Best-in-class organizations are 97% more likely to have real-time visibility into the data and processes that run their business by using enterprise software. Last week, we saw that the highest-performing wholesalers and distributors follow strategies to provide visibility to management and promote process standards throughout the entire organization. (See How Do Your Business Systems Compare to Best-in-Class?) These organizations have implemented enterprise software that provides one location for all of the information needed to run the business effectively.
Enterprise software gives greater visibility which gives managers better insight into the organization, enabling them to react quickly to operational and market changes. With visibility across departments and divisions, you can better predict demand, ship orders, interact with customers, and invest in the business with confidence.
Best-in-class wholesalers and distributors use enterprise resource planning (ERP) systems to analyze, forecast, and manage inventory. Let’s take a look at several ways to fully utilize enterprise software to increase the effectiveness of your operations.
Tools for Analysis with Enterprise Software
Inventory specialists can take data analysis functionality to a whole new level through inventory optimization tools and enterprise software such as Sage 300 and Sage X3. These inventory optimization systems provide graphics that can illustrate the combined data from all departments. The graphics can be used to analyze, diagnose, and identify seasonal demand shifts, order patterns, likely stock-out dates, lost sales, excess orders, unsellable items, price reduction patterns, and patterns of production downtime.
Best-in-class organizations use enterprise software and inventory optimization capabilities to analyze inventory data to forecast demand with greater accuracy and faster speed. Through this, the system can recommend optimal inventory levels for sales availability. It can take into account possible stock-out and overage risks giving managers the advance warning needed to take care of stock levels when they are becoming too high or too low.
Tools for Management
Managers need to know what is happening with inventory in order to best respond. Inventory optimization tools included in enterprise software make this easy through recommendations for optimal restocking schedules, as well as automated ordering and re-ordering. In addition to helping find and act on trends, the tools can also help alert managers of exceptions to these trends so they can react to them. Through integration with enterprise software such as Sage 300 or Sage X3, the tools communicate across departments and even outside of the organization using actionable intelligence. This enables informed decisions about recommended stock levels, replenishment schedules, automated orders, and exception alerts.
Using these business systems, managers can use the data to achieve inventory optimization. They can make decisions to help balance the trade-offs between the costs of a stock-out versus the costs of overstocking. Inventory management tools can adjust recommended stocking levels that are dependent upon variable risk tolerance. They help strike the balance between pushing risk tolerance in the direction of avoiding stock-outs and having more inventory ready versus pushing management to stock as little inventory as possible to avoid storage and waste costs. The ability of an inventory optimization tool to adjust forecasts based on the “what-ifs” is a huge plus to management.
Inventory management is all about making better decisions that result in better balance. This depends on the shifting goals that are influenced by the reality of the events going on in the warehouse. Tools that can improve balance provide a large and ongoing return on investment. The goal is to reduce inventory levels, resulting in significant savings. Because right-sizing is a complex challenge, cost control and customer satisfaction have become the focus. These are driving the adoption of more sophisticated systems of inventory management. By utilizing new, flexible, and refined tools that provide for dynamic optimization of inventories to maximize customer service and market share while decreasing inventory investment and lowering costs, inventory managers can significantly impact overall competitiveness and profitability.
To learn more about how wholesalers and distributors use visibility to achieve greater performance, download our whitepaper, ERP in Wholesale and Distribution: A Logical Solution to Logistical Challenges. Contact us for more information about Sage X3 or Sage 300 which can help you establish greater visibility into your inventory systems.
Our small and dedicated team specializes in helping small-to-medium size Canadian businesses and non-profits select and adapt Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Human Resource Management (HRMS) and IT services. With IWI’s 15 years in business and 100 plus years of combined experience, IWI has helped hundreds of food manufacturing, distribution, and financial service companies gain efficiency, grow, and lower their operating costs.
With the unique combination of industry knowledge and diverse technology expertise, IWI provides cost-effective solutions to help clients gain a competitive edge. As a Sage business partner, servicing the Greater Toronto Area, we support evaluation and implementation of operations and finance systems to optimize technology, ensuring high return on investment with a quick and painless transition to new software.