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Archive for the ‘Wholesale Distribution’ Category

Wholesale Distribution Software: Big Productivity Gains Await Distributors Who Ship Small Package Deliveries

Monday, October 19th, 2009 by admin

Many of the wholesale distributors with whom we work have common characteristics when we first become acquainted with each other.  Many are selling items which can be packed and shipped via small package delivery services.  And, most of these distributors are performing their picking operations via paper-based print tickets on a one-to-one ratio – one sales order equals one pick ticket. Read More…

Some of the biggest operational efficiencies these distributors can gain from wholesale distribution software solutions like TGI’s Enterprise 21 come from combining and performing picking for multiple orders concurrently.  Within Enterprise 21, this functionality is called cart picking.

Enterprise 21 collects a series of picks for various sales orders based on the business rules a given organization defines within the system.  Once a pick is generated, Enterprise 21 leads the given warehouse operations person through the facility in an optimized path to minimize transit time between picks.  This can be done with either paper-based or paperless picking.

When cart picking is combined with barcode scanning, the Enterprise 21 system prompts the picker to pick a given quantity of an item from a specified bin location and to place that item in a specific tote or location on their picking cart.  When the first item is being picked, the picker scans the item and an associated tote location on the picking cart.  At this point, the system knows that a given order’s picks are associated with that specific cart location.  When the picker is prompted to pick the next item, if it is associated with this same order, they are prompted to place it in this same tote location.  Should they be picking an item for a second order, however, they would be prompted to scan a second cart location to be associated with the second order.

The system will continue to prompt the picker to place items into an associated tote location or to select a new location for the next order being picked.  Should the picker attempt to scan and place an item associated with one order into a cart location associated with a different order, the system will alert them that this is not the correct location for this order and once again prompt them with the correct cart location.  Once all the associated picks for the given picker-cart combination are finished, the picker would take the cart to the packing location.

Next, Enterprise 21 would prompt the packer as to which specific standard carton sizes should be selected for use for a given sales order shipment and which items should be placed in each given box.  The system would generate a carton label for each box.  As the packer scans the items into the given cartons, the system would confirm that the items were in fact associated with the specific order shipment being created.  As part of the packing process, Enterprise 21 also generates the desired shipping paperwork including packing slips and pro forma invoices.

Once the packing process has been completed and the cartons are sealed, the boxes would then be handed off to the shipping department.  Shipping would then run the boxes through the appropriate shipment manifesting systems (i.e., UPS, FedEx, etc.) and ship the various boxes.  Enterprise 21 is fully-integrated with these shipment manifesting systems, so the order status would be updated immediately upon shipment.  Enterprise 21 also generates all appropriate customer transactions resulting from the shipping process including delivery of an advanced shipping notification (ASN) in the customer’s preferred format and method of delivery (fax, email, or EDI).

The combination of Enterprise 21’s fully-integrated warehouse management system functionality when used in conjunction with RF/barcode-enabled scanning technology, including cart picking and wireless warehouse management capabilities, can lead to substantial improvements in warehouse operational efficiencies while minimizing shipping errors.

Food Processors and Distributors Require their ERP Systems to Enable Management of Items via Catch Weight Processing

Monday, September 28th, 2009 by admin

Food processors and distributors that produce and sell various meat-based products like those associated with chickens and turkeys have a unique need for catch weight processing.  Catch weight processing is used in wholesale distribution where the item’s actual weight varies from SKU to SKU. Read More…

An example of this would be chicken breasts, which could be processed and packed in four-packs for retail sale which are then shipped ten four-packs to the carton.  Let’s say, for example, the average weight of each chicken breast is 4 pounds.  However, the actual weight of the chicken breasts will vary piece by piece.

Therefore, when the retail four-packs are created, the actual weight of the four chicken breasts contained in that package is captured and recorded.  Then, when a series of ten four-packs is packaged into a carton, the actual weight of the chicken breasts in the carton would also be known and could vary from the average weight of chicken breasts in a carton.

Generally, while food processors’ and distributors’ customers would order and receive cartons of chicken breasts for retail sale or food service distribution, the associated customer pricing would be based on a per pound basis.  Therefore, strong ERP software systems like Enterprise 21 must enable food processors and distributors to record two quantities during key inventory transactions like production recording, packaging, and shipping – both the quantity of product cartons and the associated actual weight of the items contained in those cartons.

While retail and food service customers would place orders for a certain number of cartons of chicken breasts knowing each carton would contain ten four-packs with each chicken breast having an average weight of 4 pounds, the customer would be invoiced and pay a price per pound based on the actual weight of the chicken breasts contained in the cartons that were shipped to them.

Food processors and distributors can easily manage those products in their product mix requiring catch weight processing via Enterprise 21.

Inventory Management via Attributed Inventory

Monday, September 14th, 2009 by admin

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. Read More…

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.

Your Warehouse is Paperless. Why not Make Your Accounts Payable Department Paperless too?

Tuesday, September 8th, 2009 by Alex Smith

During the ERP selection process, wholesale distribution companies tend to focus heavily on the software system’s ability to process a wide variety of transactions and their associated accounting entries. Selection teams also focus on how various software solutions can help their organizations achieve greater operational efficiencies in order entry, customer service, inventory management, and warehouse management. Sophisticated ERP systems can allow wholesale distributors to streamline operations and improve overall organizational process efficiencies while simultaneously reducing overhead expenses. Unlike the order entry, customer service, inventory, and warehousing departments, however, the accounting department is frequently overlooked during the software selection process as a source for improved personnel productivity and greater departmental operating efficiency. An ERP accounting software solution that can allow the organization’s accounts payable department to operate in a completely paperless environment, on the other hand, can provide significant benefits to the distributor in the form of personnel time-savings, reduced overhead expenses, and decreased document retrieval time for situations in which a given invoice from a particular vendor is needed. In Enterprise 21 7.1, wholesale distributors can leverage paperless accounts payable functionality to achieve such benefits. Read More…

So, how does the paperless AP process work, and what is required to get started? First, the organization needs a document scanner for scanning invoices. Secondly, the organization needs adequate electronic storage space to store the digitized images of the scanned invoices. Assuming you have Enterprise 21, a scanner, and sufficient disk space, you’re ready to operate your accounts payable department in a paperless environment.

How it works. When the AP department receives an invoice from a given vendor or supplier, the invoice is scanned, an image of the invoice (usually a PDF) is generated and stored on the organization’s computer, and the associated purchase order document numbers are recorded. Enterprise 21 then automatically assigns a document number, creates an open AP matching record, and chooses the lowest value of the invoiced/received amounts to pay. A person in the AP department would then review the batch entries, view the invoices online as needed, make any necessary corrections to the batch entries, flag the purchase order(s) as complete where applicable, and commit the batch to be processed. From there, it’s business as usual for the AP department. This process enables wholesale distributors’ AP personnel to perform their daily tasks in a more timely, effective manner, eliminates the need for thousands of paper invoices to be filed and stored, reduces overhead expenses in the form of paper, filing cabinets, and storage space, and allows the AP department to retrieve any given invoice quickly and easily.

Paperless AP is just one of the exciting new features in Enterprise 21 7.1. Questions? Email us at

A Key Question Wholesale Distributors Should Ask Themselves – What Can I Do Today to Make it Easier for My Customers to Do Business With Me?

Friday, August 28th, 2009 by admin

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. Read More…

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.

Three Benefits to the Wireless Warehouse

Wednesday, August 19th, 2009 by Alex Smith

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: Read More…

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.

Enabling Customer Service Personnel to Work with Customers and Purchasing to Source Products in Wholesale Distribution

Monday, August 10th, 2009 by admin

I was involved in a recent discussion with a wholesale distributor which can be a very common scenario.  A member of the distributor’s management team described that while they stock a portion of their various supplier’s product lines, they can sell virtually any of the products those suppliers offer in their product catalogues.  The distributor’s sales process generally starts via quotes.  Some of the items being quoted may be stocked by the distributor, others may not. Read More…

In situations where supplier catalogues are not stored electronically within the distributor’s wholesale distribution system, customer service personnel will spend a lot of non-productive time looking through supplier catalogues – either paper-based (which may have outdated data) or on a supplier’s Web site – or interacting with supplier personnel to find the desired items for their potential customers.

Furthermore, many wholesale distributors allow their sales or customer service personnel to place purchase orders directly with suppliers to fulfill the non-stock items on sales orders.  This process can result in numerous issues.  Sales and customer service personnel may buy the wrong quantity of items at a higher price than necessary because the distributor’s overall purchasing power with the given supplier may not have been accounted for in the given transaction.

A strong wholesale distribution system will provide sales and customer service personnel with electronic access to their suppliers’ most up-to-date catalogues online.  By enabling business rules about minimum profit margins for given product lines or customer groups, sales and customer service personnel can easily quote both stock and non-stock items in alignment with the management team’s targeted metrics.  When non-stock items are quoted, purchasing personnel can be notified electronically as to the existence of the given quote line items.

When the distributor’s customer elects to purchase the products on the quote, the sales and customer service personnel can convert that quote to a sales order, either in part or in whole based on those items desired, and have the system manage the committing of inventory for those items which are stocked by the distributor simultaneously with generating the purchase requisitions for the non-stock items.  These purchase requisitions can then be reviewed by the distributor’s purchasing personnel – those people the company has entrusted to work with its suppliers – to turn the purchase requisitions into purchase orders within the wholesale distribution system, and then transmit those purchase orders to the associated suppliers via the supplier’s preferred method of interaction – either printed paper, facsimile, email, or EDI.

By leveraging the capabilities of strong wholesale distribution systems, such as TGI’s Enterprise 21, wholesale distributors can enable their customer service personnel to work with their customers and their purchasing personnel to source products from their suppliers.

Leveraging e-Commerce Functionality to Increase Software ROI in Wholesale Distribution

Monday, August 10th, 2009 by Alex Smith

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. Read More…

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.

Leveraging Wholesale Distribution Software for Competitive Advantage – Delivering Value-Added Services

Tuesday, June 30th, 2009 by admin

Businesses across all industries strive to gain and sustain a competitive advantage in their respective marketplaces. And, this is certainly just as true for wholesale distributors. One of the ways in which wholesale distributors strive to gain a competitive advantage is to deliver value-added services in conjunction with the products they source for their customers. Strong wholesale distribution software must enable distributors to perform and record these activities just as they do purchasing, warehousing, picking, packing, shipping, and invoicing the products they distribute. Read More…

There are a variety of methods by which distributors strive to differentiate themselves to their customer base. Distributors may allow their customers to buy products as a kit, where by a series of items can be specified and ordered via one SKU or item number. Wholesale distribution software like TGI’s Enterprise 21 can enable distributors to sell both predefined kits to their customers and configurable kits where the customer can select those items which are included in the given kit being ordered. Distributors can elect to price these kits to their customers at the parent kit SKU level or by a combination of prices for those items making up the kit. The latter method is especially good for configurable kits. Furthermore, distributors may elect to perform kitting via simple picking operations or as a work order-based process when they desire to capture the costs associated with their kitting operations.

Another value-added service which distributors commonly perform is repacking. In this case, distributors may buy a given product in bulk quantities and repack it into smaller quantities for their customers to purchase. As was the case with kitting operations, some distributors will elect to capture the labor costs associated with these operations while others would not.

For wholesale distribution software that includes strong manufacturing functionality, distributors can perform assembly or light manufacturing operations. In these cases, the system’s traditional manufacturing bill of materials and routings (or bill of operations) can be used to define and execute the series of operations and associated components being consumed in assembly or manufacturing. As was true above with the kitting operations being performed via work orders, wholesale distributors can capture the associated costs of these operations. The actual material, labor, and overhead consumed at each point in the routing can be recorded with the associated costs rolled up across the various operations to produce an overall product cost in the system. Alternatively, the distributor may elect to record material, labor, and overhead at a standard rate of consumption via a simple backflushing method. Furthermore, distributors can elect to reflect product costs via their preferred costing methods including actual LIFO, actual FIFO, standard, or average.

In addition, distributors may have outside, third-party companies perform outsourced operations on their behalf. Strong wholesale distribution software will enable the distributors to source the components to be consumed for the outside processor, purchase and track the shipment of these components to the third-party, cut purchase orders for the performance of the outside operation’s services, receive the completed products back from the third-party, and pay the respective vendors for their products and services. Taking advantage of the manufacturing functionality within a strong wholesale distribution system, the material, labor, and overhead associated with the outside operations can be recorded just as it would be if the assembly or manufacturing were performed in-house by the distributor. These outside operations can also be daisy-chained in a manner that one third-party may receive certain components and perform specific operations, then ship the subassemblies to another third-party for secondary processing, and so forth, until the finished product is either delivered to the distributor or direct-shipped by the last third-party in the chain to the distributor’s customer.

Wholesale distributors may also elect to place consignment inventory at a customer location. In this case, the inventory is owned by the distributor until the customer consumes the given inventory. Strong wholesale distribution software will enable the distributors to place and manage the inventory at the customer location, receive the appropriate signal that the inventory has been consumed, trigger the appropriate customer invoice processing, and manage the level of consigned inventory based on the preferred replenishment methodology for that inventory at that customer location. Consignment inventory can also be used with third-party operations for managing component inventory until it is consumed in production runs.

Through leveraging strong wholesale distribution systems like TGI’s Enterprise 21, wholesale distributors can gain and maintain a strong competitive advantage in their industries by delivering value-added services to their customers.

The Specifics of Available and Capable to Promise Order Management for the Wholesale Distributor

Tuesday, June 23rd, 2009 by Alex Smith

A key functional element to any wholesale distribution software solution is order management. One’s ability to enter orders quickly and in an efficient manner can dramatically improve customer relations and service. As part of the order management process, a sophisticated distribution software solution should include both available-to-promise (ATP) and capable-to-promise (CTP) order management processes to ensure accurate commitment of shipment and delivery dates for customers at the time of order entry. Read More…

Available to promise means that when a customer places an order for a given item, the item is available in inventory (taking into account items that have already been allocated to previous orders). Available to promise functionality can go one step further to include a “commit to planned inventory” feature. This functionality is utilized when a sales order is placed for an item that is not currently in inventory, or is in inventory in insufficient quantity to satisfy the requirements of the customer. If there is already an existing open purchase order for that given item, the system can commit items on that purchase order to the existing open sales order based on the vendor’s delivery promise dates. Such a feature can dramatically improve anticipated shipping and delivery dates for the organization’s customers while simultaneously increasing inventory turns and lowering on-hand inventory levels.

In contrast to available to promise, capable to promise defines the ability of the organization to execute against a given customer requirement. For example, consider the situation when a customer places an order for a given item and the item is not in available inventory and there are no existing open purchase orders for the given item. In Enterprise 21, the system will alert the customer service representative in real-time that while the item is not in available inventory and that there are no open purchase orders for that item, the item is capable of being ordered, received into inventory, and shipped to the customer within a specific time frame based on the item’s lead time from a given supplier. While accounting for the item’s lead time, Enterprise 21 will immediately suggest an expected receipt date of the item into the warehouse, an expected ship date to the customer, and a final receipt date at the customer’s facility. In other words, at the time of order entry, the organization has the ability to identify its capability to fulfill the given customer order and provide an accurate shipping and delivery date for that order to the customer. Enterprise 21 can then generate a purchasing requirement and alert employees in the purchasing department that such a purchase requirement exists in the system. The purchasing manager can then analyze potential suppliers and look for discount opportunities from each supplier, submit requests for quotes to suppliers, generate purchase requisitions, and convert quotes into final purchases orders, all directly from within Enterprise 21.

By implementing available to promise, commit to planned inventory, and capable to promise functionality within the sales order management process, wholesale distributors can dramatically improve customer satisfaction, increase order and line item fill rates and inventory turns, and realize significant cost savings due to reduced inventory carrying costs.