Role of ERP in controlling the distribution networks and inventory management: what companies should consider the acquisition of inventory management applications?
In principle, all companies have in store portfolio of products considered significant that should be important to consider purchasing a software application able to effectively manage inventory. Scalability and complexity of applications needed solving current needs are directly proportional to operational issues. Companies should select the information tool that brings the highest added value versus the cost of acquisition, implementation and maintenance. In the case of companies that have major problems in inventory management, purchasing an ERP is a direct investment in the company’s health and recovery of initial costs can be very fast by stopping current losses and, especially, the next obvious benefits realized through implementation.
How is the distribution made with SeniorERP?
Control of distribution is present at two levels: operational and managerial. Operational control is achieved by designing, implementing and observing coherent streams of work at the departments and / or interdepartmental. Level managerial control study involved quantitative indicators / quality for the various work processes and corrective actions where appropriate. It is also very important principle of budgeting and cost tracking and revenue realization by structures centers cost / revenue / profit specific. Distribution Companies wishing to make a step in entrepreneurial management to one based on process need to undertake this work, which brings not only control but also scalability.
As mention above, as a general principle, present at all levels of organization, by implementing SeniorERP, aims at redirecting the activities of departments from the operational area to analysis and control.
How to evaluate the performance of a network of distribution with SeniorERP?
By analyzing different qualitative or quantitative process-specific work in hand and economic financial analysis indicators cumulative level of organization. There are indicators for the sale for the acquisition to logistics, cash flow, etc.. Due to the complexity and volume analysis, sometimes enormous data analyzed SeniorERP has the tools of business intelligence, especially for this type of analysis. Do not neglect any operational reports, quick and simple to use and understand, which helps in developing efficient work day.
Examples of operational indicators critics of business: logistics indicators (time training command; Grade loading car park; stock rotation) or sales indicators (Number of documents; average value document, adding commercial / profit rate; Number of positions on the document; Number of items sold; Number of active clients, average collection period; degree of not cashing; Volume Returns, Discount etc.).. In case of implementation of a distributed system without the existence of a network of VPN communication for your server application will use the HTTP protocol, confidentiality and message integrity is assured by PKI infrastructure.
If you use as application servers support Windows 2003 with IIS 6.0 data from server to client is done with a compression of up to 1000%. This way, speed (even on a weak connection dial-up or GPRS) is maintained at a constant level.
If a VPN secured network is available you can opt for fast binary communication at the TCP, without compression, with or without security.
Required band depends upon the number of simultaneous users of the location, number of transactions and the type of user activities (eg billing versus reporting).
Imperative recommendation: the band must be exclusively reserved to the ERP system, in order not to overlap the traffic generated by the E-mail/Internet server with the flow generated by the ERP application, this overlay resulting in slow processes.
There is a direct connection between inventory management and profitability of the company?
For any manager of a company that is faced with the problem of stock management, the answer is obvious, especially when companies act on the import and distribution vertical. Merchandise is the blood that circulates through the veins. Depending on how bodies are supplied correctly, the whole body i is healthy. The impact of policy stocks is distributed on all surface organization. A policy may have incorrect stocks following effects (among others):
1. Disturbance financial flows of the company. If supra –stocks exists, payments for imports, transport costs, invoices from suppliers which had to be paid before the company could sell, not to mention to collect the products purchased, loss of opportunity due restraint capital imbalances in bringing the organization’s cashflow. There is the possibility to obtain advantage advantageous conditions to purchase a higher volume of goods, but the medium or long term results can be disastrous if the company can not support this funding, or if the commercial benefits expected to appear late.
2. Deterioration of relationships with commercial suppliers. Derived directly from paragraph 1, an unhinged casflow lead to delayed payments to suppliers, orders irregular in time and structure, etc.. The negative effects are not hard to imagine.
3. Overload / under-functioning of logistical infrastructure. Both situations are very unpleasant. If supra – stocks become difficult to put into practice any efficient storage management. Efforts to move the slow-moving products are expensive and resource consuming. In the opposite case, unnecessary costs due to infrastructure capacity, just in case of overload, are a grinder for the company.
4. Loss of sales due to lack of stock. It is very often the case that the first thing a seller does when not reaching the target is not being able to control products of class A. In some cases, overact, of course, but in most situations, the signal is real problem. Distribution of existing stock, lack of correlation of sales structure is a common mistake, especially due to lack of coordination between departments and supply sales and / or lack of an instrument that performance information to provide relevant situations, real-time basis for decisions.
5. Costs due to depreciation of stock. In the case of expiring, sizing stock, so represent a balance between sales targets default and devaluation risks is a challenging exercise, which attempt to experience staff governor, effective information tools, quality relationships with suppliers the speed with which information from the marketing department generates effects etc..
6. Rotation of personnel. As noted, the departments affected by a poor policy of stocks are many, and usually with a large number of employees. Tensions resulting adverse effects generated can cause a high degree of instability of employment, especially among persons governor. In the current labor force available, it is difficult to quantify the value of the unwanted rotation of personnel, but certainly it is hard to overlook.
What is the percentage of reducing stock after the implementation of an application (module) dedicated?
It is difficult to state a percentage solely due to a system. Because the methodology for implementation, all business processes performed within the organization suffers major transformations. The results are even more spectacular as the number of the portfolio is higher, as the company has several points of the managed sales force is spread across multiple divisions, etc..
What are the factors influencing these percentages?
Clearly a policy for efficient stock organization is the result of functional business processes to the whole company. These processes have the property that are, by their nature, interdepartmental. Without good communication between sales, purchasing, logistics, finance, marketing, you cannot hope to have optimum management of stocks. Naturally, factors which give consistency to results following the implementation of an system, have a rich variety:
1. Capacity of Funding / self funding
2. Dimension and quality of logistics infrastructure
3. Typology of products
4. Quality of staff
5. The impact of marketing activities
6. Sales Force Organization
7. The general business context on the specific market segment