ERP Software

Wholesale Distribution Software Optimizes Strategic Sourcing

In the day-to-day urgency of procurement in a fast-moving wholesale distribution environment, it’s easy to miss out on the smartest buy. Best practices are easily set aside, compliance with established rules and practices can be often ignored and not all suppliers globally are necessarily included in a process that’s simply not as competitive as it should be.

That can’t happen if you’ve implemented a disciplined strategic sourcing initiative, integrated into a powerful wholesale distribution ERP system. Negotiated savings spike upwards as sourcing and spending become more closely managed and monitored. More rigid adherence to RFQ processes and competitive bidding produces lower prices and more favorable terms. If multiple business units are involved in sourcing, purchases are flagged for aggregation. The savings that result from automating and integrating sourcing activity can be dramatic.

Wholesale distribution software streamlines end-to-end sourcing activities. For example, negotiated terms morph into vendor contracts that can then be leveraged across all procurement activity with that vendor. Integration means other departments, such as accounts payable and purchasing, are tied into the process to better manage vendor relationships and resolve issues more quickly and consistently.

Consolidation of suppliers strengthens relationships, simplifies transactions and results in the most profitable sourcing strategy. With wholesale distribution software, this process is driven by regular review of all suppliers against key performance indicators (KPIs) and by using comparison tools to weigh and award bids. The supplier list is constantly evolving in a continuous search for the best combination of quality and price.

Sourcing cycle times can be reduced through regular analysis of supply strategies and vendor performance. Distributors today source globally, which requires the added visibility into supply chain activity that ERP systems provide. The longer lead times required to engage more far-flung suppliers must be carefully managed to achieve the on-time delivery customers insist on. Risk can be reduced not just in the physical supply chain but in the financial supply chain as well. Tight integration means the entire requisition-to pay-cycle is more transparent and can be more tightly managed end-to-end, reducing errors and increasing opportunities to improve cash flow.

Wholesale distribution software promotes the collaborative business models and win/win vendor relationships that come about through heightened visibility and transparency of all interactions. Decision makers have access to real-time data from inside and outside the enterprise, information that can help them insulate the supply chain from supplier disruption, anticipate inventory shortages and avert fulfillment shortfalls that might erode customer loyalty.

Written by :

tracey boxer