Ordering Management for Food & Beverage Distributors
The Food & Beverage (F&B) distributor community is under increasing pressure as customers (especially large ones) seek economic benefits associated with streamlined, efficient, one-touch distribution networks. Many large distributors have responded by delivering better cost efficiencies and more reliable and responsive supply chain characteristics. This trend has served to inflate customer expectations for both large and small F& B distributors alike.
A major part of the distributor effort to pass on efficiencies to customers has focused on IT system modernization, particularly around ERP. The order management capabilities within modern ERP systems like SAP Business One have made much of the difference in F&B distributors being able to serve their customer better while delivering improved customer service and cost efficiencies. In fact, in a recent annual report by Sysco, a top strategic priority was stated as “transforming business systems”.
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What is Ordering Management in Food & Beverage Distribution?
- The administration of business processes related to orders
- Ordering management automates and streamlines order processing by constantly updating inventory information, a database of vendors, a database of customers, a record of customer returns and refunds, information on billing and payments, order processing records, and general ledger information.
- By providing real-time inventory data, it enables the complete fulfillment cycle. As orders ship, inventory allocations and deductions happen, driven by the actions of ordering management system. You can use it to process orders, ship orders, generate packing slips and things related to the pre-pick [and] pack and ship elements of fulfilling orders.
- An Order Management System (OMS) streamlines the ordering process itself. Instead of waiting for batch processes to run and begin fulfilling orders the next day, now you can fulfill orders as soon they arrive.
According to Ray Wang of Constellation Research, “Order management is a key transaction to any business operation,” he said. “You can relate that back to ERP, supply chain and everything else — everything that an organization does is going to be driven off that order. It feeds your revenue and your accounts receivable stream, which will feed the rest of the downstream processes and eventually convert it into cash. It’s also going to be part of your forecasting.”
The Benefits of Ordering Management:
- Reduce inventory by ordering items more efficiently, which lowers ‘out-of-stocks’ and reduced working capital
- Increases cash flow and working capital position
- Provides visibility into “true” and full distribution costs for each product
- Makes you able to react more quickly to profitability issues
- Helps you negotiate more effectively with vendors and customers
Where Order Management Systems are Taking Us: Better Sales and Marketing
Given that ordering management provides order guides (automatically generated lists of items that customers have ordered over specified time periods), it yields valuable data for moving beyond order taking and fulfillment to other areas of the business, such as advanced cross-selling and up-selling. The best insight into a business comes from what its customers are doing, and the key to capturing this valuable information lies in order management technology. By capturing both trend data and a wide range of information at the time of order, ordering management gives you better insights into customers’ anticipated behaviors based on their buying habits. Thus, you can target the right marketing offers to the right customers…at exactly the right time.
Having the right system and partner in place for your company is vital to improving your business process. To find out more information about SAP Business One, call us at 877-428-8486.
