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Using Next-Generation Software to Manage Complex Distribution Channels

Businesses that connect with their customers through only a small number of distribution channels or through limited distribution pathways do so at their own risk. In modern commerce, a business might rely on direct distribution to a customer, distribution through one or more order fulfillment entities, agency or sales consultant distribution, or any of several other conduits, all of which involve tracking, shipping, and fulfillment entities that may or may not actually touch the product as they move it from a manufacturer to a customer. Any business that attempts to manage these complex channels without using next-generation software is flirting with disaster.

 Consider a typical business that sells into two markets, larger clients and small companies. This business might maintain a dedicated sales force to service larger clients, and a separate direct sales channel that cuts out sales employees for product distribution to small companies. To develop further sales, this business might maintain a network of independent dealers that are both customers and sales agents themselves, as well as a separate group of value-added resellers that bundle the business’s products with other components that are then distributed and sold as sub-assemblies.

With this structure, this typical business is already juggling four separate distribution channels. Adding direct internet sales to consumers, catalog or retail sales, or sales through consultants that contribute their own services requires managing additional distribution channels. Failure to manage any one of these channels exposes the business to a disconnect with customers in any one channel, lost sales from missed opportunities to increase sales in a channel, and failures to recognize the need to provide warranty and other services to customers in any one channel.

Next generation ERP distribution software will help any business, regardless of size, to manage any number of complex distribution channels and to maximize profits and cash flow in those channels. That software collects information and provides analytical metrics that allow a business to:

  • Understand how end users in each channel purchase products, including, for example, detailed information on order timing, shipping, add-on products, training and education, and servicing.
  • Identify partner relationships with consultants, wholesalers, and retailers who can add value at different stages of a distribution channel.
  • Build distribution channels that embody regular repeat business with partner end users, rather than one-off product purchases.
  • Eliminate pricing conflicts that might otherwise drive customers away from more profitable distribution channels;
  • Optimize revenues in each distribution channel by minimizing processing and shipment delays, and facilitating automated tracking of every order through all phases of each channel.

Businesses that ignore this information or that attempt to collect and analyze it manually will spend an inordinate amount of time on the details of order fulfillment without gaining any insights from their fulfillment process. Next generation ERP distribution software will track every shipment from production line through to an end user, regardless of what distribution channel the shipments pass through. That software will generate reports and data analysis to identify choke points and delays in order fulfillment. Accounting and finance departments will receive real-time reports on inventory and sales to generate invoices more quickly, reducing lag time between invoicing and payment. In short, ERP distribution software automates and streamlines the entire process while simultaneously eliminating problems caused by human error or duplication of efforts across multiple distribution channels.

In a world of lean inventories and just-in-time order fulfillment, businesses can squeeze additional profit out of multiple distribution channels by efficiently responding to every order. Next generation ERP distribution software is the ideal tool for that purpose.

JakeAnderson: Awestruck by Star trek as a kid, Jake Anderson has been relentless in his pursuit for covering the big technological innovations which will shape the future. A self-proclaimed gadget freak, he loves getting his hands on every piece of gadget he can afford.
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