The Challenges of Wholesale and Distribution

In a highly competitive marketplace, wholesale and distribution companies have little room for manoeuvre. To be successful they must differentiate themselves by excelling at customer service and keeping prices competitive.

Excelling at customer service involves a number of factors. Selecting the right product range is obviously key. But, beyond this, factors such as avoiding stock-outs, fast delivery, effective returns handling and proactive complaint handling are vital.

Competition on price is high and margins are continually under pressure. Consequently wholesalers and distributors must be constantly looking to optimise their stock holding and make their internal processes, from sales to shipping, purchasing to warehouse management, as streamlined and effective as possible. Only by doing so can they both minimise inefficiency and increase productivity.

Seamless Processes

Achieving the twin goals of high customer service and competitive pricing is a tough challenge for smaller wholesale and distribution companies. In some ways their size helps them, because smaller organisations can be more flexible. But, on the other hand, if business processes are fragmented then they will never deliver the efficiencies required.

Just think how efficiency would be improved if orders entered by sales or call centre staff flowed directly through to the warehouse for fulfilment, updated the stock control system, alerted purchasing to potential stock-outs and were automatically sent to the accounting system for invoicing. How much better would customer service be if sales staff had access to a customer’s complete order history, knew the exact stock position at any point in time and could quote based on up-todate pricing information? How much easier would managing the business be if there was complete visibility of all these transactions and a system in place for reporting when exceptions occurred?

The systems that deliver seamless business processes like these were once the sole preserve of larger companies. The cost was simply prohibitive for small companies. But not any more. SAP Business One for Wholesale & Distribution means smaller companies can now afford the same functionality as larger companies and gain the benefits of improved customer service and higher margins.

SAP in Wholesale and Distribution

There was a time when Wholesale & Distribution was a pure trading environment. Companies bought goods, stocked them and sold them on. Warehousing and logistics were the primary functions that had to be managed.

Today’s wholesale and distribution companies are different animals. They have to contend with:

• the provision of added value services, such as re-packaging and product assembly
• complex, often global, sourcing arrangements
• increasingly short order to delivery times
• continuous downward pressure on prices from customers
• increasing regulatory requirements for tracing and tracking products and effectively managing product returns.

Having effective warehousing and logistics operations is no longer enough. Wholesale and Distribution companies must have complete visibility of their complex supply chains in order to:

• forecast demand more accurately, to avoid stock-outs and schedule resources effectively
• closely match supply and demand, to optimise inventory throughout the supply chain
• improve traceability and tracking, without adding overheads
• improve delivery performance while reducing costs
• cost effectively manage the reverse supply chain.

The bottom line? Warehousing & Distribution companies large and small need business solutions that enable them to manage their increasingly complex supply chains efficiently, effectively and for maximum profitability.