How a Distribution ERP Helps You Protect and Hold Inventory to Ensure Customer Satisfaction

We can say one thing for sure about the consumer goods industry: change is the only constant.

The COVID-19 pandemic, of course, was a massive impetus for change: less brick-and-mortar, minimal brand loyalty and lots of online shopping—to name a few. 

But even before that, the global consumer goods landscape was shifting.

Ecommerce had a larger presence and proved to be a mainstay. Businesses were adjusting to accommodate massive single-parcel drop shipping orders, the regulatory environment was changing, and product innovation was becoming a staple of successful business practices. Along those same lines, customers are more mobile. They’re empowered by technology and real-time connection, so they expect the same from their consumer goods companies.

And things are still changing. And they’ll continue to shift. Dealing with all of these moving parts is challenging. It would help if you had the right team and the right tools to be successful for the changes of today and those that are sure to happen in the future.

An enterprise resource planning (ERP) solution creates a clear framework for navigating all these changes, particularly reservations, restrictions and forecast holds.

Reservations

When we say reservations, we mean earmarking and protecting inventory for big ecommerce retailers. This is standard practice within the industry, especially during holiday seasons. The ecommerce retailer hasn’t technically placed orders against the inventory, but the inventory has been promised to be made available to them (and their customers). The right ERP will allow you to track and include those commitments you made to larger retailers.

Let’s say you’ve created a reservation order with Wayfair. They’ve committed to buying a massive order of lawn chairs. Your product is currently being produced and manufactured, and sent over to your warehouse—it’s working its way through the supply chain. And when the orders come through, you have to have the way to start making edits and adjustments.

Our distribution ERP has that kind of functionality. To communicate that if the Wayfair order doesn’t actually come in, you’re going to release the stock by a specific date. Or, conversely, when those orders do come in, you want a system that’s going to deplete inventory from that reserved quantity automatically. It alleviates the need to create “dummy orders” and manually enter data to make sure you’re tracking all the product and committing stock as you should.

Reservations make the whole process more efficient and ensure that you’re not accidentally selling away promised stock. These tools are helpful with big ecommerce retailers and independent retailers alike. It’s your company reps that are communicating those commitments and promises, and with our ERP, you can manage that reservation and its corresponding details in the system.

Restrictions

Restrictions within an ERP, as the name suggests, restrict the sale of a product—to either an individual customer, all customers minus one, or a specific geographic region.

Let’s say, for example, as a consumer goods importer and distributor, you create exclusive products for Walmart. They’re branded for Walmart. And then, at the same time, you’re producing private-labeled products for Target, Costco and Sam’s Club. Because of this, you can’t ship the product that’s branded and marketed for Walmart to Target or Costco.

So if you have private label products—packaging that is specific to a retailer, like in the example above—you want to make sure no one sells that product to an incorrect customer. That you don’t pull it to fulfill other orders.

Another example: if you’re selling product to California, they have stringent environmental and label regulations, so you want to make sure you comply with those. So you may have to package the same product two different ways, and you want the right product going to the right place. Otherwise, you’ll incur fees and fines. Because California has all the warnings and labels on their packaging, that will cost more money, so if the product isn’t all going to California, you may order 1,000 without all that extra labeling and put a bit more money back in your pocket.

As far as restrictions, if the order came in and is for a customer in California, they may not get the standard label, but they can get the California-packaged label. In our distribution ERP, you can make restrictions based on these requirements and rules. If your ERP doesn’t have these capabilities—it all comes down to hoping the customer orders the right product and hoping your employee enters the order correctly. If not, you just shipped a non-California packaged item to a California retailer, and you’re likely going to be slapped with a hefty fine.

Forecast Holds

Forecast holds within our ERP offer a way of protecting inventory. It’s similar to reservations, but there are some key differences. This ties into demand planning, projecting and forecasting. Let’s say you’re a consumer goods importer, and those goods are being produced overseas. You typically have long lead times—60, 90, 120 days. But your customers want to place orders today to meet those demands of their consumers.

That means you need to enter in purchase orders and lock in that stock for those customers. You’re protecting your inventory, and you have forecasting tools available in our distribution ERP to help you determine how much product should be allocated to each customer based on historical purchasing data. And that’s what your planning and buying product to—those demand forecasts already in your system.

As orders come in, say, from Walmart. If the forecast from Walmart was for 5,000 units of product in June, the system will monitor the demand, the actual orders that come in from Walmart in June. Should you get to the point where Walmart orders its 5,001 unit in June, the system can pump the breaks automatically to have a discussion to ensure you do have enough stock to fulfill all the orders you’ve already reserved for other customers.

It’s all about inventory—and having the tools that support you in sending the right inventory to the right customer at the right time. And Aptean Distribution ERP can help.

Ready to take the next step to better manage your reservations, restrictions and forecast holds? Find out how, now.