Distribution Industry: Are You Missing Hidden Value in Your Technology Investments?


By Robert Morgan

For most distributors, growth and profitability depend on their ability to effectively and efficiently manage operations, such as inventory, warehouses, fleets and order fulfillment. Inventory and warehouse management are key focuses of operations, and distributors are always looking for opportunities to reduce supplier costs and increase their inventory turns, among other things. Furthermore, many distributors own or lease a fleet of trucks, and controlling related operation and maintenance costs are important to improve profitability. Order fulfillment is also important to distributors (as well as their customers), focusing on the time it takes to fill orders and the frequency an item is out of stock.

To keep track of all the data that results from these and other operations, companies have made large investments in their IT infrastructure, including the implementation of ERP systems. Data is gathered from these systems and provided to management to analyze and make decisions meant to improve the company’s growth and profitability. The difficulty many distributors face with the systems in place today is usually not the lack of data they provide. More often, the difficulty lies in the disparate nature of the systems and lack of integration between them. Collecting and reporting on key financial and operational data from disparate non-integrated systems is extremely difficult, time-consuming and prone to human error. This hinders management’s ability to receive the key metrics necessary to drive business decisions in a timely, accurate and meaningful way.

In these difficult economic times, companies are looking for ways to maximize their current investments. Many are taking a closer look at their IT investments and recognizing a hidden value in their ERP systems through integration. Those that have taken this approach have immediately realized the benefits, such as access to timely and accurate financial and operational information, and the elimination of spreadsheets, duplicate system entries and multiple reports for data comparison.

Recent advances in financial and operational reporting tools have led to easier reporting of integrated data from multiple systems, even across multiple database platforms. The result is improved access to accurate, timely and relevant information needed to drive business decisions. By combining the key elements of your data, a more representative view of your business can be created, which is vital to the growth and profitability of your company. With improved visibility comes the ability to better manage exceptions and adjust quickly to your customers’ needs.

As noted, a company’s growth and profitability highly depend on its ability to manage its operations and the resulting key metrics necessary to drive business decisions. This requires leveraging your people, processes and technology to report the necessary data in a timely accurate manner to management. Considering the nature of the systems in place at your organization today, your current key operational and financial reporting requirements, and the recent advances in technology discussed, is your organization missing any hidden value in its technology investments?

For further information, please contact Bob Morgan, Technology Advisory Services, at (412) 697-5211 or rmorgan@schneiderdowns.com.

Interested in receiving more timely articles like this one with topics that are relevant to your businessClick here to sign up for our weekly newsletters.  Or, if you'd like more information on Schneider Downs Technology Advisory Group, visit our webpage.



Schneider Downs provides accountingtax, wealth management, technology and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH. 

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.