5 Features Your Wholesale Distribution ERP Software Needs for Item Management

As a wholesale distributor, you may stock and sell thousands of inventory items. These items may be similar, with only slight variations in size, style, or other attributes for each type of product. It is imperative that your ERP solution is able to help you manage these complex and variable items in order to streamline and simplify processes, increasing efficiency.

But how do you know which ERP system is right? There are so many out there, and they aren’t all created equal. Here are a few key features your ERP solution should have to help you manage your inventory items. If you already have an ERP software implemented, use this as a checklist; if your ERP is missing some of these features, it may be time to reevaluate your software solution.

Item Attribute Management

The items you stock and sell are likely similar to each other—some items are probably identical to others you sell with only slight variations (such as color, size, or style). Between all of the products you stock, you could have thousands of varying attributes and values. Creating and managing product families of similar items like these on your own is usually time-consuming, difficult, and prone to human error.

Plus, when items look extremely similar, the resulting confusion can result in the wrong items being sold or purchased. This could also cause overstock and stock-out situations that lead to write-offs, rush orders, and increased cost of goods sold.

For example, if you sell fashion jewelry rings, you have items that not only vary by style/design and color, but by size, type of gem, size of gem, gem color, method of packaging, etc. Your ERP needs to be able to handle a complex inventory process and a wide variety of attributes.

Your ERP system needs to be able to automate and streamline item creation, sales, and purchasing processes for product families that use item attributes and values.

Flexible Kitting Options

As a wholesale distributor, you may manage kits of components assembled, stocked, and sold together—particularly if you’re in the automotive, electronics, and machinery industries. Although kitting is less common in non-durable goods, there are times when food, chemicals, and other products are sold as kits.

Kits, of course, include stock items. Many times, though, kits can include non-stock items such as instructions, user manuals, or the labor to account for assembly costs.

You may also need to break down products down into base components or for other orders, such as an electronics distributor needing to break down their computers into components and sell the parts individually. The disassembly process may result in the loss or damage of kit components.

Your ERP system needs to provide flexible kitting options for both stock and non-stock kits.

Compliance management for recalls and quality control

Many wholesale distributors—such as technology, machinery, and automotive parts distributors—require serial tracking to manage inventory effectively. Serialized inventory is necessary for managing recalls and manufacturer warranties.

Your ERP application must capture serial numbers during the receipt of goods process or during sales order entry.

Lot tracking is also necessary for distributors of food products, chemicals, medical supplies, metal products, pharmaceuticals, and other non-durable goods, as it improves compliance with industry and customer quality requirements. Lots are used in combination with expiration dates to manage stock rotation for perishable inventory. Your ERP software must have adequate lot tracking to identify which customer sales are impacted by a recall for spoiled or contaminated products.

Ensuring your ERP system has serial and lot tracking for quality control and compliance with recalls will help you improve your efficiency and customer experience.

Provide variable unit of measure

You have probably dealt with unit of measure (UOM) conversion many times in your career as a distributor. You may purchase in one unit of measure, stock in another unit, and sell in yet another unit—such as a beverage distributor who buys inventory by the case, stocks by eaches, and sells in six- or 12-packs.

UOM conversions can be difficult to set up in some ERP applications. You need to have the ability to define UOM and how each UOM is related or converted to other UOMs. Some applications provide additional features to streamline order entry for both purchasing and sales.

Your ERP solution needs to provide flexible, user defined UOM conversions and variable UOM for purchasing, inventory, and sales.

Expiration Dates and Stock Rotation System

If you’re a wholesale distributor of perishable goods, then you must manage inventory using expiration dates. The expiration dates can be associated with lots or serial numbers and are captured at the receipt of goods or defined during sales order entry.

Typically, order fulfillment processes pick items that are closest to their expiration date—a process known as first-expired, first-out (FEFO). FEFO picking helps to ensure lowered rates of perished items, lowered costs, and increased profitability.

Expiration dates improve stock rotation to move older stock to the front of shelves for picking. Your customer service department also needs visibility into expiration dates to ensure a minimum number of days until the expiration date for specific customer requirements or requests.

Your ERP system needs to not only keep track of these expiration dates in order to assist in the FEFO order fulfillment process, but also give customer service visibility into the expiration dates for sales order entry.

Features your distribution ERP solution needs:

  • Item attribute management
  • Flexible kitting options
  • Compliance management for recalls and quality control
  • Provide variable unit of measure
  • Expiration dates and stock rotation system

In conclusion...

Wholesale distributors will struggle to manage items and product families, expiration dates, UOM conversions, and kitting effectively without a modern ERP application. Not all ERP solutions are able to handle the multitude of complex issues that come with wholesale distribution. Ensuring you do proper research into what solution is right for you is imperative in streamlining your business processes.

If you feel as though you need help with the selection process, we can help you out! Not only do we partner with an ERP solution that has all of the features we’ve highlighted above, but we tailor our solutions specifically to your business processes—even if it means we need to build solutions custom to your business. Contact us today to find out how Opus can help your business.

What are some other features your wholesale distribution ERP solution needs? Let us know!

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