve discussed what distribution management is, why it’s important for your business and some categories to consider when selecting one. Now, let’s take a look at what makes Acumatica Distribution Management Suite the most effective distribution management solution for your business.

Acumatica’s modern, automated and integrated distribution software can meet all your supply chain management needs in one, cost-effective cloud ERP system. Acumatica’s distribution ERP software was introduced in their Acumatica 2018 R1 release. It aids business owners in streamlining their supply chain processes using Advanced Financials (General Ledger, Accounts Receivable, Accounts Payable and Cash Management) along with:

• Inventory management

• Sales order management

• Purchase order management

• Requisition management

• Advanced fulfillment

Acumatica Distribution Edition offers you the ability to manage your warehouse management, inventory management and purchasing concerns while integrating these activities with your company’s financials and sales. Not to mention, it was recently announced that Acumatica was awarded the PCMag Editor’s Choice Award for Best Inventory Management Software of 2018 (read our blog post on why here)!

Benefits of Distribution Management to Your Business

Improve 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 costs; 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.

Know where your business is

Ensure a steady supply of materials by optimizing and automating your purchasing process.

Know 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.

Acumatica’s Distribution Management Features

• Inventory replenishment suggestions: Improve cash flow and avoid over-/under-stocking with recommendations based on historical sales data analysis.
• Carrier integration: Get up-to-date freight costs for each USPS, FedEx, or UPS shipment your company handles, print the actual carrier labels, and track shipments using actual tracking numbers provided by the carrier.
• Carrier return label support: Print carrier return labels to include in order shipments for easy customer returns.
• Automated shipments: Fulfill large shipment volumes using predefined packing rules for specific products. Acumatica automatically determines packaging, generates labels, and confirms shipments for multiple orders with just a few clicks.
• Multiple valuation methods: Value your inventory using standard cost, moving average, FIFO, and item-specific methods. Select a different valuation method for each inventory item. Make direct adjustments to cost and physical inventory count using report and inquiry screens.
• Inventory bin/location control: Create a physical and logical warehouse structure using inventory bins and location controls. For each warehouse location specify the types of items and transactions that are allowed, the picking priority, and the cost of items.
• Inventory lot and serial numbering: Track inventory by lot or serial number. Lot and serial numbers can be assigned or entered manually when you receive, issue, or assemble inventory items. Serial numbers can be linked with item-specific valuation methods.
• Inventory transfers: Track goods in transit while transferring inventory between locations. Information is kept in a Goods in Transit GL account.
• Purchase order automation: Acumatica generates purchase orders based on inventory stock level and inventory replenishment algorithms. Orders are placed with the vendor that best meets price and delivery time requirements.
• Partial and consolidated receipts and vouchers: Track when purchase orders are fully or partially received. Consolidate orders from multiple purchase orders into a single receipt. Enter multiple bills for a single receipt.
• Sales order discounts and promotions: Manage complex pricing and discount policies including volume discounts and multiple discounts per item. Maintain policies for price overrides and create product or service bundles.
• Workflow and approvals: Create workflow rules for sales orders and purchase orders. Base rules on the type of order, vendor information, discount amount, order amount, or transaction specific information.
• CRM Integration: Convert CRM opportunities to sales orders without re-entering pricing and discount information. Customer service can locate orders to verify shipping and delivery status.
• Customer notification: Email customers when sales orders change status. Example: provide tracking numbers when a sales order goes from open to shipped.

Distribution Management Success Story – Bob Davis Sales

Bob Davis Sales provides sales, distribution, and technical support for the exploration of crude oil and natural gas. They have multiple locations and before making the move to Acumatica, each location was run on a version of Sage Peachtree that didn’t talk to each other, which was inefficient and time-consuming when it came to forming an accurate picture of the business. The company made the decision to choose Acumatica over Intacct, SAP and NetSuite in 2016 and hasn’t looked back.

With this decision, they centralized their three operations, their customer accounts, and their inventory needs. With the right inventory management software in place, they were able to log into one system and access their inventory, sales and more in minutes. They found that logging into one system and having access to inventory, sales and other information for more than 25 vendors of various forms in one system to be incredibly helpful.

In addition to a single-number inventory system, they were able to adopt new, more efficient processes. For example, rather than calling or emailing another office to see what might be in inventory, now sales simply looks in Acumatica. Reviewing inventory in stock also means that two locations don’t need to create paperwork to transfer products, which was once quite time-consuming. Now the team is more productive and efficient.

“We’ve really taken the human element out of things like special pricing and leaned on the Acumatica system, which has paid a lot of dividends. It’s made my life a whole lot easier.”

– Brett Davis, Operations Manager

Main Benefits for Bob Davis Sales

1. Slashed time required to create invoices from 30 hours a week to 2 hours

2. Improved inventory and profitability

3. Saved at least $40,000 by not having to re-create old inventory input process

4. Streamlined processes, improved productivity and increased collaboration

5. Shaved reporting from a day to minutes at most

Acumatica provides accurate and timely information, as well as the functionality needed to readily resolve issues and update management and customers. Their modern distribution business software provides true, company-wide inventory data that lets you create proactive, responsive replenishment operations and minimize inventory costs.

Depending on your business’ supply chain processes, you may need additional Acumatica cloud ERP software such as Advanced CRM, Commerce Integration, or Business Intelligence. The good news is that you don’t have to figure this out on your own. We are a gold-certified Acumatica implementation partner. Our team are experts on figuring out what cloud ERP software you require, and we’re readily available to answer your questions and to expertly assist you with the implementation process.

Need more information on the software? Check out the overview of Acumatica Cloud ERP Software.

Have any questions about Acumatica or want to request a demonstration? Contact our team.

Remember, the company you choose to implement your software dictates the success or failure of your software investment, at Aqurus we’re passionate about providing superior ERP solutions and support.

Looking for information on industry-specific ERP software solutions? Check out these posts that are part of our What is ERP? article series:

• Financial Tools
  • Accounts Receivable
  • Accounts Payable
  • General Ledger
• Distribution Tools
  • Advanced Inventory Management
  • Purchase Order Management
  • Sales Order Management
• Manufacturing Tools
  • Bills of Material/Routing
  • Material Requirements Planning
  • Production Management
• CRM Tools
  • Sales Automation
  • Service & Support
  • Customer Self-Service Portal
• Project Accounting Tools
  • Project Cost Tracking
  • Advanced Billing
  • Time & Expense Management