ERP Strategy in Wholesale Distribution

ERP strategy

One of the most critical applications in SAP is the Sales and Distribution app (SAP SD). I speak with IT and business executives regularly who understand that SAP is still only as powerful as the raw data that must be entered into it.

Order management is an afterthought when considering an ERP strategy that accounts for every business unit, which is why it’s a common project that circles back around after go-live.

As an aspect of the business that has a direct impact on revenue and customer experience, order management has become an area that everyone is reevaluating.  In an increasingly customer-focused economy, it’s no surprise the market leaders are looking for ways to make it easy for customers to buy their products.

Most of the folks I speak with in wholesale/distribution are trying to solve the issue of a bogged down customer service team by implementing robust e-commerce platforms and onboarding customers to EDI. These are excellent strategies to eliminate the bottleneck that plagues customer service/inside sales reps.

In reality, the breakdown of order management channels looks something like this:

E-mail 60%
EDI 20%
Web 10%
Phone 8%
Fax 2%

 

Problems distributors are telling me about

  • EDI really only makes sense financially if you receive 80% of sales orders from 20% of your customers.
  • No matter how robust and user-friendly an ecommerce platform might be, you’re still asking your customers to log into your website (over competitors) and service themselves. It’s a big ask considering that a competitor might take their orders in any channel, just to earn the business.

Solutions distributors explore

Other leaders in the wholesale and distribution space, like Parts Town, solve the order management bottleneck by having an order management platform that sits out in front of SAP SD. It’s a tool that customer service lives out of and offers tons of “bells and whistles” that transform customer service units into a well-oiled machine that streamline the order-to-cash (O2C) cycle.

The value add for customer service is simple: increased employee engagement by eliminating monotonous data entry. No errors and more time actually spent delivering a quality customer experience.

The brass tacks value add for the entire business is the fact the enterprise now has a solution that turns every single order into an EDI-like transaction — no matter the inbound channel.

An order management platform that isn’t template based changes nothing in how your customers place an order. They send it in exactly how they are currently sending orders and you have something that automatically receives, extracts and enters the sales order into SAP SD.

The takeaway is that you now know exactly what leaders in the wholesale and distribution space are doing to eliminate the bottleneck between order receipt and order entry. A manual order management process does not leverage the significant investment made when implementing SAP.

There are a few different ways to solve this challenge. An order management platform is just one of those options. Then again, Parts Town didn’t receive the O2C department of the year from IOFM for throwing additional headcount at the problem.

Nick Carpenter

As one of Esker's Sales Development Representatives, Nick Carpenter, listens to savvy executives that want to leverage SaaS. He is currently executing Esker's Accounts Based Marketing strategy and digging deep into net new target accounts.

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