4 Key Challenges in the Distribution Industry for ERP

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Challenge #1 – Gain a Clear Picture of Demand

Distributors need to ensure that all business resources and operations are optimally aligned with demand.  Working to demand projections or sales forecasts is a very poor substitute for a single, complete and up-to-date picture of demand.  The single most important initiative for distributors is to provide organizations-wide access to information that lets managers and supply chain partners make fast, strategic decisions.  Distributors need the agility to scale their operations to match demand.  

Challenge #2 – Achieve Visibility to Control Inventory and Costs

Distributors need access to real time inventory data to drive proactive, responsive sales operations, make good purchasing decisions, and minimize inventory costs.  Companies need the ability to identify redundant and slow moving inventory.  Two key metrics are the cash cycle and inventory turn.  Without full visibility, distributors cannot measure and improve company performance. 

Challenge #3 – Improve Execution and Coordination with Suppliers and Customers

Speed or business velocity determines success in the distribution industry.  Poorly integrated systems, reliance on manual processes, or re-keying data already available in one system but not accessible to others is always bad news—a major cause of delays and a common source of errors.  Along with being responsive to customers, distributors also need to ensure that suppliers rely on them as trusted trading partners.  Distributors that make doing business easy and enjoyable for suppliers and customers can maintain strong relationships.  Distributors whose systems integrate easily with supplier systems gain a cost advantage. 

Challenge #4 – Position for Growth With Improved Customer Service

Distributors work in very competitive markets.  For the external customer, the speed of response, the accuracy of information such as lead-time data, and quality care across all contact points affects future orders. Getting customer service right is a “must” for sustained business growth!



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