Is there really such a thing as being too successful? Yes. Have you ever won so much that you’ve gotten tired of winning? It happens. In fact, for many product-based firms, whether they’re manufacturers or distributors, going “viral” could be a bad thing. Even if viral might not be the best word for it, ‘too much success’ is incredibly dangerous.
Too Much of a Good Thing
Do you remember The Coolest Cooler—the crowdfunding campaign that raised $13 million and broke Kickstarter records? Couldn’t keep up. After years of delays, the company filed for bankruptcy and backers are getting 20 cents on the dollar.
It happens to national and multinational companies too. Did you camp out for a Nintendo Wii back in 2006-07, only to realize the store had 10 consoles? Did you try to play Pokemon Go in the first week it was released, only for the servers to be so overloaded that the game crashed every few minutes?
If you’re a distributor or importer, especially in the retail space, you probably dream of landing a ‘big fish’ kind of client—someone ready to carry your products in all their stores. But if you land a deal worth millions or tens of millions of dollars, how quickly can you ramp up your operations?
Like any of the companies mentioned above, the amount of strain this places on your operations can range from being a speed bump to becoming a big problem—especially if you don’t have systems and processes in place to handle it.
Top Challenges for Rapid Growth in Distribution Businesses
Distribution firms need to stay in control. From managing expectations to handling headcount to orchestrating the inflow and outflow of your products, doing all this at scale puts strain on your organization. Here are just some of the challenges you may face.
Getting Products into Your Facilities
Bringing products into your facilities is challenging. It’s hard enough when you’re working domestically or even locally. Doing so globally is another beast entirely. Now, multiply your workload by 10 or 100. When your product goes viral, that’s what happens. Everything from getting through customs to unloading shipping containers
For global distributors carrying dozens, hundreds, or thousands of SKUs, knowing how to unload a shipping container requires you to know what’s expected from you. Everything from ordering to receiving needs to be under control.
Overcoming Labor Challenges and Manual Processes
Technology has advanced. Whether you look back a year, a decade, or a century, solving today’s problems with yesterday’s technology presents a variety of challenges. A century ago, everything happened on paper and calculators were barely in use. Three decades ago, ERP solutions were limited to massive companies and small businesses relied on spreadsheets.
Sadly, many companies still rely on spreadsheets or underpowered software to do the job. Imagine for a second that you walk in tomorrow and have ten times the workload. That’s what happens when you face rapid growth. Can you keep up? Can your systems keep up? Probably not.
How much strain would it place on you to have a client who needs orders routed to 40 distribution centers? Now, how much strain would it place if the order happened on the same day and they expected a response within a couple hours? Trying to process everything with underpowered technology would be an all-hands-on-deck venture.
Payment Pains
Especially for the global distribution firm, money needs to flow. Growth puts a hamper on this. Not only do you have to process payments from a customer, you have to then pay your suppliers—in whatever currency they expect. If you’re manually entering orders, processing payments, and paying invoices, you’re bound to run into inaccuracies.
How One Rapidly Growing Distribution Firm Took on the Challenge
A company that started as a part-time venture less than a decade ago, Global Beauty Care faced many of the challenges listed above. Delivering a diverse selection of high-quality products for a wide range of customers, they ended up with one of the best challenges a company can have—finding themselves on the store shelves at 60,000 store locations.
A global business, getting from shipping container to facility to dozens of customer warehouses made for a lot of headaches—doing so with a mishmash of spreadsheets and decades-old financial management was even worse.
“We operated on a standalone financial system on our network that was built many years ago and not for our industry,” says Eric Mizrahi, Director of Operations & IT. “It had a very limited screen – you could only use one third of a screen at a time.”
Employees couldn’t cut and paste information, couldn’t export to Excel easily, and had problems with data sets larger than 30,000 records. “It was a non-smart system, not linked to the Internet. It couldn’t connect to add-on applications,” he adds.
To address this, the company turned to Acumatica and MIBAR for help. As a leading reseller and implementation partner, MIBAR specializes in delivering for the product-based business. With a history in delivering for global distribution firms in the past, MIBAR was able to help this mid-market distribution import business make the move to Acumatica.
Not only was the company able to free themselves from the challenges of using disparate, custom-coded financial to connect their operations, they simplified the payment process, gained control over shipping, and optimized case pack management and visibility. Learn more about their path to new ERP here.
Acumatica Distribution Management From MIBAR
As you seek to improve customer relationships, reduce order times, and manage costs, Acumatica Wholesale Distribution ERP software is there to help. Providing user-friendly, robust, and flexible inventory management, order management, and more, this distribution ERP is ready to fit into your unique processes and business model. Register for your Acumatica demo today.
Additional Distribution Resources
