Harnessing ERP software for your distribution centre

One of the biggest challenges distribution centres face today is the need to expand their operations, and, in turn, successfully maintain this expansion without overextending available resources and staff.

In fact, the Warehouse and Distribution Center Operations Survey from Logistics Management shows that not only are distribution centres (DCs) growing in size — both in terms of square footage and vertical space — but many distribution centres now include more than one building to support their operations.

As of 2018, the average distribution centre size was more than 27,870 square metres, increasing from 16,350 square metres in 2017. DC’s are also trying to capitalise on their available vertical space, particularly as supply chain and customer demands continue to rise, but they also want to keep overhead costs low.

Where the average DC was around nine metres tall in 2016, this rose to 10 metres in 2018. What’s more, 27% of all distribution centres included six or more buildings in 2018, with plans for more in the future.

While added physical space gives distribution centres room for more inventory and enables them to improve the way they address vendor and customer demands, there are some additional challenges created in doing so.

As the volume of orders your distribution centre sees increases, it means you and your team need to work faster to keep up. However, this push to work faster must come with quality controls and oversight. As Supply Chain Digital pointed out, faster work can translate to more mistakes.

“It's not that the process involved (identify shipping requirements, pick items from the warehouse, dispatch items) has changed; it's that it's suddenly become a lot more intense,” Supply Chain Digital contributor John Weber wrote. “For example, a key part of fulfilling an order is making sure the right products go out in the right packages. This is already a labour-intensive process but achieving it for a greater number of orders in less time makes it even more difficult, increasing the potential for mistakes.”

When operations are spread across multiple locations, this can complicate things in terms of management. Supervisors and stakeholders must ensure that everything from accounting and procurement, to picking and fulfilment, takes place in the most streamlined manner possible. Any disconnect can affect the efficiency of the distribution centre, and even spiral out to impact other supply chain partners.

Expanded distribution centre operations also create challenges for inventory management, which was already a top priority — and pain point — for distribution centre managers. More inventory means your DC will need more granular and accurate tracking to ensure stock doesn’t go missing, and that inventory is continuously maintained at optimal levels.

There’s also the risk of redundant processes across disparate distribution centre operations, which can end up costing you considerable time, effort and (of course) money. This risk only grows when DCs don’t have the technology and oversight they need to manage rising inventory and expanding operations.

Here’s the thing: If you’re asking yourself this question, the answer is almost certainly yes.

If any of the above issues sound familiar, and you’re one of many distribution centre managers dealing with increasing demands, product diversification and rising inventory, you need a way to track, measure and see all of this activity.

This is where your ERP solution comes into play, providing you and your team with powerful features to manage your distribution processes and ensure that nothing falls through the cracks.

Here’s just a taste of the functionality that a best-in-class ERP solution like NetSuite can offer:

• Secure access portals: This includes access for you and your internal distribution centre stakeholders, as well as your other supply chain vendors and customers. NetSuite allows you to set up portals with unique views for the other vendors you work with, and your customers on the other end, so everyone knows what’s going on with order fulfilment and delivery.
• Sourcing controls: NetSuite enables you to centralise and unite your purchase and supply orders, so you can get the full picture of your current supply and transactions in process. You can also analyse your supplier performance to ensure you have the right partners in place, and create a custom purchase order approval workflow to keep things running smoothly.
• Accurate forecasting to support planning: An ERP software also enables you to generate accurate reports based on your current sales levels, so that your supply orders are perfectly aligned. This means you can minimise the amount of dead and obsolete inventory taking up space in the warehouse.
• In-depth inventory visibility: ERP software does more than simply let you track inventory; you can also examine your inventory to sales ratios and reduce your inventory costs accordingly.
• Fulfilment parameters: Boost efficiency and save time and money with your picking, packaging and shipping. An ERP system like NetSuite will change the way you approach fulfilment, and allow you to break things down by zone and wave picking, so your floor employees operate efficiently. In other words, the closest employee picks items based on zones, so your workers (or automated picking bots) aren’t spending more time than necessary running all over the warehouse to fulfil an order.

The right ERP solution can disrupt your distribution centre operations — in the best way possible. But it’s important you find an implementation partner that listens to your needs and can work with you to deploy an ERP solution for maximum return and minimal disruption to your business as usual.

There are a couple key things to look for with your technology partner, but the best providers are those that have worked with companies like your own, and know what’s truly possible. They are partners well beyond the technological change.

Here at Fusion5, we’re experts not only in NetSuite but in the best way to leverage ERP for your distribution centre. Our wholesale distribution clients have reported a range of advantages after making the switch to NetSuite, including improvements in actionable business insights, gross margin performance and revenue.