This document discusses how enterprise resource planning (ERP) solutions can help wholesale distributors drive operational excellence and profitable growth. It describes how ERP solutions can replace multiple legacy IT systems, unify business processes and data, and improve efficiency. The document also outlines key challenges wholesale distributors face related to growth, complexity from mergers and acquisitions, and meeting rising customer expectations. It argues that ERP solutions provide powerful functionality tailored for the wholesale distribution industry to help companies address these challenges.

1. SAP Thought Leadership Paper
Enterprise Resource Planning
Enterprise Resource Planning Solutions for
Wholesale Distributors
Driving Operational Excellence and Profitable Growth

2. 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

3. Comprehensive enterprise resource planning (ERP) solutions
can replace multiple IT systems, unify business processes and
data, and improve efficiency across the organization. ERP
solutions provide powerful and flexible functionality tailored to
the needs – and budgets – of wholesale distributors. With ERP
solutions, distributors gain strategic insight to drive operational
excellence and profitable growth. In short, the solutions lay the
foundation for companies like yours to successfully execute
business strategies.
SAP Thought Leadership Paper – Enterprise Resource Planning Solutions for Wholesale Distributors 3

4. HoW ERP SoLuTIonS CAn HELP
What It Takes to Succeed
in Wholesale Distribution
Success in the wholesale distribution MEETIng THE CHALLEngES
industry 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 increase
companies know that operational excel- customer loyalty through improved mul-
lence is key to meeting these and other tichannel ordering processes. You can
challenges. But too often, manual pro- buy better by taking advantage of every
cesses, disparate systems, and informa- supplier discount and tightly managing
tion latency make it difficult to optimize supplier chargebacks. You can operate
business activities, control costs, and more efficiently by replacing low value
create efficiencies needed for competi- activities with ones that provide greater
tive advantage. business benefit.
A growing number of distributors are
driving the trend of replacing patchwork PREPARIng foR BETTER TIMES
systems with a single, comprehensive
enterprise resource planning (ERP) solu- Implementing new systems is a strategic
tion. With ERP solutions, distributors can undertaking and requires contributions
enable and improve enterprise processes, from the best people in your organiza-
meet customer and supplier needs, and tion. This means that high operational
streamline 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 to
excellence and sustainable, profitable transform end-to-end processes across
growth. Industry-specific functionality the organization – by investing in people
provides 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 implementation
processes 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 new
ciency, and reduce costs. business experiences and insight and
share them with management and
colleagues.

5. WInnIng CoMPETITIvE ADvAnTAgE THRougH PRoCESS EffICIEnCY
Growth, Complexity, and Profits
Efficiencies gained from interconnecting have recently acquired or are seeking to
data and processes foster not just acquire another company to expand into
growth but manageable and profitable new territories or broaden product lines
growth. Agile distributors who leverage and services. But consolidation has
ERP solutions have the advantage over inherent challenges. Acquisitions create
traditional distributors who continue to larger organizations requiring greater
rely on outdated and disparate systems. management capabilities, and they
increase complexity by bringing together
SERvIng CuSToMERS new people, products, and processes.
Mergers often saddle the organization
To win new customers and keep existing with legacy systems and custom applica-
ones, distributors need to better under- tions running on a variety of operating
stand customers and drive excellence systems and platforms.
in all areas of the business. Customers This can result in disconnected data
expect high-quality service and flexibility; and a lack of useful information about
online access to pricing, availability, and operations, finance, and customers.
delivery information; and value-added Inflexible systems slow reactions to
services such as kitting, labeling, and changing business conditions. And IT
expediting. costs are high – in terms of both capital
and human resources – to integrate and
gRoWTH THRougH ConSoLIDATIon maintain numerous systems. In short,
mergers and acquisitions, while often
Mergers and acquisitions are an impor- essential, can lead to disruptive rather
tant 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

6. SoPHISTICATED, fLExIBLE, AnD AffoRDABLE ERP
Support Tailored to Your Industry
Enterprise systems have often been per- greatly reduced – giving decision makers and systems integrators with years of
ceived by wholesale distributors as out of a single, unified view of key performance experience. ERP solutions typically can
reach, 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 individual
to make it cost-effective for companies MoDuLAR DEPLoYMEnT specifications.
of any size to successfully implement
ERP solutions and accelerate business ERP technology is modular and can be EnABLIng oPERATIonAL
value. For example, SAP estimates that deployed flexibly. You can implement IMPRovEMEnTS
wholesale distribution companies with functionality to meet your most pressing
US$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, reduce
hensive and flexible functionality for other requirements. A standards-based redundancies in back-office and logistics
distribution processes and are precon- platform supports integration with processes, and establish shared service
figured 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, and
The solutions support a broad range enterprise. maintaining legacy and point solutions.
of industry- and subindustry-specific Customer and supplier relationship
processes including demand and supply fAST IMPLEMEnTATIon management tools help meet rising
planning, procure to pay, warehouse expectations and enable new value-added
management, order to cash, chargeback With mature, streamlined implementa- services. A single enterprise platform
and 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 to
of 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.

7. A BETTER unDERSTAnDIng functions, improving operational deci- LEaRn MoRE
of 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 support
Powerful analytical tools help identify fast return on your investment. You can growth with flexible, industry-specific
trends and patterns in areas including reduce IT spending by integrating and functionality. They help you make better
operations and profitability. In an envi- optimizing core processes and standard- decisions based on current information and
ronment 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 capacity
the 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 with
tomer’s spending and cost to service, purchase requisitions, get a better view
suppliers
you can better understand what and why of profits and spending to drive effective • Supply chain execution – Enable inbound
high-profit customers buy from you – negotiations with suppliers and custom- and outbound processes and warehouse
and how to better serve them. You can ers, and reduce open vendor accounts management
analyze information and test scenarios receivable balances. You can increase • order-to-cash process – Manage sales
channels and services
to 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 processes
The SAP® ERP application and SAP accounting and controlling, increasing
The SAP Best Practices for Wholesale
for 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.

8. www.sap.com/contactsap
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