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1 five ways you can increase wholesale trade profit For additional copies of this booklet or for more information regarding Enterprise Resource Planning (ERP), Financial Management, Construction, Property Management and Engineering (CPE), Customer Relationship Management (CRM) and Business Intelligence solutions, contact your local Enabling office. Please visit our website at and discover how we enable better business for you. Or contact us: Australia 1800 ENABLING ( ) New Zealand 0800 ENABLING ( ) FIVE WAYS YOU CAN INCREASE WHOLESALE TRADE PROFIT Copyright 2013 Enabling. All Rights Reserved. Enabling and the Enabling logo are registered trademarks of Enabling. All other marks are trademarks or registered trademarks of their respective companies. a five ways series publication from enabling

2 introduction When selecting the right system for your distribution business, it is important to understand the many benefits an up to date, modern integrated system can offer more than you may think. What you decide has huge implications for your business success and efficiency, impacting every person within the business: a true distribution system is an enterprise-wide application. Setting up your business for further growth may mean the systems that worked when you started have now passed their use-by date. This paper reviews some of the common issues businesses face, and why they don t have to struggle any longer. Make sure the SCM System (Supply Chain Management) you choose is integrated and flexible enough to adjust to your business requirements today and in the future. The solution should help add insight to the dayto-day running of the business. The solution should be focused on your strategies and imperatives, fit your business processes, in particular the complex ones and meet your timeline, budget and expectations. As a certified SCM Solution Provider with many customers in the wholesale trade industry sector, Enabling has the experience and expertise to further assist you with your wholesale trade business enquiries or to answer any additional questions you may have about selecting and implementing a distribution solution. NOTE. SCM is an abbreviation of Supply Chain Management System, which usually incorporates software for accounting and reporting, inventory control, warehousing, and manufacturing as applicable. It can range from a relatively simple system which integrates inventory with accounting and good reporting, to a system with barcode scanning or adding more automated processes for warehouse control, and manufacturing if required. PROPRIETARY INFORMATION AND CONFIDENTIALITY The information contained in this document represents the current view of Enabling on the topics discussed as of the date of publication. authors & contributors Enabliser Andrew Enabliser Howard Enabliser Kim This document is for informational purposes only. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form, by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Enabling Pty Ltd. Enabling may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Any product names herein are acknowledged as the copyright of their copyright owners. The example companies, organisations, products, people, and events depicted herein are fictitious. No association with any real company, organisation, product, person, or event is intended or should be inferred. Enabling Pty Ltd. All rights reserved. a five reasons why publication from enabling

3 five ways you can increase wholesale trade profit As a Wholesale Distributor, you will face unrelenting competitive pressure to fine tune prices and increase volume: that means being on a constant lookout for ways to improve margins and grow revenue. It requires great focus on reducing operating expenses and cutting costs throughout the order-to-cash process, managing inventory more efficiently, and integrating operations more tightly with your customers and suppliers. Operating a business is never smooth and easy. Many different problems can arise. At the extremes, if an issue occurs with suppliers to your company, you may have to change how you source your product. If the distributor goes out of business, you will have to find another supplier for that product. A SCM system lets your company better cope with problems at either side of the product spectrum. You can quickly and easily figure out a response to the problem instead of being surprised by it at a later time. And there are the constraints of balancing inventory turnover with availability for customers and having excess stock. A single integrated SCM software application can help you manage this balancing act by streamlining your entire orderto-cash process and provide clear visibility into inventory levels, order status, supplier schedules, and customer demands all in the one system. The software provides complete support for: Order-to-cash management from pricing, quoting and entering customer orders, setting up deliveries, and updating stock balances to managing invoices and payments or collections. Inventory management across multiple warehouses, using FIFO, moving-average, or standard costing. Inventory management knowing exactly what stock you have, the cost, where it is and when future orders are due. Tracking stock transfers between warehouses, enabling consignment, drop-ship, and other orders, and performing inventory and cycle counts. Managing multi currency issues with ease. Serial and batch number management when required. Visibility into your customers, including complete order history to predict demand and adjust inventory accordingly, and knowing who your best customers are. An integrated system so you don t manage many tasks on different spreadsheets, e.g. stock planning, foreign currency, warehouse stock locations (avoiding the inherent inefficiency & checking for errors needed otherwise) or using separate systems and all your information is in one system for ease of data entry, reporting, customer service the list of benefits is long. business benefits Streamline order-to-cash process through efficient processes and automated supply and distribution chain. Reduce costs through optimised inventory management reduce excess inventory and cut unnecessary waste, paper work, and costly shipping errors. Improve profit margins with efficient procurement, quoting - improving decision making through greater visibility into the true costs of orders. Increase customer satisfaction through faster and more accurate order processing and fulfilment. hear what our raving fan has to say: This clean integration end-to-end from customer right through to the dispatch of the order and then back to the customer again means information is keyed only once, thereby reducing human effort, but more importantly reducing the margin for error. Jeremy Brown Director, Micro Mobility Ltd a five ways series publication from enabling PAGE 1

4 five ways 1 managing stock levels How can I manage my inventory better and improve the profitability of my warehouse/warehouses? I need the ability to analyse stock movement and profitability, allowing me to maximise my stock turnover. It is either too high or we run out. It is a difficult act, balancing the needs of customers against having too much stock on hand. To order the stock, it needs so much manual effort; with spreadsheets, the process is very difficult and tedious and not always accurate. Ensure the solution gives you the ability to plan inventory from product forecasting and ordering, to customer order allocation using one consistent system without needing many spreadsheets. All stages from order to receipt are visible in one system. This will allow you to have the inventory on order ready to fulfil the customers orders and result in quicker order turn-a-rounds and high customer satisfaction. A good SCM has the reporting to graphically show you the best and slowest selling items, combined with margins. This gives you the ability to optimise mark down planning facilitated by comprehensive stock tracking and movement analysis. With easy to use graphic reporting you can use self-service tools to analyse your data, find the inconsistencies, use traffic light icons to warn, to praise, highlight the best and the worst. 2 overseas currency How can we handle overseas currency transactions with rates changing all the time? Are my costs blowing out because of currency changes I didn t account for? How do I manage product sourced from overseas, and protect my margin when I sell to overseas customers? The solution should let you maintain the various currency rates and correctly value inventory and transactions so you are always aware of your position and any risks from unrealised gains and losses. This will allow you to create purchase orders with a full understanding of the purchase price in your local currency. With comprehensive control over the importation process and accounting for landed costs, you have more accurate cost analysis and can quickly see and rectify problems before they get out of hand. 3 updating web store and doubled up data entry With my web store, how do I keep prices up to date, manage product availability and take customer orders into my system accurately and easily? We have to manually transfer orders from one system to the other, as well as transfer stock and price data between the accounting system and the web store and check it all. We also waste a lot of time re-entering other information, like pricing and have to double check it all as the fallout from a mistake could be catastrophic on a large deal. Entering everything twice and double checking for data entry errors isn t ideal. Your solution should have the option of a web store which integrates in real time, so product availability is accurate and customer orders automatically processed in the financial/inventory system without worrying if the data came across or checking for mistakes. Orders are processed automatically. An efficient SCM system can also allow you to automate the importing of price lists too, so you don t have to enter data into separate systems: entering it once does it for all. With automated approval workflows, management have a control process as a further check measure. This solution will provide your organisation with an easy way to do business with your customers with increased levels of service quick and easy to order - resulting in more sales and customer loyalty, all processed efficiently. 4 better customer service My customer service is OK. But how can I do it better? We make customers wait for information, quotes take too long, and when they call, chasing up orders, it takes time to track the orders - which means delay and unsatisfied customers. I have to look up orders, check the spreadsheets and hunt in the shipping files and hope it is up to date. We don t have all the answers at our fingertips. With comprehensive access to inventory information in real time, you can give customers up to date information on their order a five ways series publication from enabling PAGE 2

5 status, what is in stock and when it will be available. This reduces the risk the customer will order from another supplier and will improve your customer service. And with a Customer Relationship Management capability that extends across the organisation from the front office through to warehouse and despatch you know more about your customers and can communicate with them and build a relationship, advise them of special deals, and more. An integrated solution will provide any team member who has the right access, the ability to view and track order status, allowing you to provide the customer with an up to date status improving on your customer service and reducing the risk the customer will order from another supplier. 5 better relationships Suppliers. I m an important customer to my suppliers but I feel I don t have the upper hand in negotiating, especially with new deals. How can I track my purchases with each supplier and make sure I get the best deals and discounts and ensure my selling prices are as tight as possible? What margin am I giving away because I missed negotiating the best deals? A SCM system can improve your company s relationship with suppliers so you can see the total of your orders over time with each supplier. You now have hard facts on which to negotiate price and supply deals, emphasising your importance as a valued customer. This provides opportunities to cut costs, negotiate volume discounts, allowing you to be flexible with your own high volume customers and to obtain greater efficiencies in shipping too. These are powerful benefits we cannot take for granted without the backing of hard facts. summary In summary, if any part of your business doesn t support the overall goals, then either the goals need to be redefined, or that part of your business modified or stopped. Your business strategy is how you plan to achieve those goals. Underlying the strategy will be a series of processes and activities that contribute to aspects of the strategy. While we have provided some seemingly simple concepts in theory, in practice achieving a balance can prove difficult. The risk-return trade-off, inherent in all aspects of life but especially pronounced in the area of productivity (people, process and technology), tells us that increasing returns in these areas goes hand in hand with increased risk. However, through strategic planning and management, businesses do not have to sacrifice profits for immediate results or improved productivity. Enabling sponsors this paper, and hopes readers gain key insight from our suggestions and views on improved productivity. For more information on how Enabling are able to streamline your productivity to optimise your business - people, process and technology: Please see over page and visit our website at and discover how we enable better business for you. Or contact us; Australia 1800 ENABLING ( ) New Zealand 0800 ENABLING ( ) Increasing profit in Wholesale Trade means more than getting more customers in the door! It s a combination of good systems and making your business easy to deal with from good information and service, efficient processes, lean procurement with the right product and people. A modern integrated SCM system gives you good systems and processes, gives your people the right tools and information and valuable backing with managing your product. Good company, good people, good systems you need them all. a five ways series publication from enabling PAGE 3

6 enabling better business Whether you have the desire to achieve higher sales performance, make better decisions with accurate data, streamline and automate financial and business processes in a way that creates business success. To achieve this you need the right business software and a partner who will support you for the long term. With a team of over 100 experienced professionals throughout Australia and New Zealand, Enabling can review your business requirements, and help you to select the right solution - from the very best software vendors in the market. This is how we enable better business... Our Business / Industry solution include: Hosting and Managed Services (Cloud based) Construction, Property Management and Engineering Solutions (CPE) Enterprise Resource Planning (ERP) Financial Management Information Solutions (FMIS) Customer Relationship Management (CRM) Supply Chain Management (SCM) Professional Services Automation (PSA) Business Intelligence (BI) Software Development and Integration (SDI) five key reasons to choose enabling These form part of our corporate vision and are the benchmarks from which we are able to determine the success and quality of the services we offer. Passion Is a key part of our culture. We care about your business and we want you to succeed. To this end we ensure that absolute value is what we deliver to your project, and we make sure our attitude and behaviors support this goal. Choice Having more than one offering allows us to focus on matching the right business solution to your distinctive business requirements. Enabling is unique in that we have partnered with several leading software vendors within our industry. Experience We understand business and technology; and with more than 100 team members, have the skills and resources to deliver results consistently. Methodologies With our best practice methodologies we are able to help lead your team from solution selection, through to delivery and long term support taking the guess work out of technology. Raving Fans A Raving Fan is when you would, without hesitation recommend Enabling to a friend or colleague. For Enabling the true measure of our success is a Raving Fan. the enabling experience The Enabling Experience focuses on delivering a superior level of service that creates happy customers (Raving Fans). This experience provides a complete methodology including project management discipline and tested best practices. The Enabling Experience is designed to help drive productivity through a consistent approach. Utilising standard tools and templates in this way we are able to achieve successful project execution driving business value from the outset, whilst always aiming to gain a Raving Fan as a result. Enabling might be able to help Business Development a five ways series publication from enabling PAGE 4

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