Enterprise resource planning solutions for wholesale distributors
SAP Thought Leadership PaperEnterprise Resource PlanningEnterprise Resource Planning Solutions forWholesale DistributorsDriving Operational Excellence and Profitable Growth
Table of Contents 4 What It Takes to Succeed in Wholesale Distribution Meeting the Challenges of Lean Times Preparing for Better Times 5 Growth, Complexity, and Profits Serving Customers Growth Through Consolidation 6 Support Tailored to Your Industry Comprehensive Functionality Modular Deployment Fast Implementation Enabling Operational Improvements A Better Understanding of Profitability Wholesale Benefits with SAP
Comprehensive enterprise resource planning (ERP) solutionscan replace multiple IT systems, unify business processes anddata, and improve efficiency across the organization. ERPsolutions provide powerful and flexible functionality tailored tothe needs – and budgets – of wholesale distributors. With ERPsolutions, distributors gain strategic insight to drive operationalexcellence and profitable growth. In short, the solutions lay thefoundation for companies like yours to successfully executebusiness strategies.SAP Thought Leadership Paper – Enterprise Resource Planning Solutions for Wholesale Distributors 3
HoW ERP SoLuTIonS CAn HELPWhat It Takes to Succeedin Wholesale DistributionSuccess in the wholesale distribution MEETIng THE CHALLEngESindustry calls for action on several fronts of LEAn TIMES– to foster growth in an uncertain econ-omy, thrive amid the complexities of Sophisticated ERP solutions make it eas-mergers and acquisitions, and meet ier for others to do business with you.rising customer expectations. Leading With ERP solutions, you can increasecompanies know that operational excel- customer loyalty through improved mul-lence is key to meeting these and other tichannel ordering processes. You canchallenges. But too often, manual pro- buy better by taking advantage of everycesses, disparate systems, and informa- supplier discount and tightly managingtion latency make it difficult to optimize supplier chargebacks. You can operatebusiness activities, control costs, and more efficiently by replacing low valuecreate efficiencies needed for competi- activities with ones that provide greatertive advantage. business benefit. A growing number of distributors aredriving the trend of replacing patchwork PREPARIng foR BETTER TIMESsystems with a single, comprehensiveenterprise resource planning (ERP) solu- Implementing new systems is a strategiction. With ERP solutions, distributors can undertaking and requires contributionsenable and improve enterprise processes, from the best people in your organiza-meet customer and supplier needs, and tion. This means that high operationalstreamline mergers and acquisitions. demands during a bullish economy often ERP solutions help companies like preclude new projects.yours proactively meet changing market The present business environment,requirements and achieve operational however, provides rich opportunities toexcellence and sustainable, profitable transform end-to-end processes acrossgrowth. Industry-specific functionality the organization – by investing in peopleprovides powerful business tools to track and IT systems to better navigate cur-and drive performance and profitability, rent challenges and profit from an eco-integrating information with business nomic recovery. An ERP implementationprocesses and enabling better monitor- is also an opportunity to increase com-ing and control. With ERP solutions you pany expertise and productivity, as peo-can streamline operations, improve effi- ple who work on the project gain newciency, and reduce costs. business experiences and insight and share them with management and colleagues.
WInnIng CoMPETITIvE ADvAnTAgE THRougH PRoCESS EffICIEnCYGrowth, Complexity, and ProfitsEfficiencies gained from interconnecting have recently acquired or are seeking todata and processes foster not just acquire another company to expand intogrowth but manageable and profitable new territories or broaden product linesgrowth. Agile distributors who leverage and services. But consolidation hasERP solutions have the advantage over inherent challenges. Acquisitions createtraditional distributors who continue to larger organizations requiring greaterrely on outdated and disparate systems. management capabilities, and they increase complexity by bringing togetherSERvIng CuSToMERS new people, products, and processes. Mergers often saddle the organizationTo win new customers and keep existing with legacy systems and custom applica-ones, distributors need to better under- tions running on a variety of operatingstand customers and drive excellence systems and platforms.in all areas of the business. Customers This can result in disconnected dataexpect high-quality service and flexibility; and a lack of useful information aboutonline access to pricing, availability, and operations, finance, and customers.delivery information; and value-added Inflexible systems slow reactions toservices such as kitting, labeling, and changing business conditions. And ITexpediting. costs are high – in terms of both capital and human resources – to integrate andgRoWTH THRougH ConSoLIDATIon maintain numerous systems. In short, mergers and acquisitions, while oftenMergers and acquisitions are an impor- essential, can lead to disruptive rathertant aspect of growth in the wholesale than profitable growth.distribution industry. Many distributors ERP solutions help companies like yours proac- tively meet changing market requirements and achieve operational excellence and sustainable, profitable growth.SAP Thought Leadership Paper – Enterprise Resource Planning Solutions for Wholesale Distributors 5
SoPHISTICATED, fLExIBLE, AnD AffoRDABLE ERPSupport Tailored to Your IndustryEnterprise systems have often been per- greatly reduced – giving decision makers and systems integrators with years ofceived by wholesale distributors as out of a single, unified view of key performance experience. ERP solutions typically canreach, designed for larger, global organi- indicators. be used as is, but they can also be cus-zations. But the technology has evolved tomized and personalized to individualto make it cost-effective for companies MoDuLAR DEPLoYMEnT specifications.of any size to successfully implementERP solutions and accelerate business ERP technology is modular and can be EnABLIng oPERATIonALvalue. For example, SAP estimates that deployed flexibly. You can implement IMPRovEMEnTSwholesale distribution companies with functionality to meet your most pressingUS$25 million or more in revenue can business needs – perhaps finance or HR ERP solutions drive operational effi-benefit from such solutions. Industry- – and then add functionality to support ciency and profitability. You can central-specific ERP solutions provide compre- sales, procurement, warehousing, and ize control over operations, reducehensive and flexible functionality for other requirements. A standards-based redundancies in back-office and logisticsdistribution processes and are precon- platform supports integration with processes, and establish shared servicefigured for fast implementation. third-party and custom applications, centers to support processes such as which means you can continue to use human resources and finance. The soft-CoMPREHEnSIvE funCTIonALITY specialized or homegrown systems as ware reduces or eliminates IT costs asso- necessary and connect them with the ciated with developing, mapping, andThe solutions support a broad range enterprise. maintaining legacy and point solutions.of industry- and subindustry-specific Customer and supplier relationshipprocesses including demand and supply fAST IMPLEMEnTATIon management tools help meet risingplanning, procure to pay, warehouse expectations and enable new value-addedmanagement, order to cash, chargeback With mature, streamlined implementa- services. A single enterprise platformand financial management, and business tion processes, you can have an ERP enables supplier consolidation and collab-analytics. Because processes are han- solution in place in a few months, with oration. You can more easily share infor-dled on a single platform, the “siloing” minimal disruption to daily operations. mation with and extend processes toof information and processes that Preconfigured applications incorporate external partners, ultimately strengthen-can impair operational performance is best practices developed by distributors ing supplier and customer relationships.
A BETTER unDERSTAnDIng functions, improving operational deci- LEaRn MoREof PRofITABILITY sion making, control, and strategic plan- The SAP® ERP application and SAP for ning. With the solutions, you can realize a Wholesale Distribution solutions supportPowerful analytical tools help identify fast return on your investment. You can growth with flexible, industry-specifictrends and patterns in areas including reduce IT spending by integrating and functionality. They help you make betteroperations and profitability. In an envi- optimizing core processes and standard- decisions based on current information andronment of decreasing product differ- izing enterprise software on a single adapt to new business opportunities. The solutions enable:entiation, it is difficult to drive profits platform. • Supply chain planning – facilitate opera-through products alone. Distributors SAP solutions improve gross margins tional planning including advanced de-must focus on identifying and targeting and reduce cost of goods sold by opti- mand and supply planning and capacitythe best products and the best custom- mizing buying activities and increasing forecasting for transport fleets ers. With an accurate view of each cus- vendor cost recovery. You can combine • Procure-to-pay process – Manage strate- gic and operational relationships withtomer’s spending and cost to service, purchase requisitions, get a better view suppliersyou can better understand what and why of profits and spending to drive effective • Supply chain execution – Enable inboundhigh-profit customers buy from you – negotiations with suppliers and custom- and outbound processes and warehouseand how to better serve them. You can ers, and reduce open vendor accounts managementanalyze information and test scenarios receivable balances. You can increase • order-to-cash process – Manage sales channels and servicesto improve customer and product revenue by improving order cycle times • Chargeback management – Manage ven-profitability. and service levels, optimizing pricing, dor cost recovery and drive profitability and providing new value-added services. • Enterprise management – Support finan-WHoLESALE BEnEfITS WITH SAP Additionally, you can reduce operating cial, HR management, and business ana- expenses by improving efficiency in lytics processesThe SAP® ERP application and SAP accounting and controlling, increasing The SAP Best Practices for Wholesalefor Wholesale Distribution solution port- warehouse personnel productivity and Distribution package provides preconfigu-folio increase organizational efficiency inventory turns, and improving materials ration that enables a variety of processes.and provide visibility across all business management. These include sales order processing via electronic data interchange, consignment processing, returns and complaints, foreign trade, and enterprise management pro- cesses such as product cost planning, sales planning, and overhead cost management. To learn more, contact your SAP represen- tative or visit us online at www.sap.com /industries/wholesale-distribution.