If you are running your processes manually or through disconnected systems, you will struggle to track your inventory, which results in inventory losses, missing opportunities due to product shortages, or meeting customer expectations with delivery.
If your processes are currently manual or use siloed systems, you will be spending a significant amount of time resolving discrepancies. You will plan based on inaccurate data, and the information can’t be real-time.
Without a global distribution ERP system that supports a multi-entity organization’s operations, your disconnected locations or warehouses might prevent you from getting a centralized view of your customers, vendors, and inventory.
If you are selling to a big retailer or an OEM, they will not work with you unless you have the capabilities to integrate with their systems. If your suppliers are equally larger, they might not do business with you if your processes are manual.
You may have been thinking of going direct to end customers and perhaps already developing an e-commerce channel. However, to provide the same service levels as your retailers, you need your e-commerce processes to be completely integrated with your distribution ERP system.
Warehouse efficiency drives the competitiveness of distributors. You need to implement efficient picking processes such as batch or ware picking, otherwise your customer lead time is likely to be higher. Without barcode readers, your manual methods will be highly slow and inefficient.
The disconnected and on-prem systems are likely to have lagged in receiving critical business information in the form of reports, and you need the help of your IT to get essential data.
Not all suppliers could be equally trustworthy. You need quality management processes while receiving the suppliers’ products to take appropriate corrective action for the material. These manual quality processes will slow down your procurement processes and may lead to financial losses.
With the rise of trends such as vending machines on the shop floors and retail locations, your manufacturer and retailer customers would want you to provide inventory in the JIT fashion on their premises without locking their cash. Managing a large number of vending machines is hard without an integrated ERP system.
Suppose you don’t have a distribution ERP system that supports advanced distribution processes such as Dropshipping, Consignment Warehouses, and Cross Docking. In that case, you will need to stock inventory levels unnecessarily, which will result in locked up cash in your inventory.