Reducing Distribution Costs with the Right ERP Solution

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For any company that deals with the distribution link in the supply chain, reducing those costs is key—and the right ERP solution can make all the difference. Following are a few ways the right ERP solutions can help:

  • If you order more of a product from a vendor than other customers, the vendor might offer you additional discounts or benefits. This is usually triggered when your order reaches a certain quantity. Your ERP software should have the ability to track when those discounts are triggered.
  • Another way a retail ERP solution can help reduce distribution costs is by providing increased visibility into your current distribution process. If your ERP system has good analytics capabilities, it can provide better visibility into your distribution processes, which can help you uncover unnecessary costs. Once you uncover those costs, you can correct for them by updating processes to become more efficient. Without the visibility provided by an ERP system, you would likely never discover these opportunities.
  • Another great way to reduce distribution costs is by comparing carrying costs with transportation expenses, thus finding the ideal replenishment inventory levels for your products. An ERP system can give you the data you need to make these comparisons, helping you make critical corrections that will save you money.
  • Quantity prices breaks are another area where an ERP solution can be of help. By storing vendor information quantity price breaks, your system can help calculate which ordering method can reduce costs.

An ERP system optimized for retailers can offer visibility into the supply chain and perform the analytics needed to reduce costs.

By ArcherPoint, LLC, a Northern California Microsoft Dynamics NAV (Navision) partner.

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