A lot of people walk the streets of a city such as New York or Toronto and have no idea the kind of products that go into building up a city like this. Well, if you live in Toronto, you may think you know what goes into a building because the construction just doesn’t seem to end…
But the never-ending loom of Toronto construction is not the purpose of this post. The purpose of this post is to help distributors of industrial products find the right fit of software to best suit their business needs. The reason why I say that a lot of people walk the streets and don’t know what goes into it is that it’s true. Most people don’t know how many kinds of elbow pipes are available, let alone do they know what they are used for or the best ways to manage these kinds of products. In this post, we’ll discuss the Industrial Distribution Industry from nuts and bolts to pumps and motors to piping.
Distributors who are buying and selling industrial products need to have the right software in place that can manage tracking products throughout the supply chain, can help you identify the true costs of obtaining the products and can help you manage multiple SKUs. ERP software or Enterprise Resource Planning software which is an all-in-one solution is perfectly suitable for industrial product distributors.
ERP includes a robust feature set such as:
- Accounting functionality much more robust than an introductory system such as QuickBooks
- Inventory management
- Lot tracking
- Landed cost tracking
- Barcode scanning capabilities
and, one of the most crucial pieces of functionality for businesses buying and selling industrial products; product matrix. Let's take a look at some of this functionality in more detail below.
Lot tracking within the supply chain can be difficult, especially with interruptions caused by global environmental factors. No matter the unit of measure you are purchasing a product in, the software that you use, should give you the ability to track which lot or batch one single item came from. An infamous example of how useful lot tracking can be is the 1998 Goodman Recall to Replace HTPV Pipes. The HTPV Pipe used in about 8,000 mid-efficiency gas furnaces was susceptible to cracking and corrosion which could result in the release of carbon monoxide. Theoretically in a similar situation, the manufacturer of these pipes and the distributor of these pipes should be able to track every single piece of piping due to lot tracking.
Landed Cost Tracking
In order to run a business successfully and understand the costs fully, you must track landed costs. The landed cost formula calculates exactly how much it costs to obtain a product. This doesn’t just consider the price, but also duty, freight, wharfage and more. Once you know the true cost of a product, you can then informatively decide on how much you want to sell it for and understand what your profit margin will be.
Barcode Scanning technology is really a useful tool in any industry. If you have not yet considered implementing barcode scanning technology as part of your digital transformation, now is the time to do so to start automating more of your business processes. Barcode scanning allows your warehouse employees to scan products coming into the warehouse and products shipping out to easily update inventory quantities and details. This tool for inventory management is faster and more efficient than manually tracking with pen and paper or having to update information across multiple, standalone solutions. There is less human error and information is available to all members of your team (including people in accounting), much faster.
Matrix functionality is often associated with apparel products, but it is actually very useful for product variables in the industrial industry. Think about how some inventory items may vary in different elements such as size, color, length, finish, diameter, etc. For example, the elbow pipes we mentioned earlier. If you sell them by each's, then every single pipe product will need its own SKU. Especially if they vary by length, diameter, and material. A product matrix can help you create and manage SKUs for every type of group and display them in a matrix for easy viewing and order entry.