MANAGEMENT + SYSTEMS
performance. If your cost to serve exceeds your margins, you’re actually hurting your company by selling more. Sometimes, your strategy is best defined by what you say ‘no’ to. But you need the data to support those decisions.
3) What inventory will I need later this year to meet customer demands?
Your ability to balance inventory needs with customer service
levels can make or break your business. The complex task of predicting what your company will need on the shelves in the near future continues to become more and more challenging, especially if you’re witnessing longer lead times due to overseas purchasing. Other factors that affect inventory needs - such as secondary processing of raw materials, service order parts, and scheduled orders - all need to be taken into account when predicting future stock levels. Using historical demand patterns to predict inventory needs
is no longer sufficient. Your business requires advanced planning tools to meet customer requirements that extend well beyond the next month or two. So, do you know exactly what inventory your business will require up to 12 months from now in order to satisfy customer demand? It should be a standard feature of any solution to analyse trends to support the purchase of stock now for long-term requirements, as well as provide with ‘What If’ features that allow you to test different scenarios. More and more, distributors are finding that the critical aspect
of inventory management is not having the stock on their shelves, but timing the inventory flow as tightly as possible to their customers’ needs. If you can’t accurately predict your required inventory levels up to a year out, you’re likely to lose business.
“Nearly 40
percent of your customers may be… margin ‘vampires’.”
4) Which of your largest customers (by sales) is trending down the fastest? As a distributor, it’s important to have up-to-the-minute visibility of trends within your business. Perhaps no trend is more threatening than a downward shift in revenue or profit percent from one of your top 25 customers. But how quickly are you able to recognise a potential change in behaviour from one of your top accounts? Relying on a periodic report from your IT staff might not provide the timeliness required to avert a potential hit to your business.
“ Analytically driven distributors know what it takes to turn data into information, information into insight, and
insight into action.”
So, how many of the above questions were you able to answer? Distributors tend to think of the inventory on their shelves as their primary advantage. In reality, the knowledge you have of your customers, products, markets, and the supply chain is your true differentiator. However, many distributors aren’t able to harness the critical information contained within their business system that can provide a decided advantage. Analytically driven distributors know what it takes to turn data
into information, information into insight, and insight into action. It starts with an investment in the right technology and qualified people to drive that vision. In a 2011 report, Nucleus Research found that for every dollar a company spends on analytics, it gets back US$10.66. In today’s market, that is a promising return on investment. Having a distribution software solution that presents you
with a comprehensive view of Business Intelligence is crucial to steering a profitable course for your business. After all, if you can’t see the entire iceberg, you’re bound to run into something you didn’t want to.
Epicor Software Corporation is a global leader delivering inspired business software solutions to the manufacturing, distribution, retail and services industries. With over 40 years of experience serving small, midmarket and larger enterprises, Epicor has more than 20,000 customers in over 150 countries. Learn more about Epicor Distribution at
www.epicor.com
134 Fastener + Fixing Magazine • Issue 79 January 2013
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