Archive for the ‘Wholesale Distribution’ Category

One of the items we frequently run into working with manufacturing and wholesale distribution companies is the concept of attributed inventory.  More specifically, attributed inventory means that a given inventory item has a series of parameters (i.e., attributes), which further describe that item.  A very simple example that people can relate to is an item like a shoe, which would have attributes of size, color, and width.

Generally within legacy systems, manufacturers and distributors have fully described their inventory at a SKU level where every applicable combination and permutation of the product and associated attributes are specified for each given SKU.  Some may have decided to use intelligent part numbers in conjunction with this approach where their product ID might be SHOE-BLACK-12-EE for a black size 12EE shoe.

Alternatively, the manufacturer or distributor may decide to leverage attributed inventory within a strong ERP software solution.  In this case, the same product as above would have attributes defined as Color, Size, and Width.  Therefore, the product noted above would be SHOE with attributes of Color = Black, Size = 12, Width = EE.

While there are numerous ramifications to using attributed inventory rather than merely specifying product numbers for various combinations and permutations of items, one of the main advantages that can be managed easily with attributes is customer pricing.  As a simple example using the product of SHOE, if the standard pricing for a pair of shoes were $79.00 for all widths except EE for which there was an additional charge of $5.00 per pair, then pricing could be setup such that SHOE = $79.00 with the incremental pricing for Width of EE = $5.00.

While the above is a very simple example, when products have dozens of attributes, such as a steel coil, managing the product via any other manner besides inventory attributes would be impossible.  For example, one might specify the inside diameter, outside diameter, width, tolerance, etc. for the coil.

Even in cases where there are relatively simple products with a limited number of attributes, when companies embed the product configuration into intelligent part numbers they rarely are as straight forward as the example above – SHOE-BLACK-12-EE.  Instead, the coding process might be 1254-1C6, where the shoe is product “1254” with the next “1” meaning black, the “C” meaning “12,” and the “6” indicating “EE.”  The challenge is that using this type of part number is only passed along within the given organization via tribal knowledge, where employees only know the methodology through years of exposure.  This type of process makes it nearly impossible to easily train new employees to understand the company’s intelligent part numbering methodology.

Strong inventory management systems, such as TGI’s Enterprise 21 ERP, enable manufacturers and distributors to manage products in their preferred manner including via attributed inventory.  By using attributed inventory, these organizations make it much easier for personnel to perform sales, customer service, inventory management, and warehouse management functions rather than relying on an antiquated intelligent part numbering methodology.

Today, wholesale distributors are looking for ways to continue to protect their existing customer base, to hold or increase profit margins where possible, and to look for opportunities to grow their market presence through selling additional products and services to existing customers and by finding and attracting new customers with whom to do business.

One way in which distributors can continue to maintain existing customers and add new ones is by continually asking, “What can I do today to make it easier for my customers to do business with me?”  What is it that customers are looking for in the first place?

Customers want to buy the products and services they need from their supplier.  They don’t want to hear that their supplier can provide certain products from a given manufacturer’s product lines but can’t provide others because “we don’t stock those items.”  They may even be looking for suppliers who are willing to place consignment inventory of certain high-moving or highly critical stock at the customer’s premises for easy consumption.

Customers want straight forward and accurate pricing.  They also want to understand their suppliers’ ability to deliver the given products they’re looking to acquire in the time frame within which they need them.

Once they’re ready to place an order with their supplier, they want to be able to do so as efficiently as possible.  They want to be able to minimize their work efforts while providing their supplier the precise information they need to be able to receive the products in the exact quantity they’ve ordered, and to be invoiced exactly what they expect for those products.

Customers want to be able to choose their preferred methods of placing orders – either via eCommerce, EDI, fax, email, or phone – and want to get back an accurate promise date from their suppliers the first time, every time.  They likewise want to receive communications from their supplier in their preferred manner.

When the products they’re acquiring are delivered, customers want to receive the expected quantities on the date and time frame in which they were promised by the supplier.  They may also want their suppliers to perform value-added services including applying correct product labeling and price marking of the products to the customer’s specifications.

Finally, customers want to work with suppliers who can resolve any issues that may arise when transacting business together in an expedient, professional manner with a first-time resolution.  They also want their suppliers to take the data arising from problem resolution and make continuous improvements to minimize or eliminate the possibility of the given issue arising again in the future.  They want their suppliers to make it easy for them to get the information they need in the manner in which they need it to be able to transact and analyze their on-going business.

The bottom line is that customers are looking to do business with suppliers who “say what they do, and do what they say – period.”  Customers want to work with suppliers who are looking out for their customers’ best interests while continuing to grow their own businesses.  By leveraging wholesale distribution software solutions, like TGI’s Enterprise 21, wholesale distributors can meet and exceed their customers’ precise expectations.