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Distribution

Older, legacy distribution systems usually have specific shortcomings that continuously require filling gaps left by weak or inefficient processes.  This can waste money and time.  When the business grows or expands, these problems tend to multiply.  Recent examples we have seen include:

Shipping System not Integrated.  Has this ever happened to you? Your customer moved and the customer service department put the new address in the computer, but the shipping system is not integrated.  So the shipping system prints a label to ship product to the old address.  The shipment arrives on time but is refused and you pay the return freight.  But this lack of integration costs much more than that -- the customer gets his shipment late and the shipping and receiving department handles the shipment twice.

Manually Pricing Orders.  When the system cannot completely automate order pricing rules, exceptions for promotions or high-volume customers must be priced by the customer service staff.  This puts additional burden on their management to educate the customer service staff and increases the risk of pricing errors.  If the customer service staff turns over frequently, the number of pricing can errors will grow significantly.  Of course, pricing errors have their own penalties: irate customers, lower margins, eroded confidance.

Frequent Physical Inventories.  To cover up mistakes in receiving or shipping, distributors are sometimes forced to perform physical inventories either quarterly or monthly.  This takes valuable time away from operations and adds to administrative costs.  These physicals are necessary only because frequent mistakes occur in other areas or the procedures and controls required for accurate inventory are not in place.

Paper Confirmations and Statements.  Distributors often tell us that their legacy software typically cannot email customer-facing documents.  This:

The effects of this deficiency can include more phone calls from the customer, higher administrative costs in customer service, and higher collection costs for late-paying customers.