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 harness the B2B ecommerce boom, which is expected to reach over $2 trillion in sales by 2024—up from a current $1.67 trillion.
Digging down even deeper, new competitors are forcing distributors to think harder about how they differentiate themselves in crowded marketplaces, all while talent shortages and pace of business are driving a bigger 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 like QuickBooks and then 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-view of its operations, challenges and opportunities.
The challenges created by disjointed technology don’t end there. The month-end close takes longer and longer to finish; good supply chain visibility is out of reach; and inventory counts are perpetually inaccurate. In a world where both overstocks and out-of-stocks 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 of every sale.
You Can’t Run a Growing Business on Spreadsheets
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 when it comes to having the most updated, 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 all of the fundamental tools they need to run their businesses, and that integrate readily with a number of different third-party applications. At ScaleNorth, we’ve helped many wholesale distribution firms implement NetSuite, a cloud-based ERP that gives companies the power to tackle their current challenges, take on new business and leverage future opportunities.
Here are six qualities that make NetSuite the ideal fit for growing wholesale distributors:
1. Optimized inventory management. With NetSuite, you can optimize your current inventory, reduce your handling costs and improve your cash flow. You’ll always have the stock on-hand to meet your customers’ needs, without having to rely on overstocking and guesswork to get you through the week. Because NetSuite is cloud-based, you can use it across every one of your stocking locations, all of 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), ecommerce 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 those buyers coming back for more.
4. Conserve fulfillment resources. Warehouse labor is becoming more difficult to find and costlier to retain. ScaleNorth helps distributors work through this persistent problem with NetSuite’s intelligent pick, pack and ship functionalities. The ERP tells employees exactly which bin to pick from and maps out the quickest route for hitting all of the different bins as efficiently as possible. Employees can use their mobile devices to scan barcodes and have the information loaded directly into the ERP, which supports zone and wave picking while prioritizing picking according to the individual carriers’ pickup times. ScaleNorth can integrate barcoding solutions like RF-Smart to NetSuite allowing for 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 the financial and operational performance; automated transaction flows; less manual data entry; and the ability to maintain compliance with applicable accounting standards while also establishing control and enabling audit trails.
It’s Never Too Late to Change
Your wholesale distribution business needs a fully-integrated, omnichannel suite of products that seamlessly connects all of your business operations. Your wholesale distribution business needs NetSuite, which allows you to manage every part of your business through a single platform. All of your business data is connected. With NetSuite, you can meet the demands of the modern customer while also improving your efficiency and adding to your bottom line.
At ScaleNorth, we understand NetSuite inside and out and we can handle all of the integration and optimization work needed to keep your distributorship running at full capacity. We recently worked with one wholesale distributor that was using disparate systems, manual processes and spreadsheets and dealing with 100% employee turnover. We helped them turn their company around using NetSuite, and we’re ready to help you too.
If you’re reaching $5 million or more in revenue and finding that your legacy accounting solution is no longer cutting it for your operations, contact ScaleNorth today for a consultation.