How Can A Distribution Management Solution Improve Logistics?

Distributors should consider adopting a fully integrated distribution management solution instead of trying to make up for shortcomings in their system.

The primary issue a lot of distributors face is that their existing system doesn’t have the capabilities needed to manage their logistics. As a result, they’re forced to fill in the gaps using spreadsheets and other manual efforts to manage distribution. That prevents logistics from being integrated with ongoing operations, such as procurement and order processing.

While most distributors have some kind of inventory management system, they can’t get the reporting they need out of that system. Instead, they supplement their system with spreadsheets. Since they can’t get certain key metrics, they dump data out into Excel, and they manipulate it and try to create reporting that way.

Automation is a widely known and simple solution to the problems presented by manual processes.

“Manual processes equal added costs,” declares an article on CIO.com. “Business-wide electronic and real-time tracking will not only reduce costs by improving processes within your business, it will also make you more attractive for customers (and suppliers).”

By sharing your data with customers they know the availability of the items they want to buy and when they will get them. This improves the customer experience.

A distribution management solution also can improve communication within the logistics channel by providing portals to members in the supply chain. In addition, it can help distributors optimize capacity planning, including warehousing and inventory management.

Data management is a key element of logistics, so it’s important to do it effectively and efficiently. An integrated distribution management solution allows companies to do that.

Implementing an integrated system would give a business more control and visibility over the delivery process. These systems would help manage the flow of goods and reduce the cost of the logistics process.

Another issue that distributors face is they may not have visibility into key operational metrics such as inventory turnover, shipping costs or efficiencies. Manual spreadsheets can severely limit that visibility.

One of the other issues with the limited systems that many companies have is that they cannot support business growth. Logistics doesn’t just increase in size as companies expand, according to an article on Forbes.com. “Logistics is an area of business that grows along with your company, but in a different way,” the article explains. “Rather than becoming bigger, logistics becomes more complex.”

It’s important to have a system in place that can not only handle that growth, but can also ease the company through the process seamlessly.

An integrated distribution management solution is able to grow in scale with your business. As companies expand, having a technology solution will certainly help to simplify and streamline the process. Distributors should look at cloud computing and Software as a Service (SaaS) solutions because they’re scalable.

Still, despite its potential benefits, cloud computing has not yet taken off with most distributors, according to an article on the Formtek blog. Among large distributors, 63 percent run ERP on-site rather than in the cloud, an Aberdeen Group study found.

Leading companies are more likely to take advantage of the cloud, with 26 percent reporting use of it compared to 20 percent of the rest of the respondents. However, the limited adoption should change as the infrastructure that supports cloud computing becomes more mature.

For now, distributors must recognize the importance of an integrated distribution management solution, or risk falling behind their competitors as logistics becomes increasingly complicated.