I recently spoke with a small business owner who provided me with a piece of information I previously was unaware of. The small business owner said that his company had started running QuickBooks approximately three years ago when the business was just in its infancy. The business grew rapidly, increasing its customer base and its product offerings. One day, the business had reached a total of 3,501 products in its catalogue. When the QuickBooks user entered the 3,501st product, the software informed the user that the entry was invalid, as QuickBooks would only support a maximum of 3,500 total products. When the small business owner called customer support, he was told he needed to upgrade to QuickBooks Enterprise Edition to allow him to enter more products. I, needless to say, was shocked. Believing that his business was not ready to migrate to a more sophisticated distribution software system, the owner spent $3,000 to upgrade to the Enterprise Edition for the privilege of adding new products, which, according to the owner, was simply a waste of money.

This pricing scheme for varying degrees of standard software functionality should be a lesson to all small business owners as they consider migrating from their existing small business software to a more sophisticated ERP software solution. Owners should pay careful attention to a software solution’s pricing structure and the software’s limitations at each price level. By requiring software vendors to disclose the true cost of all demonstrated software functionality before contract signing, the small business owner will receive the most accurate cost estimate to be used for budget and ROI calculations.

A key functional element to any wholesale distribution software solution is an integrated warehouse management software system that provides distributors the ability to operate their warehouse in a completely wireless, paperless environment. A wireless warehouse that utilizes RF and barcode technology can streamline warehouse processes, decrease the likelihood of data entry errors, and improve worker productivity. While there are hundreds of benefits to a wireless warehouse, here are three:

Directed Picking. Directed picking utilizes RF devices to prompt warehouse workers to pick items using an optimized picking path that reduces overall time spent during the picking process. Rather than a warehouse worker simply looking at a pick ticket and traveling around the warehouse in a completely random order, the RF device can instruct the worker to pick items on a pick ticket from their associated locations within the warehouse in a logical sequential order that reduces worker transit time from one location within the warehouse to another. This feature can streamline the pick process and reduce average picking time to improve warehouse efficiencies and lead to increased worker productivity and daily shipping volume.

Accurate Data Entry. Using RF and barcode technology can greatly decrease the likelihood of data entry errors in receiving, picking, and shipping. Lot numbers, for example, which can frequently be several characters long, can easily be scanned and recorded in the ERP system via barcodes and scanning devices with little to no manual data entry. Deploying these devices for use in the warehouse for receiving, picking, and shipping can result not only in faster, more efficient data processing but improved data integrity and product tracking as well.

Faster Physical Inventory and Cycle Counts. A common process many distributors deploy for physical inventory and cycle counts is to have a warehouse worker walk throughout the warehouse with a clipboard and piece of paper, manually count and record the quantities of each product in the warehouse, walk back to his or her computer, and then manually enter the recorded inventory quantities into the organization’s software system or Excel. This process, needless to say, can lend itself to a number of problems. First, manually counting and recording inventory quantities takes a painful amount of time for people in the warehouse. Secondly, manually counting and recording inventory quantities on paper and then entering those values into the computer increases the likelihood of data entry errors and diminishes the integrity and accuracy of the counted values. By using barcodes and scanning devices in the warehouse, workers can complete their physical inventory and cycle counts in a timely, efficient manner. Furthermore, by scanning items, the recorded quantity of items is directly recorded in the ERP system, eliminating multiple steps to complete the same process while simultaneously improving data accuracy and integrity.

A functional requirement that is often overlooked when selecting a distribution software solution is fully-integrated e-Commerce software functionality. In addition to providing more methods to customers to place orders, e-Commerce functionality can significantly improve software return on investment (ROI) for wholesale distributors by reducing the need for excessive order entry personnel and decreasing the call volume to customer service when customers want to track the status of their existing orders.

When evaluating a given vendor’s e-Commerce software solution, there are some key criteria the vendor’s software solution must meet. First, data that is displayed on the Internet through the e-Commerce portal should be pulled directly from the distribution software’s database. For example, when Customer A has Price A for Product A, and Customer B has Price B for Product A, each customer’s specific pricing for Product A should be displayed when they place a web order based on the customer’s log in ID for the e-Commerce portal. Customers should also then have the ability to track the status of their orders and view their order history.

Secondly, the vendor’s e-Commerce software should deliver functionality that is capable of providing relevant customer and product information to sales representatives. For distributors who have sales representatives who place customer orders while at a given customer’s facility or from the road, such functionality can improve customer service and sales revenue. A given sales rep should be able to log in to the distributor’s customer portal and be able to obtain customer information such as pricing, order history, total sales, any outstanding accounts receivable, etc., as well as product information such as available, on hold, and committed inventory.

Lastly, distributors should be able to tailor the e-Commerce software solution to have the same look and site architecture as the distribution organization’s website. While the software that is used to create pages such as an organization’s home page and contact page is different than the e-Commerce software that is used to place and track orders over the Internet, the aesthetics of the website should be completely transparent to site visitors.

Assuming the software vendor’s proposed e-Commerce solution can meet these criteria, distribution organization’s can continue to gain a larger return on investment from their purchase of an ERP system. By allowing customers to place orders over the Internet, distributors can begin to cut costs that were formerly associated with customers placing phone or fax orders. With fewer orders being placed over the phone and a larger percentage of orders coming through e-Commerce, distributors can reduce the need for excessive order entry personnel due to the automated order entry processes an e-Commerce solution can deliver. Furthermore, by allowing customers to track the status of their existing orders and view their complete order history via e-Commerce any time of the day or night, fewer calls will be made to the customer service department regarding order inquiries. Again, this can lead to a reduction in customer service personnel by readily providing such information to customers over the Internet and a tangible ROI for the distribution organization.

To view an interactive demonstration of TGI’s Enterprise 21 eCommerce solution, please click here.