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Food Distribution Software – Good Systems Enable Your Food Retail Customers to “Have it Their Way”

Tuesday, June 2nd, 2009 by admin

One of the ways in which businesses can elect to compete is through a strategy of customer intimacy. In other words, enabling companies to make it so easy for their customers to transact business with them that they’d be fools to go anywhere else. So, let’s explore how a customer intimacy strategy applies to the food distribution industry and how a strong food distribution software solution can enable a business to achieve a sustained competitive advantage.

First, there are a multitude of methods by which orders can be placed in the food distribution industry. Of course, there are the traditional tried and true methods of phone and fax orders, where customer personnel speak with their vendor’s customer service or sales representatives or fax in their orders respectively. When phone orders are taken, good food distribution software solutions enable the customer service or sales representative to take the order in a rapid manner without slowing down the conversation with the customer. These systems can also present a series of other data including information about those products the customer orders most frequently and those products the customer has not ordered within their typical frequency. By doing so, there can be opportunities to upsell the customer or prompt the customer to remember to include additional SKU’s on the given order.

Additionally, there is an entire series of electronic means by which customer orders can be captured and entered into the supplying food distributor’s ERP system. These methods include traditional EDI processing, Web data entry via the supplier’s Web site, and several means by which handheld devices can be leveraged. Relative to handheld devices, if the vendor is performing direct-store delivery, the sales or delivery person can capture information about what products are needed in the next order directly in the customer’s store. Likewise, if vendor personnel are not directly in the customer’s stores on a day-to-day basis, the vendor can provide handheld devices to their key retail customers so customer personnel can enter orders directly into the handheld units as they walk the retail floor. These orders are transmitted directly into the food distributor’s inventory control system for replenishment.

Order acknowledgements and advance shipping notices (ASN’s) can be tailored on a customer-by-customer basis as well. Order acknowledgements can be delivered to food retailers via email, fax, or EDI. ASN’s can be sent by food distributors to their retail customers alerting them as to what products are being delivered associated with a given shipment.

Food retailers can have their vendors perform additional value-added services on their behalf to reduce requirements for internal operations at the retailers and speed product to the shelves. Unique product labeling and retail price marking are two relevant examples of value-added services food distributors can perform on behalf of their retail customers via good food distribution systems.

When the given distributor performs direct-store delivery, the electronic notification of the product delivered can be provided and an electronic proof-of-delivery can be captured which can be provided to the retailer. When shipping is done via common carrier, retailers may elect to have their distributors mark the product for store-level delivery though the actual physical delivery may occur via a retailer’s distribution center. This, too, will help to speed product to the shelves for consumers.

Finally, after the transaction is completed, delivering clean invoices is another element of delighting the customer. Whether these invoices are printed and delivered at the store via a mobile printer, delivered electronically at the point of delivery via DEX processing, printed and sent from the food distributor’s back office operations, or delivered out of the food distribution system via EDI processing, customer transaction processing can be tailored easily to customer preferences (or demands).

Food distributors can become invaluable partners to their retail customers through a combination of strong processes, systems, and technology. TGI’s Enterprise 21 ERP, which can be leveraged with Versatile Systems’ Mobiquity Route™ for direct-store delivery and route accounting, provides food distributors with the opportunity to establish and maintain a competitive advantage in their respective marketplaces.


Gaining Visibility to Key Performance Metrics in the Distribution Industry

Friday, May 15th, 2009 by admin

In a recent survey research paper titled, “Technology in Distribution: Trends and Future Challenges,” Adam J. Fein, Ph.D., founder and president of Pembroke Consulting, Inc., discusses, among other things, how many distributors across various industries lack the ability to track key performance metrics. The specific key performance metrics evaluated in Dr. Fein’s research include gross profit by customer, average order size by customer, operating profit by customer, delivery performance by customer, and profitability of fee-based services.

While executives from various distribution industries report mixed and, in some cases, disappointing results in their abilities to access such information, distributors using TGI’s Enterprise 21 wholesale distribution software can readily gain access to these and other key performance metrics. While Dr. Fein’s research paper focuses on the distribution industry, manufacturers who run the Enterprise 21 system can also leverage its business intelligence software capabilities to gain a competitive advantage.

By leveraging Enterprise 21’s business intelligence functionality, executives and all system users can have their own personalized dashboards consisting of the information that is most important to their day-to-day operations. Each individual’s dashboard in Enterprise 21 can consist of an infinite number of tabs with up to four information panes per tab. The information panes can include data displayed in graphical and tabular formats. Some of the graphical views available include pie charts, bar charts, area charts, and gas gauges, which allow executives and other system users to enjoy rapid access to key performance metrics.

Furthermore, while individuals can view summarized data in their dashboards, Enterprise 21’s business intelligence capabilities enable individual dashboard panes to be opened in full analytical drill-down mode, so users can slice-and-dice the information for further analysis purposes. This slice-and-dice capability enables executives to start with a broad brush view of their operations while being able to drill down in detail to pinpoint opportunities for continuous improvement within their organizations. In addition to being able to review and analyze operational data within Enterprise 21, executives can also have financial reports delivered to their dashboards, providing them with a consolidated electronic management book with easy access.

Through the use of Enterprise 21’s business intelligence functionality, executives can efficiently manage their organizations by gaining immediate, consolidated visibility to key performance metrics through individualized dashboards. By leveraging Enterprise 21’s analytical slice-and-dice capabilities, executives can readily identify opportunities for improvement which can lead to increased bottom-line results.

For additional information about Enterprise 21’s business intelligence capabilities and to further review how distribution and manufacturing executives can gain improved visibility to their organizations’ key performance metrics, please view an overview demonstration of Enterprise 21’s business intelligence functionality by clicking here.


Wholesale Distributors Enjoy Flexibility When Implementing Enterprise 21 Warehouse Management Functionality

Monday, May 4th, 2009 by admin

A common discussion we have with wholesale distributors revolves around how they can best implement Enterprise 21’s warehouse management system. The great majority of these distributors envision moving to a completely paperless warehouse environment where warehouse workers are prompted via handheld and fork lift-mounted devices to perform the next highest priority task in their work queues.

Prior to moving to Enterprise 21, all of the distributors with whom we work were using some form of paper in their warehouse operations. Most of these organizations had their warehouse personnel writing on paper pick tickets as they went through the picking process and had the data electronically entered into their existing legacy systems hours later. Others may have been using a combination of paper and some scanning when they initially approached TGI.

In the case where there was manual recording of results, a paper pick ticket was printed and associated with each given sales order. Warehouse personnel would take the paper pick ticket, walk through the facility, and pick the items associated with that order. As the workers picked the order(s), they wrote the results of their efforts on the paper pick ticket, especially noting any places where there were discrepancies in the number of items picked or locations from which they picked. Some time later (and in many cases, much later), warehouse operators gave their hand-written picking results to an administrator for keying this information into their legacy system.

This paper-based process presented several challenges. First, there were delays between the time the physical transactions occurred and when those transactions were recorded into the system. Second, the one who recorded the data into the system was frequently not the same person who performed the physical transactions. In this case, there were opportunities for recording incorrect data when the written results were illegible and the data entry person made his or her best guess as to what was recorded. Because of these practices, the information in the computer system was inaccurate and generally not trusted. By moving to a real-time inventory system, such as Enterprise 21, where transactions are recorded in the system at the point and time in which they occur, inventory data becomes more accurate and timely.

In addition to improving inventory accuracy, distributors can take advantage of more efficient warehouse processes in Enterprise 21. One of the major advantages that organizations who ship a lot of small package deliveries can gain from Enterprise 21 is moving to a cart picking process. When doing cart picking, rather than performing picking on an order-by-order basis, warehouse personnel can perform a consolidated picking process for multiple orders concurrently, thus reducing labor consumed compared with picking each order on its own. Once a cart picking process is completed, the cart is moved to a packing location where the various orders on the cart are packed and prepared for shipment. Enterprise 21 can also enable warehouse operations to take advantage of other warehouse efficiencies including zone picking and wave picking.

The warehouse management software functionality in Enterprise 21 is fully-integrated with the entire Enterprise 21 ERP software application. Since this functionality is built into Enterprise 21, TGI customers do not have to try to keep separate systems in sync with each other or have to worry about what will occur to their ERP to WMS interface when they upgrade one of these systems.

A major advantage of Enterprise 21’s warehouse management system is that new TGI customers can elect to start their initial operations at system go-live at any point on the functionality continuum, from printing of paper pick tickets and manually recording the data to fully paperless operations. Over time, distributors can continue to streamline their operations and take advantage of more and more of the process efficiencies afforded by Enterprise 21.

By implementing the warehouse management functionality in Enterprise 21, distributors can improve inventory accuracy and gain operational efficiencies in a manner that can best be assimilated into their warehouse operations.


The Secret to Increasing Distribution Service Levels and Fill Rates

Wednesday, March 25th, 2009 by Alex Smith

A key element to the success of wholesale distributors is to simultaneously manage appropriate inventory levels while maintaining high levels of customer service and satisfaction. Depending on the reliability of the distributor’s supply base, performing these tasks effectively may seem virtually impossible. Achieving desired service and order fill rate goals is based on the successful implementation of an effective inventory replenishment program. While the concepts of inventory replenishment, service levels, and order points have been used for decades, the number of distribution companies who understand and utilize these concepts is significantly lower than one might imagine. The fact of the matter is that most distribution companies struggle with inventory optimization.

While there are complexities in the details, at an overall level, smart distribution companies are focused on delivering the highest possible service levels to their customers while minimizing on-hand inventory. For distributors, long-term profitability is contingent upon having the right products available to meet customer demand at the right time. If this concept is so elementary, why do so many companies struggle with establishing optimal inventory levels, and why do distributors struggle to have adequate product supply to fulfill customer orders?

The two-word answer to this conundrum is “service levels.” Excellence in distribution is synonymous with the ability to supply customers with a high service level that is both consistent and reliable.

What is a service level? Service level refers to an organization’s ability to enter and ship all of the items requested on a given sales order to meet the customer’s desired receipt dates. This means there are no inventory shortages or backorders, and the order is filled within the customer’s requested delivery window.

In TGI’s Enterprise 21 ERP system, a service factor can be defined by item or SKU, which defines the desired line item fill rate for that given item. Service factors can be set on a global basis or can be defined uniquely by location or facility. For some fast-moving items, a service factor of 95 or 99 may be desired, while others may require much lower service levels of 50 or 60.

How does Enterprise 21 use service factors? Once a service factor is defined – by SKU – Enterprise 21 uses the service factor in its time-phased inventory replenishment process. In Enterprise 21, a service factor of 95 implies that 95% of the time a customer places an order for a given item, the item can be shipped out of inventory, while a service factor of 99 means this is to occur 99% of the time.

In Enterprise 21, the inventory replenishment process analyzes supply and demand to help distribution organizations improve order and line item fill rates and optimize their overall inventory management performance. The process considers a variety of criteria such as desired service level and safety stock, minimum and maximum inventory levels on a product-by-product basis, on-hand inventory, forecasts and current customer demand, supplier lead times, minimum order requirements, and order multiples. In organizations with multiple facilities, Enterprise 21 can review requirements for an individual warehouse or distribution center and for the organization as a whole. Once the Enterprise 21 system’s inventory replenishment process calculates the necessary recommended replenishment quantity, the application generates online requisitions for review and conversion into purchase orders and inventory transfer requests.

What further sets Enterprise 21 apart is the continuation of this process to gather transactional data as things occur and to report on that information for analysis purposes. An integral part of Enterprise 21’s distribution software functionality is the ability to monitor service levels automatically and produce suggestions for necessary changes to existing replenishment rules. By interactively collecting and analyzing information such as order and line-item fill rates, Enterprise 21 produces reports and management alerts to notify the organization of any anomalies compared with existing service level metrics.

Successful distributors know the key to ongoing and improved profitability is due in large part to managing the balance between customer service and inventory levels. Enterprise 21’s advanced inventory replenishment capabilities, including the use of service factors, are just one of the reasons leading distributors adopt Enterprise 21 for its complete distribution software capabilities.