Through a combination of hardware, such as RF devices, and software, such as NetSuite, smaller distributors are gaining a competitive advantage by investing in technology that is designed to streamline their warehouse operations. Australian wholesalers are fast catching up with retail managing their operations more effectively while making informed decisions about shipping, staffing, accounting, demand planning and warehousing.

What is warehouse automation?

Warehouse automation is the use of software and technology to support your warehouse team in their mission to pick, pack and ship your customers orders as quickly and efficiently as possible. This type of technology is designed to streamline the operations of your warehouse, as well as reduce costly errors. Traditionally warehouse automation technology was used by large companies, such as Amazon and Coca-Cola; however, modern cloud ERP is bringing the benefits of what was traditionally large scale software to small and medium-sized wholesale distributors.

What is an automated storage and retrieval system?

Automated storage and retrieval system (ASRS) is the combination of machines and execution software to move product in and out of the storage unit without any human supervision. These machines use sophisticated technology and integrate with a distributors ERP system to minimise human intervention in the picking process. Overhead storage units, by manufacturers such as Hanel, allow distributors to automate their picking process and take advantage of the overhead space in their warehouses.

Ten Benefits of warehouse automation

2. Maximising space

One resource that is not often considered is that of overhead storage. The footprint of your warehouse is finite, and without costly extensions, this cannot be increased. Warehouse automation allows for practice use of overhead space by using machinery and technology to automate the retrieval of inventory items stored at height. In addition to this, depending on the location of your warehouse, more often than not, the cost of extending up, instead of out is usually far less.

How does it maximise space?

Majority warehouse automation systems include robots or other machines that collect products and store them. It means that there is no need to send people to aisles, which could remove the need for wide aisles that accommodate large spaces with a wide turning radius. Automated warehouses have unique movable shelves that can move goods around on a pallet. However, they tend to take up more space than a pallet, whilst a robot needs less room for maneuvering. This automation logic means that you can install products with smaller aisles, which can create more space for storage.

5. Accuracy

Accuracy in the warehouse business is no doubt necessary; it helps reduce errors in dispatch, which result in returns and extra administration. Wholesalers who use ERP technology and warehouse automation software see drastically lower errors in picking, packing and shipping and report higher levels of customer satisfaction and repeat business.

8. Accurate analytics

Automating a warehouse is a short-term investment on time and labour, however, the additional data being captured by the system gives wholesalers access to better analytics and information about their business which empowers strategic decision making.

This knowledge helps in taking your business to the next level as you can share real-time data to managers, gain insights into your business and identify key areas of improvement.

10. Better Inventory Control

Features in ERP technology, such as demand planning help a wholesale distributor by providing intelligent suggestions as to what to order, by using the data in the system to calculate expected supply and demand plans.

Cloud-Based Warehouse Software

A cloud-based warehouse management system (WMS), such as NetSuite makes sure all warehousing operations are executed smoothly. NetSuite tracks data in real-time, which can help managers get instant notification of inefficiencies or errors in the business and correct these to ensure continual improvement of operational efficiency. The advantage of the cloud is also the ability to connect your ERP other automation technologies such as robots, conveyors, overhead storage and other machines through API technology that interacts with the Internet of Things.

Gigant Chinese retail Alibaba, ramped up robotic labour in 2017 in one of its warehouses, cutting down the workforce by 70%. Robotics will continue to have a significant impact on the supply chain. Choosing a platform that eases automation will enable wholesalers to adapt to future trends, move quicker than the competition, manage their operations better and target strategic growth with informed decisions.

Wholesale distribution has emerged as one of the top performing industries in terms of cloud technology take up. This early adoption, when compared to other industries such as professional services or manufacturing has seen Australian wholesale distribution business bounce back from a period of shrinking margins and red-ocean competition.

Most distributors over the past 5 years have either evaluated or implemented some form of cloud technology in their business. One of the main drivers for these software packages is to be able to collect more customer, inventory, operational and supplier data to increase efficiency and effectiveness of their resources.

Now that they have the data, the key question is… What should they do with it?

10 Years ago, Wholesalers relied on some basic reports and metrics to identify whether their business was healthy and growing or struggling. KPI’s such as inventory turnover, accounts receivable aging reports and dead stock reporting were common. In 2019, Wholesalers are becoming more sophisticated in the metrics they are using to measure themselves and the results are sometimes surprising.

The following KPI’s are some of the key metrics our customers are using to measure their performance and continual operational improvement.

Financial KPI’s – A New Take on Financial Performance Management

In Wholesale, as in any business, keeping a keen eye on the past, current and future financial performance of the business is key to continued growth and ongoing success. However, owners are looking beyond traditional reports and KPI’s such as gross margin on items or inventory turnover velocity when it comes to making critical business decisions.

Modern Finance Managers are looking to use the data that is collected during marketing, sales, order processing and customer service and support to gain better insights into key business drivers and performance metrics. An example of this could be:

Sales and Marketing KPI’s – Looking Beyond Top Line Sales Performance

Traditionally, most sales departments are defined by one thing. Actual Sales against quota. However, because modern Wholesale Distribution software provides integrated Sales and CRM functionality, along with procurement/inventory management and accounting and financials, we can now do more with the information we have available.

HR and Payroll KPI’s – Measuring People and Performance

Because modern ERP’s like NetSuite, provide fully integrated time sheet entry, employee expense management and payroll processing, HR and Payroll Managers are able to use data across both employee records, payroll data and other key business areas to better understand key HR metrics such as “average sick leave days by manager”.

In businesses with a higher number of managers, it can be very insightful to understand employee behaviour when compared by manager. These sorts of KPI’s might provide some insights into team motivation or highlight potential HR problems before they are reported and escalation, or worse, not reported.

Customer Service KPI’s – Keen Eyes on Customer Success

In an increasingly competitive market, customer service is imperative. Google has made it easier than ever to quickly research and compare different providers of the same or similar products, and sometimes you might not be able to compete on price alone. Many wholesalers are beginning to understand that customer service has just as much impact of purchasing decisions as price.

To be able to better understand your customer, and to use this information effectively, wholesalers should be looking to get a 360-degree view of their behaviour both when it comes to purchasing and support and complaints.

An example might be:

Can your system support these KPI’s? If not, is it time to consider a new direction?

Many of our customers are making great use of these NetSuite features and have taken monitoring their business performance beyond to standard metrics that are available in legacy systems, and the results are amazing.

Wholesale distributors today confront significant challenges to meet B2B customer expectations, increasingly distributed supply chains and higher pressure on margins. Additionally, new opportunities in mobile computing, the Internet of Things and globalised customer databases, present their challenges. NetSuite provides innovative distributors with a complete and connected business suite with scalable, intelligent, easy-to-use features that link together financials, eCommerce, inventory and customer data—enabling them to transform their business and track every operation in a single management console.

Accounting software like Xero provides outstanding functionality for small businesses, however, as they grow, software limitations become a daily frustration and sink managers in a sea of additional systems and apps to fill the gaps.

Entry-level software packages in the long-run create disparate siloed data and heavy overheads around all areas of administration in the business. NetSuite is the leader in Cloud-ERP for Wholesale and Distributors, unifying some of the world’s leading wholesalers’ systems in a single cloud solution.

If you’re feeling lost with a poorly integrated network of disparate legacy-systems read on to find out how your growing business can consolidate all business management into a single Business Management Platform (BMP).

Growing into Small Business ERP with SuiteSuccess

SuiteSuccess Wholesale Distribution Edition is a Best-in-Class Oracle+NetSuite product that is revolutionising the way that small and medium-sized distributors upgrade from entry-level accounting packages to unified ERP systems. SuiteSuccess is an out-of-the-box NetSuite Edition, pre-built with the leading practices for a growing wholesaler, incorporating tailored dashboards, custom fields, roles, workflows and more.

SuiteSuccess is the ideal solution to streamline your Inventory Management, Demand Planning, Work Order Management and more. Leaders in distribution world-wide have already adopted these latest technology as it provides real-time information, access from anywhere in the world, and a better end user experience.

The rapid implementation model is only possible due to the leading-practices business intelligence built into the platform. Hours of implementation and scripting effort have been bundled into the platform from the first day, which means customers and implementation partners can focus on loading customer, vendor, item and inventory data into the system, and move into testing without having to build the system from the ground up.

What builds NetSuite SuiteSuccess core?

NetSuite has dominated the Wholesale Distribution space for the last two decades. With the combined learnings of thousands of implementations, NetSuite has has developed SuiteSuccess, a new methodology focusing on four key areas:

How do you know if SuiteSuccess is right for you?

There are four common situations where a SuiteSuccess rapid implementation provides a superior experience for customers:

2. Your software limits your growth.

Legacy systems are preventing you from acquiring new business, or improving current processes to allow for the management of increased demand. Your business model has changed, and existing processes and procedures do not translate to the new business strategy.

4. No real-time business transparency.

 You do not have internal knowledge of best practices. You’ve lost staff in the business that help key knowledge in business operations. Reporting is difficult and specialised that consumes many business hours. 

If you are facing any of the above challenges, get in touch with one of our SuiteSuccess experts to help guide you through an evaluation of Xero vs NetSuite.

Do you need to fulfil orders more quickly and accurately? Do you struggle with inventory accuracy? Do you need real-time visibility into your warehouse operations? Do you know what your workers are doing?

In 2018, Wholesale Distributors have more choice than ever when it comes to automating processes in their businesses. Smart distributors have already begun their digital transformation and are seeing the benefit in their bottom line.

Whilst managing a warehouse can be complex and challenging, due to the nature of the industry, and the repeatability of processes there is vast opportunity to identify critical points of automation that will minimise the manual efforts of workers and provide considerable benefits in the long term.

1. Single Platform Technology.

Throughout the 90s and early 2000s Wholesalers were encouraged to seek “best of breed” software for each core business area. These areas include:

• CRM
• Marketing
• eCommerce
• Warehouse management software
• Inventory Control
• Accounting and Finance

Fast forward to 2018, and what we are seeing is a cluster of legacy software systems that try to communicate with each other through costly and time-consuming tailor-developed connectors.

The problem is, these connections, or APIs, between packages, need to be maintained to keep the whole ship running. Upgrading any piece software to a new version can produce errors with the customised APIs, causing ripple effects throughout the entire business.

Wholesalers are learning that this approach to IT Systems strategy is flawed and will only worsen as they continue to grow. Systems like NetSuite provide distributors with a cloud-based, end-to-end business management platform. This Includes:

Without the need to worry about maintaining API connections, both small businesses and large distributors can simplify their strategy. A single platform empowers leading wholesalers to move goods more efficiently, expand their distribution channels, and monitor their performance in real time.

In addition to this, modern platforms that hold information in one place, allow the inclusion of key inventory turnover data with accounting data to build powerful demand planning models and improve inventory turnover.

2. Electronic Data Interfacing (EDI).

EDI is the technical term for connecting the systems of vendor and customer. This interface minimises the amount of manual effort required to manage invoicing and purchase orders. 3PLs or 3rd Party Logistics can also be connected to a transportation management system to automate transfer shipping and delivery information fully. This transformation makes a huge time saver for distribution businesses. Now that back office staff have less paperwork to complete, they can focus their time on differentiating their customer service and improving the business process.

In a world of increasing connectivity, any company that sells products has massive amounts of product data to manage. It is essential to collect and analyse, by example, information provided by vendors such as:

• materials handling guides
• wholesale price updates
• item availability
• live customer portals.

Recent trends in the wholesale industry show that leading businesses turning to technology are spending less time in their day to day operations. This simplification gives more time to spend on the overall business growth strategy. EDI is one example of how a small wholesale distributor can massively expand its ability to sell products to a broader distribution channel.

3. RF Devices.

RF Devices have been around for a while, and provide a mobile point of data capture to simplify warehouse operations. Traditionally, RF Technology was sometimes attached to inventory management systems but provided limited connection to other platforms such as CRM and Accounting. By siloing this information, the ability for distributors to get real-time, 360-degree visibility of their warehouse operation was limited.

Linking the RF Device technology to a complete business management platform increases the efficiency and accuracy of data collection. This depth in data goes far more extensive than the warehouse floor itself. Through scanning, the level of precision in warehouse operations and data capture increases drastically.  Distributors can expect to upgrade the speed of their pick, pack and ship process, which means, more orders get processed requiring fewer warehouse workers.

A suitable RF software will include inventory processing and control and minimise paperwork in the warehouse. It will also provide live information about bin locations and item availability and speed up item put-aways. Leading distributors who do assembly builds pre-shipping are having better control over the work order management process and have total control of the current status of their work orders.

RF Smart is a Mobile Warehouse Management Solution built on the NetSuite Platform. RF Smart provides users with greater control over their warehouse operations and mobile points of data capture, which all fed directly into the ERP and accounting systems.

Where to from here?

In summary, Wholesalers have more choice than ever when it comes to investing in technology that will improve the efficiency of their processes and the effectiveness of their teams. Simplifying these processes means a growing distribution can take more orders, process them much quicker, and provide a distinguished customer service.

In an increasingly competitive landscape, the customer is king. We are seeing businesses that are taking the time to make this important differentiation are noticing significant improvements in satisfying happy customers and increasing repeating customers.

NetSuite is the world’s leading cloud-based wholesale distribution management solution and has helped thousands of distributors revolutionise their operations and grow. Also, SuiteSuccess Wholesale Distribution Edition provides wholesalers with a pre-configured version of NetSuite that has taken the leading practices of thousands of distributors across the world. SuiteSuccess is a rapid implementation which is seeing customers live with an end-to-end solution in as little as 45 days.

Legacy, detached and out-dated solutions used by Australian wholesale distributors create a barrier to innovation and growth. These types of software increase IT costs and reduce business efficiency. A fully integrated Enterprise Resource Planning (ERP) software offers a complete solution to support wholesalers and distributors to lead, pioneer and differentiate in a newly disrupted industry.

The Wholesale and Distribution market is shrinking.

Inside FMCG magazine in the article: “What is driving wholesale bypass?” talks about the new challenge for wholesalers: e-commerce is reshaping the entire economy rapidly. We are seeing an end to wholesale as it is now. Wholesalers and distributors, who act as “middleman” between manufacturers and retailers, have suffered a weighty decline in revenue. Every day more businesses abandon distributors to use direct e-commerce solutions.

In 2017-18, Australia grocery wholesale revenue is likely to contract 0.6 per cent. Footwear wholesaling profitability has dropped over the past five years and is expected to reduce by a further 3.2 per cent. Online clothing stores weakened the demand in traditional channels, reducing retailer’s need for wholesalers. Their revenue is expected to fall by 1.0 per cent. Toy and sporting goods wholesalers shared the same difficult conditions and expect a 1.4 per cent decline in revenue.

What are leaders in the wholesale and distribution industry doing?

Kara Kennedy, in a blog for G2Crowd titled: “The State of B2B Australia Tech in 2017” wrote that Australia ranks No. 5 on the GEDI’s “Global Entrepreneurship Index.” She explains this high ranking shows that Australian display entrepreneurial attitudes towards technology adoption. This culture is supported by the Australian government’s digital agenda which encourages non-tech companies to pioneer and embrace evolving technologies. There is a big focus on digital innovation. The government aggressively pushes initiatives to include pathways for doing business with modernising technology.

Traditional wholesale distributors, who might be struggling in the Australian market, are called to invest in business management technologies. Pioneers are experiencing much more success in this tight market. In MDM’s survey: “The Outlook for Wholesale Distribution in 2017”, 52.4% of Australian wholesale distribution companies surveyed stated that they were already in the process of upgrading their systems. A further 20.3% was updating by the end of the year 2018.

52% of wholesale distribution businesses are migrating to fully integrated and centralised ERP software solutions. Wholesale distributors in Australia search for specialised software vendors to develop cloud-based software, rather than several disjointed systems.

ERP systems broadly let them manage everything from financials and accounting to warehouse management, supply chain, inventory and demand planning to sales and marketing. Having all their business processes in one place, accessible everywhere in real time allows them to focus on their differentiation strategies and planning.

“There is a real need for wholesale distributors to invest in pioneering management systems. Businesses must address this as a priority. The future is becoming ever more digital. If you aren’t on board, you’ll be left behind. Having a digital platform is not a differentiator anymore, it is the standard. Efficiency and centralisation in a good ERP system, are now the keys to get that customer service differentiator.” says Michael Dean, Business Consultant at Klugo.

Richard Kloé, Managing Director at Headland Machinery, explains: “using NetSuite cloud technology gave us a competitive edge to lead in an incredibly tough market. Wholesale distributors must adapt to the fast and disrupting changes in the industry. Only state-of-the-art wholesale distribution software will give them freedom and ease across multiple channels. Technology like this can make a difference to drive success in a global economy.”

Benefits of Cloud-Based ERP Software Solutions

Carrying out manual sales processes, financial management and administrative tasks can take hours. With a cloud-based system, time-consuming tasks such as submitting sales orders from the field to the back office can be automated and finished in under an hour. Making these processes faster allows employees and managers to have more time to focus on the real business differentiator: customer relationships and building a strong customer experience. According to Accenture’s “Digital Disconnect in Customer Engagement” survey: 81% Australian consumers admit that it is ‘frustrating’ or ‘extremely frustrating’ dealing with a company that does not make it easy to do business with them. 55% have switched providers due to poor customer service.

“Cloud-based business platforms are changing the future of Australian businesses. We operate in a global economy – we can sell to anyone anywhere. We need to make the most of our smart inventory management software to help us lead the way in our region.” says Annaliese Kloé, CEO of Klugo and Managing Director of Headland Machinery.

Oracle NetSuite, in 2018, introduced to Australia their latest edition called: “SuiteSuccess” for wholesale distributors. This, out of the box software, puts together the leading practices of thousands of wholesale distributors around the globe. This knowledge base allows a fast implementation, saving time and money for distributors. The billable time spent explaining how to run their business, their accounting and inventory strategies disappears. It is quickly becoming the most affordable wholesale IT solution.

B2B customers act like consumers today: they prefer self-service tools with instant access to product information through their mobile devices. Business Procurement Managers are focussing on developing easy to use e-commerce websites. These managers search for fast or free shipping and immediate product availability. NetSuite is the Wholesale ERP that helps the leading Australian wholesalers to plan a perfect B2B omni-channel commerce customer journey. The platform helps to automate and deliver a consistent shopping experience with purchase orders that ship within a day or two. Businesses can provide sales that are accurate, complete, damage-free, easily returned, and competitively priced.

Running a successful small and medium-sized wholesale distribution business in Australia requires keeping pace with changes in technology, economy, workforce demographics, customer needs, pricing models, and more. These challenges often put distributors at a disadvantage to national or international operations. NetSuite’s SuiteSuccess fast implementation allows Australian business to maximise their investment. With NetSuite, they can see a quick return. With this technology wholesalers are leading within their industry quicker than ever before.

References.

G2 Crowd: Technology Research – B2B Australia Tech 2017
Inside FMCG magazine: What is driving wholesale bypass?
Accenture: Insight Digital Disconnect Customer Engagement

Seize Distribution Opportunities

The downfall of wholesale distribution has been highly exaggerated in recent years. Yes, manufacturers have more opportunities nowadays to sell directly to consumers, but there are two main reasons why distributors are needed now more than ever. Manufacturers’ supply chains often lack the scale, sophistication, and efficiency that most distributors possess, and reaching similar levels would incur major ongoing costs. Secondly, the direct-to-consumer model can cannibalise sales from channels that rely on wholesale distribution. For distributors, it’s all about seizing the opportunities in place in order to respond to consumer expectations with greater efficiency and agility.

Reducing Inventory and Operating Costs

To keep up with (and keep profiting from) changes in consumer demand, inventories must be low and operating costs need to be stable. This involves streamlining processes, automating systems, and doing whatever you can to minimise costs and delays. By using the right platform for your business, you can manage the growing complexities of wholesale distribution that manual methods simply cannot, and coordinate the three main areas of operation: inventory, deliverability and profitability.

Consumer Demand Changes Quickly

Consumers switch between products and brands. The quicker they do this, the more agile distributors must be at adjusting their inventories. Challenging and demanding, this cycle can be damaging to those who fail to align their supplies with demand. If stock is too low, sudden peaks in demand can mean that customers will go elsewhere. 41% of consumers in Australia say they would turn to overseas merchants if stock is unavailable locally.

Take a Lean Approach

Inaccurate orders and inefficient inventory utilisation can start to erode business margins and damage the ability to cater to abrupt shift in demand. Similarly, unused warehouse space or slow picking processes can further hinder distributors from promptly responding to consumers. Ultimately, these issues stem from lack of visibility into supply chain. If distributors can’t see the demand that products are experiencing, they’ll be in danger of taking a reactive stance which leaves little to no opportunity to operate in the agile, predictive way that manufacturers and supply chains need to grow sustainably.

NetSuite Inventory Management Software

Distributors need a system that comprehensively manages as many supply chain touch points as possible, but provides real-time data in a form that can easily be deciphered and converted to action. This is where cloud-based systems really excel, offering a platform for future growth and providing an integrated view of inventory movements throughout the supply chain all the way through to post-sales interactions. A key feature of NetSuite ERP is that it identifies “blind spots” in a distributor’s inventory; whether it’s the utilisation of actual inventory or planning for future demand. The better equipped that distributors are to predict future consumer expectations, the leaner and more agile their inventories will be. For more information, download the white paper below or get in touch with an expert.