Wholesale distribution is crucial for the business world. In essence, supply chain management connects manufacturers to consumers through retailers. Wholesale distributors face many challenges, from warehouse management to stock replenishment. For this reason, we are witnessing an increasing demand for robust wholesale distribution software systems capable of handling such complexities within this industry.
This article will explore wholesale distribution and how NetSuite — one of the best ERP solutions available — has been helping distributors overcome their greatest challenges. We shall explore significant problems wholesale distributors face, discuss comprehensive NetSuite solutions, and give implementation best practices. We aim to enlighten you on productivity and profitability improvements through appropriate software selection, whether you are new in the channel or considering upgrading your current system. Do not worry; we have real-life examples and practical advice for you.
Key Challenges in Wholesale Distribution
At Haya Solutions, we acknowledge the intricacies of wholesale distribution. We know wholesalers face many problems in the fast-moving market because we have witnessed them ourselves. Now, let's discuss some of these common challenges in this field.
- Inventory Management: balancing inventory is one of the most significant challenges for distributors. We have observed that excess goods bind capital and occupy precious space in warehouses, whereas too little results in missed sales opportunities and disgruntled buyers. This is a fine art that necessitates accuracy and anticipation. Warehousing costs worldwide reach a massive 325 billion USD annually. Such costs do not even include those connected with chaotic warehouses, where mistakes, delays, and accidents at work are common due to inefficiency. According to our findings, it is essential to manage stocks well to cope with uncertain demand. A robust warehouse management system can automatically calculate stock needs, considering historical data, promotions, seasons, and supplier lead times.
- Supply Chain Complexity: we've observed that supply chain complexity is a constant factor in wholesale distribution. As manufacturing and fulfillment complexities grow, the traditional approach of reducing product SKUs is no longer a viable or profitable option]. The emergence of new global consumer markets has added to this complexity, contributing to variability and uncertainty]. To tackle this, we at Haya Solutions believe in embracing complexity rather than trying to simplify it. We've succeeded in unifying complex systems and building end-to-end visibility across inventory, order, logistics, and transportation management. This approach helps in better coordination, data synchronization, and information sharing, which are crucial for smooth business operations.
- Customer Demand Fluctuations: Fluctuating customer demand is another significant challenge we often encounter. Seasonality, weather, and external crises can dramatically impact product demand. For instance, during the COVID-19 pandemic, many businesses experienced sudden shifts in demand due to health risks and economic uncertainties. We recommend hiring temporary workers during peak seasons, cross-training existing staff, and building a network of freelancers or subcontractors to address this. Moreover, to preserve income during periods of low demand, we have also found that providing free services or venturing into associated areas is helpful.
NetSuite's Full-Service Package for Wholesalers
At Haya Solutions, we have witnessed a significant transformation in wholesale distribution brought about by NetSuite’s cloud-based platform. A single game-changer that enables distributors to run all their operations on one system. Let us look at some of the main features that set NetSuite apart.
Integrated ERP Features
NetSuite ERP is a set of apps that handle essential business operations. It can blend accounting with order fulfillment, warehouse management, supply chain, and production control systems. This integration gives companies clear visibility into their data and tighter control over their operations.
The platform includes built-in workflows for essential functions across your distribution business, including:
- Commerce: Omnichannel engagement for all customer interactions
- Inventory: Efficient management of stock and supplier relations
- Financials: World-class accounting across your organization
- Marketing: Real-time metrics to drive customer engagement
- Sales: Streamlined processes from lead to close
- Warehouse: WMS functionality to reduce overhead and improve delivery rates
Real-Time Visibility
NetSuite is powerful because it can offer real-time visibility throughout the company. This is important because it allows people to make well-informed decisions quickly. With NetSuite, we can help you:
- Gain instant access to financial and operational performance data
- Centrally manage inventory across multiple locations and selling channels
- Incorporate demand-based planning to reduce stock-outs and optimize inventory levels
NetSuite Scalability
As your business grows, NetSuite grows with you. It's designed to handle the complexities of expanding operations:
- Manage multiple subsidiaries, business units, and legal entities with one ERP solution
- Support operations in over 200 countries, with 27 languages and 190 currencies
- Customize the platform to meet unique needs as your business scales
We've seen firsthand how NetSuite's scalability can significantly reduce the need for additional hires during periods of growth.
Implementing NetSuite: Best Practices from Consultants
At Haya Solutions, we've guided numerous wholesale businesses through successful NetSuite implementations. Here are some best practices we've developed:
NetSuite Customization Strategies
We always start by defining your business processes and giving attention to your unique selling proposition. That is why we ensure that the NetSuite account highlights the features that make you different.
Our goal is to increase productivity. Therefore, we identify tasks that can be automated due to their repetitive nature. For example, record defaults in NetSuite may be used to stop some manual data entry. We also set up user permissions to ensure data security and appropriate access levels for all users.
Change Management
Change management is crucial for a smooth NetSuite implementation. We've seen that neglecting this aspect can lead to significant challenges. Our approach includes:
- Enhancing your organization's capabilities to leverage NetSuite's technology
- Overcoming the learning curve, which can be significant, depending on your project timeline and current capabilities
- Helping you unlearn old practices if you're transitioning from multiple systems
For smaller businesses with limited resources, we offer solutions like our Accounting Business Process Outsourcing (BPO) to get you up and running with NetSuite-trained staff.
Ongoing Support
We understand that support continues after implementation. Our ongoing support includes:
- Technical Services: We provide integration and development skills your IT team might need more internally
- Certified NetSuite Developers: For custom scripting and integrations
- Innovation Division: We can co-administer your NetSuite environment and advise on innovative ways to leverage your investment
Follow these tips to guarantee that your NetSuite implementation is completed on schedule, within budget, and meets your business goals.
NetSuite Implementation Case Study
One of our NetSuite customers, North America Lighting Products” NALP”, needed help predicting future demand. Preparing for market needs and avoiding overstocking or understocking took time. By implementing demand planning, minimum stock level, safety stock, and reorder point, NetSuite AI automatically forecasts sales and purchase demand and maintains safety stock. This led to increased inventory turnover, increased warehouse space availability, and reduced lead time and cost. It also led to higher customer satisfaction and, therefore, an increase in sales.
In addition, NALP opened a new giant warehouse. The products needed to be organized, and the warehouse team used to put the received packages on racks and shelves anywhere in the warehouse. This practice led to the inability to find enough space for significant ballets; however, many small empty spaces were available. NetSuite Warehouse Management System “NetSuite WMS” solved this problem. This will guide the warehouse team and storekeepers to which bin to put the received products in and where they need to be picked up for fulfillment and delivery.
The implementation needs change management efforts to prepare users for the change. Some of them needed to be computer savvy. They would need to use barcode scanners instead of a pen and paper. Also, they had to follow system instructions instead of using their brains and memories. These challenges have been overcome using change management techniques to adopt, train, and support users through comprehensive training programs, continuous support, and feedback mechanisms. By ensuring thorough user engagement and providing resources like step-by-step guides, interactive training sessions, and accessible help desks, users could transition smoothly and embrace the new system efficiently.
FAQs
Wholesale distributors face several challenges: inventory management, supply chain complexity, and fluctuating customer demand. Efficiently balancing inventory to avoid overstocking or understocking, managing complex supply chains, and adapting to changes in customer demand are critical for success.
NetSuite ERP offers integrated features that handle essential business operations such as accounting, order fulfillment, warehouse management, and supply chain control. It provides real-time visibility, which helps in making informed decisions quickly and efficiently.
NetSuite helps balance inventory by predicting stock needs using historical data, promotions, seasons, and supplier lead times. It reduces warehousing costs, minimizes the risk of stockouts, and improves overall inventory turnover.
NetSuite unifies complex systems and builds end-to-end visibility across inventory, order, logistics, and transportation management. This enhances coordination, data synchronization, and information sharing, which are crucial for smooth operations.
Successful implementation involves defining business processes, customizing NetSuite to highlight unique selling propositions, automating repetitive tasks, setting up user permissions, and managing change effectively. Ongoing support and leveraging professional advice are also essential.
It depends on your business size, budget, needs, and customization level. The cost structure includes an annual NetSuite license and a one-time implementation fee. At Haya Solutions, we offer a free assessment of your business, and our consultants will recommend an approach and estimate the transition cost and timeline for you.
Conclusion
Wholesale distributors can use the NetSuite application suite to improve efficiency and productivity. These powerful tools address some of the most pressing issues in inventory management, such as supply chain complexity or fluctuating customer demands. NetSuite's real-time visibility integrated ERP features, and scalability enable wholesalers to make quick decisions based on facts and adjust rapidly to shifting markets. To achieve success with NetSuite implementation, a lot of planning and professional advice are needed.
Haya Solutions is committed to helping businesses navigate this process, from customization strategies to change management and ongoing support. We want to ensure your NetSuite investment is valuable and your business grows. You can start by booking a free consultation with our NetSuite experts.
References
[1] -https://www.netsuite.com/portal/resource/articles/inventory-management/wholesale-distribution.shtml
[2] - https://www.netsuite.com/portal/products/erp.shtml
[3] - https://www.netsuite.com/portal/assets/pdf/ds-wholesale-distributors.pdf
[4] - https://www.netsuite.com/portal/industries/wholesale.shtml
