Insights into Distribution

Contributed by Eric Allais, CEO, PathGuide Technologies

If you’re thinking about switching to a new WMS, you’re probably more than a little intimidated. That’s normal—it’s a vital business decision, and you want to be sure you’re making the right one. Replacing your WMS might pay off in the long run if the new system offers enough improvements over the old one to make the implementation process worthwhile.

When contemplating a better WMS, the most important question is how your current WMS is holding back productivity. Matching requirements to functionality will help you identify the areas where you need to improve warehouse operations, making it easier to know what features to look for in a new system.

The following points will help you navigate the selection process.

Does your WMS integrate with your ERP system? This is the most obvious question. Many smaller WMS providers now support major ERP systems, so you’re no longer locked into the WMS provided by your ERP vendor.

How experienced is your implementation team? Switching to a new WMS may involve changing warehouse processes, retraining employees, and adapting to the new system, but a well-planned and executed implementation makes this much easier. Ask how much experience the vendor’s implementation team has and how their past implementations have gone. This will give you perspective to help make the WMS migration as minimally disruptive as possible.

Is your WMS customizable, and how easy is that process? This question is vital. Every company has its own unique business processes and the WMS will usually have to be tweaked to fit them. How responsive is the vendor? Make sure to take the cost of enhancements into account when calculating the overall price of the upgrade. If it’s difficult to modify the WMS, how will that affect your workflow? On the other side, an easily customizable WMS can improve your warehouse in ways you might not realize. As examples, we have customers that have created unique will-call systems or customized modules for managing cut items, such as wire.

What kind of support do you offer? Will I get a live person on the phone when I call? Can I call 24 hours a day? What’s the average response time? Problems will come up with any new system, so be sure you can solve yours quickly. Find out as many details as you can about the training process ahead of time, because this will let you know how easy (or difficult) you can expect it to be. Being able to talk to a local product expert any day of the week is much different than getting a phone number for a help-desk call center in a foreign country.

Can your WMS integrate with carousels, vertical lists, and/or conveyors? Many small and medium-sized distributors find that these material handling systems are good ways to expand their operations without adding more floor space. If you’re a growing company, looking for a WMS that integrates with these can make it easier to expand a few years down the line.

Can your WMS extend to provide small parcel carrier shipments, including less-than-truckload? With the rise of ecommerce, single-item shipping is only going to increase, so make sure your new WMS can handle it.

Does your WMS automate the handling of inbound dock scheduling? We’ve seen a trend in the WMS industry toward modules that let you schedule incoming freight. Some WMS vendors also offer transportation management systems. This could be a good way to make your unloading and shipping processes more efficient, particularly if your company isn’t big enough for a full Yard Management System.

Upgrading your WMS doesn’t need to be complicated, as long as you plan for it. Armed with answers to these questions, you’ll be well prepared to make the right decision to create significant opportunities for your company. Best of luck in your search!

At TUG Connects! 2016 last month, anyone who attended one of the three sessions delivered by Grant Howard, CEO of Grant W. Howard Co., came away with a new sense of their business mission.

For years, Howard has been urging distributors to focus on three key objectives: Customer experience, profitability, and growth. At his much-anticipated best practices inventory management spring workshop, he’ll be hammering away at the message he delivered at TUG Connects!: We know what to do, and it’s time to deliver.

Vision to Results

The connection from vision to results is where the best strategies often go off the rails. “What matters here is helping distributorships develop their mission, their strategy, and their strategic objectives, but then ensuring that what we do at the tactical, action level lines back up with that,” Howard says. “It’s basic, but it’s an area where companies struggle so much.”

From the executive level on down, that means a standard formula for success: set objectives, establish ownership, then measure performance.

Metrics and Measurement

Measurement “is the huge missing piece in most companies,” Howard notes. “We geared a lot of the discussion at TUG Connects! around how to set objectives you can measure, then how to measure to drive results. Because measurement is what connects the strategy with the tactics and results.”

The key takeaway: While software enables solid measurement, it can’t do the whole job on its own. “They call it business intelligence and business analytics, but unless you know what to do with the tools, it isn’t very intelligent or analytical,” he says. “The real question is whether your data search is well enough aligned to take you on a guided fishing trip, rather than an unguided voyage where you hope to find something.”

Inventory

All 10 of Howard’s inventory management best practices are embedded in all of Infor’s current distribution ERPs, but the right tools can’t deliver against poor strategy or weak implementation. The first step in getting strategy right is to understand distribution’s unique, indispensible role in modern supply chains.

“Inventory is the reason for being for distributors,” he says, because “distributors are the buffer. Manufacturers can’t produce to demand, and they don’t want to produce to warehouse it. End users don’t want to buy in large quantities.”

So “distribution was formed in the middle,” with the result that “inventory is the core of our being. That’s what our business is. And yet, so many distributors just do such a poor job with it.”

An Inventory Strategy that Pays for Itself

The great thing about a strategic approach to inventory management is that the effort pays for itself.

“If your company is not making best use of the new technology available from Infor to manage your inventory, it’s missing the tools and processes to drive stellar customer experience, profitability, and growth,” Howard warns. He’s more modest about describing his own workshop as an essential tool for success, but the testimonials from last year’s event tell the story.

“Easy to follow step-by-step of how it all works and see the big picture,” wrote one purchasing manager. “Presentation was great—energetic. Experience was educational—Not the least bit boring. Time flew by—Open to all questions—Great information!”

“I have been with my company for almost eight years, and I’ve learned more in three days than I’ve learned in those eight years,” agreed an inventory analyst in the class of 2015. “You’ve hit on every point that I’ve been missing to make my job so much easier. I greatly appreciate you for making this so simple.”

Click here for more information on Best Practices Inventory Management with Grant W. Howard, June 7-9, 2016 in Novi, Michigan.

A whole-company approach is what master strategist Grant Howard recommends for distributors who want to excel in a competitive marketplace. In this exclusive interview with TheUserGroup.org, he lists four steps executives can take to keep their businesses focused, productive, and strong.

Keep Your Customers at the Forefront

A company’s major objectives are profitability, longevity, and growth. But when distributors put all their emphasis on gross margin and return on assets, “it often leads into poor directions for the longevity of our company,” Howard warns.

“What often happens is that we’re so focused on the bottom line that we forget about the customers who actually keep us in business.” Executives can balance their objectives by turning their attention to vendor performance, employee productivity and, most important, the customer experience.

“The big areas we talk about today are the elements of a perfect order,” he says. “What is our fill rate? Do we have the right inventory when they need it? What’s our on-time delivery? And can we do this accurately, delivering the right product, the right quantity, and the right price?”

Metrics and Measurement: Too Much, Not Enough, or Just Right?

Distributors have access to far better business intelligence (BI) and business analytics (BA) than ever before, but Howard says many of them are still struggling to make good use of the tools that are available to them.

“A lot of companies just don’t measure, or they put out their objectives and go back at the end of the year to see if they’ve hit them,” rather than measuring more frequently and issuing course corrections as needed.

At the other end of the spectrum are the companies that “measure too much, or measure the wrong things,” he says. “They’re so overloaded with data and analysis that they lose sight of what their measurement is telling them,” going on an “unguided fishing trip” rather than “knowing what they’re looking for and checking their results.”

Infor has done its part by delivering the right software tools for BI and BA. TheUserGroup.org does the rest, creating a forum for members to learn from each other while bringing in podium presenters like Howard for expert guidance.

“You often see a company that says, ‘no, we can’t do that, it’s too hard,’ and then they meet someone who’s doing it,” Howard says. “When you talk to someone who’s successful, they’re excited about the results, and they tell you how it helped change their company, that gives you the impetus to do it yourself. Companies get to share at TUG, and that gets them on the path.”

Standardize Before You Optimize

There’s no point trying to optimize business processes that are already holding your business back. “Many companies think they can buy some technology, push the button, and it fixes whatever they’re trying to fix,” Howard says, but “technology just speeds up whatever you apply it to. If it’s a good process, technology will improve its accuracy, speed, and efficiency.” But with a poor process, or no process at all, “it only speeds up how quickly we can mess it up.”

The solution is to review and refresh business processes, get the right technology in place to support them, and make sure every employee knows how to make best use of the system. “Education is the key that ties our processes together with our technology, all leading to better accuracy, consistency, and efficiency within our companies,” Howard stresses. Which means the many distributors that lack formalized training and education programs are losing efficiencies and leaving money on the table.

Technology from End to End

In a bid to cut costs, many distributors have eliminated the technology operations staff who could take an end-to-end view of the enterprise and optimize business processes. Howard says that’s unfortunate, but “it’s not that we don’t have that body on payroll. It’s that we don’t have that way of thinking,” with the result that companies “chase fires, chase symptoms, rather than chasing root issues.”

Too many executives are so busy doing their business that they’ve forgotten how to look at their businesses, he adds. “They need to put together the right processes, utilize the right technology, and make sure employees know how to do it. It’s magical when that comes together.”

Visit the TUG website.

Thought leadership works best when everyone in an organization can contribute their unique knowledge and learn from each other. That principle—members helping members—has always been at the core of TheUserGroup.org’s success.

Now, we’re realizing that IT departments are the enablers for the knowledge and systems that will help their companies succeed. And that TUG is the place for everyone in those companies—from IT to purchasing, from sales and marketing to the executive suite—to get the business intelligence they need to anticipate and embrace the future.

In the end, it all comes down to bringing additional value to our members. If we can lift up one idea that helps everybody’s business get a little bit better, it’s a win for our entire membership.

The Wisdom to Lead Distribution

TUG is like a sports team that consistently impresses and exceeds expectations without relying on a single superstar to save the day. Very few of us stand out on our own. But as a group, we have the wisdom to lead distribution forward, in a way that goes beyond our strength in running our Infor products.

As a group, we know what it takes to run a distributorship, and we have a track record for helping each other do that better. That’s what thought leadership is really about. And it’s a key strength that points to the value TUG can offer to every part of a distribution business.

Delivering Value Every Day

At our annual conference, and in our year-round communication and member networking, we’ve always delivered the knowledge our member companies need to get the most out of their back-end ERP systems. But Dirk Beveridge made a wider point with his keynote address at TUG Connects! 2015.

He didn’t just speak to the IT professionals in the room.

He focused on the dynamics in a distributorship and the value employees need to bring back to their companies, every single day, to keep those companies competitive.

It’s more than keeping the computers running, keeping the lights on, and making sure everyone has a good login. It’s about bringing together all the parts of the organization and bringing back value to the distributorship as a whole.

Leading Through IT

TUG is developing the front-end, leading-edge thinking that will give them a strategic advantage in their markets, in whichever sandboxes they choose to position themselves as marketplace leaders. That’s how we assure the health of our companies and the health of our membership.

There are other associations in wholesale distribution, but TUG’s strength is that it leads through IT. That matters, because more and more business strategy decisions start off with a technological perspective.

IT is where distributors start thinking about how to communicate with the Millennial generation—and realizing that it’s less about Millennials, more about anyone who has access to Google search.

It’s a survival tool for distributors who sell their products with a printed catalogue, a call center, and sales reps knocking on doors, in an era when customers make 50 to 70% of the buying decision before we hear from them.

Rather than trying to confront those problems from the sales side, TUG starts with the department that has the infrastructure to deliver practical, lasting solutions. When we work from that starting point, then loop back through our tried and true approach to members helping members, there’s next to nothing our companies can’t do.

David White is Chairman of TheUserGroup.org and President of Kyana Packaging and Industrial Supply in Louisville, Kentucky.