Ongoing supply chain disruptions, the national labor shortage, and the persistent need to “do more with less” are just some of the high-level challenges that North America’s 35,000 wholesale distributors are dealing with right now.
Increased competition and the need to digitalize their operations and achieve higher efficiency levels are also top of mind for growing distributors in 2023. The latter is especially important for companies to capitalize on the B2B e-commerce boom, which is expected to reach over $2 trillion in sales by 2024—up from $1.67 trillion.
Digging deeper, new competitors are forcing distributors to think more carefully about how they differentiate themselves in crowded marketplaces, while talent shortages and the pace of business are driving a greater need for automation. With companies like Amazon and Alibaba setting the standard with massive product catalogs and fast shipping, wholesale distributors have to get up to speed quickly or risk being left behind.
The problem is that many distributors are still running on antiquated legacy systems, point solutions, and spreadsheets. They may manage their warehouse operations in one system, their financials in basic software such as QuickBooks, and their shipping operations on yet another third-party platform. None of these applications “talk” to or share data with one another, which means the distributor never gets a full, 360-degree view of its operations, challenges, and opportunities.
The challenges created by disjointed technology don’t end there. The month-end close is taking longer and longer to complete; supply chain visibility is out of reach; and inventory counts remain inaccurate. In a world where both overstocking and out-of-stocking are costly, not having the right inventory visibility, forecasting, and demand-sensing tools in place can mean the difference between a profit and a loss on every sale.
Using Excel spreadsheets to cobble data and reports together takes a lot of time, effort, and manhours. Making sense of the disjointed data that’s on those spreadsheets is equally burdensome. This commonly used approach also puts distributors behind the curve in having the most up-to-date, actionable data to base decisions on. Manual entry often leads to data errors, for instance, while a lack of real-time reporting forces leadership to make decisions based on historical data that’s no longer relevant.
“Distributors are demanding more visibility into their supply chains—from raw material acquisition to last-mile transportation,” DigitalCommerce360 points out. “That includes more insight into partners’ businesses (specifically their pain points) and tighter strategic alignments. Distributors need earlier warnings when instability is ahead—and more ways to respond.”
For help, more distributors are turning to modern, unified Enterprise Resource Planning (ERP) platforms that provide the fundamental tools they need to run their businesses and integrate readily with a range of third-party applications. At ScaleNorth, we’ve helped many wholesale distribution firms implement NetSuite, a cloud-based ERP that enables them to tackle current challenges, take on new business, and leverage future opportunities.
1. Optimized inventory management. With NetSuite, you can optimize your inventory, reduce handling costs, and improve cash flow. You’ll always have the stock on hand to meet your customers’ needs, without relying on overstocking or guesswork to get you through the week. Because NetSuite is cloud-based, you can use it across all your stocking locations, which will benefit from accurate demand-based inventory planning and forecasting.
2. EDI integrations are a breeze.
NetSuite is an ERP that “plays well” with others, and that uses application programming interfaces (APIs) to make EDI and other integrations easy and seamless. Whether you’re bringing your own warehouse management system (WMS), e-commerce platform, or shipping application to the table, ScaleNorth will help you create a single, streamlined workflow that feeds right into your ERP.
3. A built-in warehouse management system (WMS). NetSuite's comprehensive fulfillment solution helps you reduce cycle times and shipping costs while increasing on-time delivery rates. With its built-in WMS, NetSuite also helps you meet customer expectations, improve loyalty, and keep buyers coming back.
4. Conserve fulfillment resources. Warehouse labor is becoming increasingly difficult to find and more expensive to retain. ScaleNorth helps distributors address this persistent problem with NetSuite’s intelligent pick, pack, and ship capabilities. The ERP tells employees which bin to pick from and maps the quickest route to hit all bins as efficiently as possible. Employees can use their mobile devices to scan barcodes, with the information loaded directly into the ERP. The system supports zone and wave picking and prioritizes picking based on individual carriers’ pickup times. ScaleNorth can integrate barcoding solutions such as RF-Smart with NetSuite, enabling maximum efficiency and automation.
5. Leverage the power of business process automation. With NetSuite, distributors can offload highly repetitive, manual tasks to the ERP and reallocate valuable human resources to more important projects. Using business process automation (BPA), NetSuite helps distributors generate major efficiency gains, save time and money, reduce errors, and increase transparency. Especially effective when it’s executing mundane, repeatable tasks that are not the best use of your employees’ time or skills, BPA streamlines individual tasks and workflows and effectively removes the need for excess labor at a time when companies face steep challenges with both hiring and retention.
6. Get real-time financials at your fingertips. If you’ve been running your distributorship on spreadsheets and QuickBooks for several years, you’re in for a real treat when you work with ScaleNorth to implement NetSuite. Not only will you gain all of the benefits outlined above, but you’ll also get easy-to-understand metrics (e.g., Cost of Goods Sold and Picking Accuracy) that you can use to improve organizational efficiencies and grow your business. Other key “wins” include real-time access to financial and operational performance, automated transaction flows, reduced manual data entry, and the ability to maintain compliance with applicable accounting standards while establishing controls and enabling audit trails.
Your wholesale distribution business needs a fully integrated, omnichannel suite of products that seamlessly connects all your business operations. Your wholesale distribution business needs NetSuite to manage every aspect of your operations on a single platform. All of your business data is connected. With NetSuite, you can meet the demands of modern customers while improving efficiency and increasing your bottom line.
At ScaleNorth, we understand NetSuite inside and out and can handle all the integration and optimization work needed to keep your distributorship running at full capacity. We recently worked with a wholesale distributor that used disparate systems, manual processes, and spreadsheets, and experienced 100% employee turnover. We helped them turn their company around using NetSuite, and we’re ready to help you, too.
If you're approaching $5 million in revenue and finding that your legacy accounting solution is no longer meeting your operational needs, contact ScaleNorth today for a consultation.
