Challenges facing the distribution sector in its search for an ERP system
Companies in the distribution sector are currently facing multiple challenges, mainly due to the impact of online sales and new delivery channels. At the same time, wholesalers and distributors need to reduce costs, manage growth expectations, meet customer needs, and cope with increasingly fierce competition, as well as avoid delays in decision-making due to a lack of timely information.
Distributors have to deal with:
- Increased customer demands and expectations. As the online shopping experience improves, customers are more likely to use the Internet and expect better service.
- Tough competition. Companies are entering new markets and expanding their operations, which means they need to modernize business processes, increase efficiency and use resources more effectively. The best-performing companies have to get the right products, at the right price, to the right customers, when they need them.
- Technical issues. Distributors often need specialized expertise to be able to determine component specifications and sizing, improve efficiency and troubleshoot problems. They have to devise and seek solutions to complex problems, for which they need money, talented employees and the right participants in the value chain.
What do major distributors look for in an ERP system?
Tier 1 distributors are 31% more likely than other distributors to have real-time visibility into the status of all their processes and data, to support the management of the many moving parts and organize logistics with agility. Automated alerts can communicate actions based on changes in demand, while data analytics mean distributors can plan and forecast demand to better serve customers and reduce costs, as well as report changes in workflows.
Top-tier distributors are also 46% more likely than other distributors to practice real-time collaboration across departments and divisions, connecting functions such as supply chain, sales and finance. Leaders are more likely to share data with customers and suppliers, improving service, reducing costs and increasing margins.
ERP solutions enable companies to move away from Excel and spreadsheets for basic accounting and finance. Their aim is to provide a centralized system that allows control of all relevant business processes, and provides practical and useful data.
Unfortunately, many companies in various industries have had serious problems implementing an ERP (Enterprise Resource Planning) solution. The enterprise software market can be complex and expensive, and there is a real risk of lawsuits and litigation arising from failed implementations.
Many companies have found that their ERP (Enterprise Resource Planning) solutions are not delivering value. They understand all the benefits of a more modern solution and are looking for a partner to help them with business innovation, as well as technology and industry best practices, to address their scaling needs.
Even if companies are satisfied with the ERP (Enterprise Resource Planning) solution they use, many of them are looking for new solutions that provide new functions, are easier to use and are compatible with emerging technologies.
Industry analyst Forrester interviewed distributors in Europe, the U.S. and Africa and concluded that the companies:
- They had exceeded the capacity of their existing ERP.
- They suffered from inefficiencies due to old ERP systems that undermined their growth potential.
- They were losing useful data from their operations due to organizational growth and poorly integrated management tools.
- They needed to stay competitive on a limited budget.
- They demanded greater agility and flexibility from the ERP solution.
Forrester says Sage X3 can help dealers:
- Consolidate your work systems into one solution.
- Achieve consistency of processes and products in various operations.
- Gain real-time visibility and actionable data throughout the supply chain.
- Adapt to future merger and acquisition activities.
Frequently Asked Questions
Which ERP is best for a small distributor?
It depends on the complexity of operations, but cloud solutions such as Sage X3 or NetSuite are scalable and affordable.
How long does implementation take?
Generally between 3 and 12 months, depending on the size of the company and the scope of the project.
Can the ERP be integrated with existing systems?
Yes, most modern ERPs offer APIs and connectors for integration with CRM, e-commerce, and logistics.
Do you want to know what Sage X3 can bring to a distribution company according to Forrester? Click here.
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