Although the Wholesale Distribution industry is anticipating a 3.9 percent growth in 2018, strategies for controlling costs remains critical in this industry where tight margins are the norm. Warehouse automation and data digitization can help control costs strategically.
A Fin SMEs report describes why spending has become a common theme in the wholesale distribution sector. With many organizations facing tight balance sheets and limited revenue potential, companies must look to improve their processes in order to reduce costs and create a sustainable pathway to fiscal health.
Digitization and Cost Savings: What's the Relationship?
Implementing modern technologies in wholesale distribution settings isn't inherently going to reduce costs. Technology alone doesn't drive change. Instead, businesses need to identify their specific operational pain points and the demands their customers are making. From there, strategic investment in wholesale distribution software or warehouse automation systems can go a long way in driving growth.
"Implementing modern technologies isn't inherently going to reduce costs."
The FinSMEs article explained that properly understanding the full balance of expenses in wholesale distribution operations often becomes much more complex than one would initially think. In many cases, inventory issues are at the center of this problem, with organizations grappling to interconnect data from across operations. This creates a situation in which companies cannot gather and use the data needed to make better decisions. Warehouse distribution software can alleviate these problems by providing access to a variety of technology modules, including customer and supplier relationship management systems.
Enterprise resource planning solutions are also critical, the report said, as they take the systems from across lines of the business and put them into a single platform. Where warehouse distribution software simplifies end-user operations through dedicated tools for different tasks, an ERP system combines them, along with various business management systems, including accounting and sales systems, into a single ecosystem. This results in better reporting, clearer visibility into inventory levels and transparency into every facet of operations.
As wholesale distributors work to reduce expenses, they can use greater visibility into operations to eliminate waste. A few opportunities include:
- Optimizing inventory levels on an ongoing basis to avoid time wasted processing and managing unnecessary assets.
- Integrating vendor performance data with purchasing strategies to ensure you are working with the best possible supplier for a given job.
- Identifying problem areas in operations that lead to damages, errors or similar issues.
- Discovering supply chain problems that could lead to delays or long-term disruption early in the cycle so you have time to adapt.
All of these benefits are possible with the right data. Warehouse management and automation systems, when paired with an ERP solution, are particularly valuable in providing these insights. However, it is important to recognize these platforms are only as valuable as the data they receive. You must also empower users to gather information effectively.
Mobile Data Collection as an Innovation Catalyst
Integrating and coordinating data across operations is only helpful if you have the right data in the first place. If your workers on the factory floor can't scan goods when they arrive on site, but must wait until they perform cycle counts, for example, then there will be a gap in your visibility. If you're using paper-based processes and logging data digitally further down the line, you'll face a major time delay and potentially run into data accuracy problems.
Mobile data collection software plays a critical role in helping organizations get the information they need quickly and accurately which enhances their warehouse management and ERP systems value. For wholesale distributors trying to reduce costs, the technology can not only serve as a key enabler for making other solutions valuable, it can also improve day-to-day operational efficiency. RFgen is a leading supplier of robust data collection solutions that integrate with multiple ERP systems. Contact us today to learn more.