Warehouse management and scanning solutions

Using Your ERP Software To Build Better Stakeholder Relationships

Using Your ERP Software To Build Better Stakeholder Relationships

Wholesale companies take a risk when they hold inventory so that products are available when their customers need them.

Although unpredictable, this has always been an accepted part of the business.

However the damaging losses caused by too much safety stock, and subsequent stock obsolescence, could be better contained with strategic management of inventory. This is made possible by new technology.

Leverage Retailer Relationships

Excess and obsolete inventory is costing the typical distributor 25% total stock value a year. These are unsustainable odds. The longer stock is on the warehouse floor it is likely to depreciate in value through damage, wear and tear, and expected obsolescence. It is also taking up space that could be used for more profitable product prospects.

While a retailer’s point of sales (POS) data is beyond the remit of a wholesaler, both parties share a mutual goal: better profit margins. Cultivating better relationships and information sharing will lead to greater insight and more informed decision-making for both retailers and wholesalers. With enterprise resource planning (ERP) software, the wholesaler has access to data that is valuable currency for retailers. Similarly, retailers communicating changes in demand – rather than making predictions based on order history, have obvious benefits to the wholesaler’s management of safety stock.

Better knowledge of supply and demand is ultimately facilitated by a wholesaler ERP. The system has the capacity to analyse and process large quantities of data, not just across time periods, but in different sections of the outlet hierarchy (e.g pubs vs. hotels), and in different sections of the product hierarchy (e.g. wines vs. spirits). If a retailer has a hunch that a new product isn’t causing the predicted excitation and returns, wholesalers can contribute to knowledge by evaluating its performance in other outlets and contexts.

In turn, building up a detailed sales picture of each outlet and the performance of its lines can assist the wholesaler in the management of their own inventory, leading to less stock lingering in darkened recesses of the warehouse. By strategising with the retailer, the wholesaler can more accurately plan what products will be needed, in what amount, and when they will be required. Identifying changes in demand before they are visible in the order flow avoids a multitude of problems. With reduced quantities or product lines, the complexity and cost of inventory management is also minimised.

Plan, Budget And Compare

Fostering good relations with retailers via insights and data is one thing, but ultimately retail buyers should have a strategic criteria for purchasing – many do not. Why should the wholesaler suffer the effects of the customers’ poor planning on its own bottom line?

Moving to systems that add value to decision-making and reduce the amount of money tied up in inventory is key to generating profits. Using a wide range of variables, ERP software can pinpoint information that allows the wholesaler to see trends and spending patterns. They can then analyse this, and in conjunction with their customers, use it to plan for the future. In addition to this, operational data harvested from sales and marketing teams can be used to make faster, more strategic decisions that directly benefit their business.

Improved Customer Service Standards

For those retailers that do have a buying strategy, who they buy from is just as important as what they are buying. During a push to streamline or ‘right-size’ their number of suppliers, wholesalers need to ensure that below par customer service doesn’t stand in the way of their making the final cut.

Wholesalers should evaluate what they are offering their customers in terms of product knowledge, operational insights and industry best practices. With the help of the ERP, sales reps can make suggestions and recommendations based on information immediately available via the system. Not only will this improve customer service standards, but it will lead to a reciprocal relationship where the retailer looks to the wholesaler for strategic planning help.

Order Making, Not Order Taking

Technology can assist in strategic planning and minimising risk when it comes to inventory overstock. Live customer information gives reps an up to date picture of their customer’s account, and can help to avoid, even reduce, bad debts.

The ERP can ensure that customers not only get the correct prices for high demand products, including discounts and promotions, but it can also flag up additional inventory that has overstayed its welcome on the warehouse floor. The sales reps are then empowered to pitch the overstock to the retailer for a keen rate. Sales reps can also be given the ability to change prices, within predefined limits, allowing them leverage to close each sale.

Whilst creating orders, sales staff can also view profit indicators for both the overall order, and for each product within an order. This helps avoid loss-making orders, and drives sales reps to meet their targets with each order.  The profit indicator on each product line allows sales reps to suggest high-margin products, helping with overall profitability.


The use of sophisticated technology has radically changed the way wholesale companies work with their suppliers. They now have unprecedented capacity to transfer and process large quantities of data.

They can use this to leverage better relationships with retailers, amend sloppy strategies that are bad for the wholesaler’s business, and form the basis of exemplary customer service. Importantly, rather than being caught up in the doldrums of daily operations, technology can set businesses free to pursue their strategic goals.

Did you miss out on last week’s blog? Do you want to find out how mobile apps are helping sales reps like your’s to make more sales in the drinks distribution business? Click HERE to learn more!