Dynamics GP Makes Distribution Transparent
Posted Wednesday, February 8, 2012 by Don Kapuscinski
For many people, the distribution industry is viewed as simply “buy stuff, store stuff, and sell stuff”. How much does it take to really manage a distribution business? The answer, not surprisingly, is “how successful do you want your distribution business to be”? When should I buy new items? Is it time to off-load that stale-dated inventory? Who was responsible for buying that stale stuff in the first place? Who are my best customers? Who are my worst customers?
With Microsoft Dynamics GP, transparency is brought to all 3 sides of the distribution business: Purchasing, Inventory Control, and Sales. Dynamics GP provides key, timely insights to the movement of goods throughout your system. When this information is delivered directly to the key decision makers, your company will realize significant benefits.
Time to buy more? Use Dynamics GP desktop reminders to be alerted to low-stock situations before they become out-of-stock disasters. Use the Purchase Order Generator within Dynamics GP and let the system create replenishment purchase orders, based on the key item information regarding min/max levels, re-order points and purchase lead times.
When will my purchases arrive? Track your expected receipts in Dynamics GP and send alerts to the warehouse, notifying them of imminent arrivals on the receiving dock.
What is the true cost of my purchases? With Dynamics GP, you can track ALL of the associated costs, including freight, customs and duties, taxes and fees, as your items are received into the warehouse. For many importers, these “secondary” costs can be equal to or even greater than the cost of the merchandise itself.
Time to count? Waiting for an annual physical count of your inventory can result in costly mistakes and missed opportunities. Use cycle counting and velocity ratings to identify those high-value and high-volume items, and count them more frequently.
Where is it? Dynamics GP provides inventory management down to the bin level. Know precisely where in the warehouse your items are. When a bin is emptied during the picking process, flag it for a cycle count, and then re-use that bin.
Stale merchandise? Identify items that are past their shelf-life. Use promotional pricing to move soon-to-expire items out of the warehouse. Automated notifications can be created to alert the warehouse manager and the sales team that items will be expiring soon, time to take some action and get them sold.
Who are the best customers? Who are my worst customers. The answer here will vary, but a deep dive into margin analysis and profitability is key. With Dynamics GP, these calculations are automatically generated. Use these system metrics to identify customers for whom the cost of sales exceeds their profit contribution, and adjust your pricing and selling behaviors appropriately.
Are my prices / margins right? Well, sure, we lose money on every invoice, but we make it up on volume? Periodic sales margin analysis reports can identify those products that need to be re-priced or re-sourced.
Missed opportunities? With Dynamics GP, sales analysis can be performed on your sales orders, not just your sales invoices. This approach allows you to identify those “out-of-stock” situations that resulted in a lost sale. Incorporate this information into your purchasing decisions, and don’t get caught “short” again.
With Microsoft Dynamics GP, transparency is built-in to the system. By measuring all of the key aspects of a distribution business, Dynamics GP will provide the accurate, up-to-date information, directly to the decision-makers, needed to make the most out of any distribution business. Embrace transparency, and your distribution business will benefit!