SAP Business One for Distribution | ERP Software

With over 60,000 customers and one million users, SAP Business One is the preferred ERP solution for small and midsized distributors and the enterprise resource planning (ERP) market share leader among small and midsized businesses (SMBs). SAP Business One helps distribution businesses serve their customers better and run more efficiently.

The supply chain network is becoming more complex, and your customers want more choices, faster fulfillment, and lower prices. Distributors running SAP Business One meet these expectations by gaining a single, transparent view of their warehouse and distribution operations. Integrated functionality around financials, operations, CRM, inventory, and payroll help them deliver goods on time, boost customer satisfaction, and optimize inventory.

Your business may stock and ship hard or soft goods, food, or other items with complex serialization and lot tracking. Your business may be a mix of drop ship, third-party logistics (3PL), and stock and ship. No matter your distribution requirements, SAP Business One smooths your operations and improves your operating margin.

ERP VS WMS
Distribution Channels
Indirect Channels
Industry Challenges
The 'Next Normal'
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Features and Benefits
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People often confuse ERP and warehouse management systems (WMS); they’re different but complementary. However, SAP Business One does both – it has inherent inventory management capabilities and can serve as a complete warehouse management system.

Warehouse management systems control warehouse operations and logistics management, including receiving, inspection, acceptance, put-away, picking, and shipping. Essentially, a WMS handles inventory movement and storage, whereas ERP software handles inventory movement and management. It accounts for the status of goods and automates company-wide customer service, invoicing, ordering, reporting business metrics, and other operations.

Integrating ERP and WMS delivers powerful results. When goods move within WMS, stock levels are adjusted, inventory accounts credited or debited, inventory variances accounted for, and customer delivery dates and notices updated.

Today’s distribution channels include an array of options: the manufacturer, warehouses, shipping centers, retailers, and the internet. Due to recent events around COVID-19, direct-to-consumer (D2C) has become prevalent, enabling customers to buy goods directly from the manufacturer. There are also many indirect channels that help products reach customers.

Direct Channels for Savvy Distributors

There are many options for getting your products into customers’ hands. As a distributor, your goal is to protect margins and move products quickly to remain competitive. Consider:

Shopify and other eCommerce platforms - ECommerce platforms make it easy for distributors to set up their own online stores and ship directly to customers. These platforms can integrate with ERP systems like SAP Business One via numerous integrations.
D2C from Amazon, Facebook, etc - These popular shopping sites act as a virtual point of sale for distributors;they can take orders from the sites and ship directly to the customer. Brick-and-mortar stores also use this method to reduce warehouse costs.
Direct-to-business (D2B) - If you’re a busines-to-business (B2B) company, you’ll need to send products directly to businesses to compete on margins and convenience.
B2B Portal - With B2B Marketplace, companies with SAP Business One can offer their customers a complete B2B shopping experience by giving them online access to order and account information in a familiar shopping cart.

Because D2B and D2C may now require you to track more information than in the past, you’ll need comprehensive, easy-access views into your stock status, logistics systems, vehicles, and delivery staff. This is in addition to what you already track – highlighting the need for ERP’s comprehensive tracking and ability to share information across the business.

Amazon and large retailers can also serve as indirect channels for your distribution business. Some retailers use this method to maintain brand control and own the customer relationship.

To avoid juggling too many channels on your own, you may choose a 3PL company to perform the distribution functions to your widened customer audience.

Whether you handle it yourself or leverage a 3PL, electronic data interchange (EDI) is vital to success. EDI solutions, such as SPS Commerce, enable distributors to electronically exchange order information with a supply chain partner without manually entering or re-entering data – effectively automating any process. The result is swift order completion with no data entry errors.

SAP Business One leverages EDI to integrate your backend data, including sales, invoicing, production, scheduling, and shipping data and eliminates the manual processes associated with sharing data with business partners.

Our distributor customers use this four-step process:

Step 1. A large retailer (e.g., Crabtree and Evelyn) gets a Shopify order.
Step 2. The distributor receives the order into ERP via EDI.
Step 3. The distributor’s ERP uses EDI to automatically start 3PL fulfillment actions.
Step 4. The 3PL uses EDI to auto-update the distributor’s ERP with customer fulfillment data.

With just a cursory understanding of ERP, WMS, and EDI, it’s easy to see that small and midsized distributors face challenges. Following are the three most common challenges:

Having to lower prices to compete. Wholesale distributors have a history of thin profit margins, but lower than expected margins mean you have inefficient workflows, low inventory turns, or redundancies. Without a robust forecasting tool, your inventory will dip and spike unpredictably as market demands change. Product lifecycles can range from several months to a decade, underscoring the need for better forecasting.
Inefficiencies from non-integrated software. Many distributors combine accounting applications like QuickBooks with spreadsheets to manage inventory. Others use inventory management applications with weak integrations to QuickBooks. Either way, data resides in multiple locations, which requires employees to re-enter information to complete tasks and reconcile systems. This leads to costly data entry errors along your chain of operations.
Lack of integration with online retailers. Distributors engaged with online and offline retailers, including Amazon, need faster, more accurate invoicing practices. Retailers with Amazon-like models inform distributors of the volume of products sold at regular intervals; the distributor must invoice for the products sold. Add the days outstanding to Amazon’s standard ‘net 60’ payment terms, and you might wait 75 days for payments. Now add the potential for online sales spikes to your cash flow risk, and your business might have to turn down large orders because you lack the cash to fulfill them.

While these challenges are intensified in today’s market environment, modern distribution software lets you handle them with ease. Read the blog to understand how:

3 Common Distribution Challenges & How Technology Solves Them.

Beyond the ‘big three’ challenges, a mix of longstanding and newer challenges must be addressed by today’s SMB distributors to remain viable and competitive.

Inadequate inventory management and control

Robust inventory management helps distributors manage detailed warehouse data while tracking and recording stock movements. If your inventory management solution isn’t integrated with other applications, it’s difficult to obtain reliable, real-time information about inbound and outbound inventory shipments.

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Why Inventory Counting/Stock Checking is Important for Your Business

This blog explains why manually counting/checking stock is harmful and illustrates the dangers of three common scenarios. It also discusses ERP software for distribution checks and balances, such as detecting discrepancies. Included is a link to an information kit about in-depth inventory management issues and solutions.

Read the blog

The Importance of Inventory
Valuation

This blog assumes inventory is your most significant asset and explains why accurate measurement and valuation are critical for producing meaningful financial statements. It also describes your main inventory valuation options and the effect the right choice has on profitability, taxes, and strategic planning.

Read the blog

Product traceability and industry regulations

Distributors in the food & beverage and pharmaceutical industries must adopt technologies that support a wide range of compliance standards, particularly in product tracing. However, implementing product serialization capabilities – a prerequisite for product tracing – is challenging. You must enable collaboration with anywhere from tens to thousands of stakeholders in your supply chain and share the non-standardized data your supply chain partners need to do business with you.

Lack of visibility and poor reporting

Distributors with poor inventory visibility fail to integrate real-time inventory operations with their financials. But with margins tight, you need strong reporting to optimize inventory turns and tightly manage days sales outstanding (DSO). Many SMB distributors must manually aggregate data from multiple systems before they can report on it – a time-consuming and error-prone process.

Our ‘next normal’ arises from the need to be prepared for ongoing or sporadic circumstances that require social distancing within distribution operations and a shift toward D2C.

This will offer three new challenges:

Gaining better access to timely information
Developing D2C routes to market for a wide range of distributed products
Adapting working conditions for distance, sanitation, and efficiency

Modern B2B customers want Amazon-type data. They don’t want to order items you don’t have in stock, and they want exact delivery dates. You must meet their needs while keeping working conditions safe, efficient, and distanced.

Warehouse Automation for the Next Normal

Warehouse automation is more critical than ever. Even small operations can benefit from features in modern warehouse management systems, including:

Bar codes to improve accuracy and speed activities
Advanced picking schemes for higher worker productivity
Integrated shipping for faster order cycle times
Bins and locations that reduce picking time/distance and improve the restocking process
RFID for compliance with customer-specific labeling and shipping requirements
Container tracking for updated location knowledge and customs status
D2C features to get manufacturers closer to end customers

When integrated with ERP, there is so much a WMS can do for SMB distributors operating in the next normal.

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Why ERP & WMS Integration is Key for Warehouse Automation

This blog explains the significant differences between integrating versus interfacing ERP and WMS. It describes where ERP and WMS overlap and the benefits of complete integration within a single platform.

Read the blog

Your Distribution…Simplified

This video explains how to overcome common distribution challenges with a single software platform: ERP software for distribution.

Watch the video

Review the ERP software selection guide

Most established ERP platforms are sold and serviced through channel partners, and Vision33 is the largest SAP Business One channel partner in the world. After you’ve determined your top three choices of ERP software, consider the local partner’s qualifications. Your final decision should focus heavily on whether a partner has distribution industry expertise.

Get the guide

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Making Your ERP Shortlist: How to Decide Between Your Top 3 Choices

This blog emphasizes considering your distribution ERP software options carefully and why partner expertise and vendor support should weigh heavily in your decision. The blog also links to a six-step review process to ensure you didn’t miss critical selection criteria.

Read the blog

With over 400 employees in our offices across North America and Europe, the Vision33 team has unmatched experience delivering solutions and services to the distribution industry. We’re the only SAP Business One partner that holds the AWS SAP Competency, and our Global Services group routinely helps SMBs expand into new geographies, making us the ideal implementation partner for growing businesses.

Post-implementation, Vision33 continues to deliver value through our industry-leading support program, TOTAL Care, and ongoing ideation and implementation of services from our world-class consulting team. The team helps customers innovate using the best distribution industry-specific add-ons and integrations to support new business initiatives and evolving market demands.

To learn more about Vision33’s extensive value-add services, including TOTAL Care, visit our SAP Services Page.

Small and midsized distributors perform better when using an ERP system that delivers features, functions, and workflows that match their company- and industry-specific needs. However, many ERP solutions are off-the-shelf applications that can’t be customized. Luckily, Vision33 has deep expertise in planning and implementing SAP Business One to enable industry-specific processes that work the way you work.

As the market share leader in ERP for SMBs, SAP Business One has a massive collection of customizations and add-ons that optimize the platform’s value. Our SAP-certified consultants will deploy SAP Business One to maximize your company’s unique differentiators, and SAP Business One’s broad range of capabilities will speed your operations and maximize your efficiencies.

Integrations & Add-Ons

The Saltbox Platform by Vision33 is a cloud iPaaS (integration platform as a service) solution for enterprise integration, workflow, and collaboration between business applications. It provides a long list of pre-built connections for common business applications like Shopify, HubSpot, Concur, and Salesforce and technology connectors for SQL Server, JSON Converter, SAP HANA, REST API, and SMTP.

The Saltbox Platform supercharges your SAP Business One environment and increases the value of your existing business applications that integrate with SAP Business One.

Visit the integrations & Saltbox web page

Web Portal Add-Ons

Vision33 offers three value-add web portals for SAP Business One: Customer Portal, Vendor Portal, and Employee Portal. Each portal makes SAP Business One a powerful enabler for speeding daily work and saving your staff from the burden of mundane support tasks.

Customer Portal gives customers a secure, flexible, and personalized self-service gateway to retrieve and interact with information in a standard web browser. It’s a convenient way for your customers to make online payments and manage orders in an environment that builds your brand identity. Visit the web portal add-ons page

B2B Marketplace

Vision33 offers an exciting extension to Customer Portal, called B2B Marketplace. Companies using B2B Marketplace with SAP Business One can offer their customers a complete B2B shopping experience by giving them online access to order and account information in a familiar shopping cart format – anytime, anywhere, on any device.

B2B Marketplace features include: