Four Actions Every Distributor Should Take To Improve Inventory and Supply Chain Management

In the face of global, multi-channel markets and increasingly tough economic conditions, are traditional inventory management and supply chain practices becoming obsolete?

In this special Insight Report, Aberdeen identifies the key inventory and supply chain technology initiatives planned by distributors for 2008 and beyond. The report also details the strategic action distribution should take in response to rising logistics cost and lack of supply chain visibility.

Read this report to learn:

* Why inventory optimization, forecasting and replenishment are key to success in distribution
* Why you need end-to-end supply chain visibility now
* How your technology priorities compare to your competitors

Find out how you can transform inventory and supply chain management into a customer service differentiator, a market strategy differentiator, and a profit center.

Click here to read more

NetSuite Expands Lead in Vertical Suites by Leveraging Core Strength In Wholesale / Distribution to Tackle Demands of Light Manufacturing

NetSuite Inc. (NYSE: N), a leading vendor of on-demand, integrated business management software suites for the mid-market enterprise and divisions of large companies, today announced a new vertical suite for manufacturing companies. NetSuite for Manufacturers, which includes new functionality for Assembly, Work Order and Bill of Materials, takes aim at SAP's core market and seeks to exploit the prolonged delay of SAP's Business ByDesign product roll-out, providing mid-sized manufacturers with an integrated on-demand solution they can put to work today.

" NetSuite has been offering vertical suites for the wholesale / distribution industry for a while with a proven track record," said Bruce Richardson, Chief Research Officer, AMR Research. "Manufacturers have been longing for SaaS offerings to build better overall total cost-of-ownership. Until this release from NetSuite, there haven't been any broad SaaS product offerings that include financials, CRM, Ecommerce and manufacturing. The on-demand suite approach — pioneered by NetSuite — could prove to be a major market accelerator."

Today's new release leverages the core strength of the NetSuite Wholesale / Distribution Edition — launched in April 2006 — and is a natural progression of NetSuite's leading role in delivering Software-as-a-Service (SaaS) business suites designed to address the specific requirements of vertical industries. NetSuite's offering for manufacturing, initially aimed at the light manufacturing sector, is also the latest example of how NetSuite's SaaS-based business management technology has evolved to address more complex processes in industries long dominated by on-premise vendors such as SAP. The company's rapid move into manufacturing comes at a difficult time for SAP, as they have struggled to deliver their own on-demand offering, Business ByDesign, to address customer requirements in their core market. NetSuite for Manufacturers now gives SAP customers and others an option they can purchase and deploy without delay. For more information about NetSuite for Manufacturers, please visit www.netsuite.com/manufacturing.

Manufacturers Have Varying Challenges

Light manufacturing businesses typically overlap with wholesale / distribution and span a huge spectrum of categories from apparel to furniture to small electronics. Regardless of which category a light manufacturer is in, the challenge has always been the management of the bill of materials, assembly build and work order process for both production orders that add to general stock levels, as well as special orders built uniquely for one customer. Software traditionally used by mid-market light manufacturing companies encompasses dozens of on-premise silo applications — one for accounting, one for customer relationship management, one for work orders, one for inventory management, one for warehouse management. The list goes on. This fragmented approach can add large IT cost, introduce a high rate of errors throughout the business process, provides little visibility on available-to-promise inventory, and decrease business efficiency and accuracy.

Enterprise Power at Lower Total Cost-of-Ownership

NetSuite for Manufacturers provides companies with essential visibility into the key build processes that light manufacturers need to compete effectively in the market. Since NetSuite's delivery model is SaaS and all functionality and data is within one system, the total-cost-of-ownership is greatly reduced and light manufacturers gain the following benefits:

1. Greater insight into production processes — from inventory, to assembly, to demand based replenishment;
2. Real-time visibility throughout the entire organization — from sales to warehouse operations to invoicing;
3. Minimal integration hassle — NetSuite provides one system to manage the end-to-end business life-cycle;
4. Cost savings — reduced IT costs, reduced labor costs and reduced errors;
5. Reduced risk — instant information can help reduce time to respond to change;
6. Stay competitive in the ever competitive global economy for light manufacturers.

Powerful Functionality Key to Light Manufacturers

NetSuite adds a myriad of important functionality that is key to running a light manufacturing business. The new features unveiled today include:

• Assembly Management — building on NetSuite's core strength in inventory and warehouse management, assembly items have been extended specifically for light manufacturers which enable companies to more effectively manage component quantities and multi-level assemblies. Assemblies are closely tied with work orders and allow for multi-level assemblies to be built one level at a time, or all at once.
• Work Orders — new work order capabilities allow light manufacturers to readily manage the build process for production work orders to replenish standing inventory levels of finished goods or special order work orders built to exact specifications for a particular customer. For example, a furniture light manufacturer may have standard sized wood or glass-top dining tables they build on an on-going basis, but they may also offer custom-sized dining tables as a special order for individual customers.
• Bill of Materials (BOM) — any build process requires a bill of materials that outlines what components are required to successfully build the finished good. BOMs are tightly coupled with both assemblies and work orders and cover the components required for a single assembly plus all the components required by a particular work order. Assembly instructions can also be included in the printable BOM in PDF format.
• Demand-Based Inventory Replenishment — light manufacturers can now dynamically set re-order points and preferred stock-levels for both components of assemblies as well as finished goods based on a variety of factors including average lead time, historical or seasonal sales demand, and number of days from supply to stock. Work orders drive the demand for components as they are completed, thereby automating the replenishment of source materials and components.

"Today's launch of NetSuite for Manufacturers validates our strong commitment to vertical industries by delivering functionality designed to drive greater efficiencies and competitiveness," said Mini Peiris, NetSuite's VP of Product Marketing. "NetSuite enables manufacturers to automate complex business processes without the cost and complexity of cobbling together multiple business applications, and numerous spreadsheets. As a result, customers can stop wasting precious resources and start focusing on increasing customer service levels, cutting costs, and growing their businesses."

Pricing and Availability

NetSuite for Manufacturers is available now at $999 per month and $99 per user per month.

For more information about NetSuite Inc., please visit www.netsuite.com.

For Immediate Release: From the Editor and Associate Publisher of Industrial Distribution Magazine by Jack Keough

To learn more about researching, evaluating, analyzing and comparing software request the 2008 Industrial Distribution Supplement Guide released this month To order a complimentary copy visit http://www.software4distributors.com/supplementguide/default.aspx.

In a recent survey conducted by Industrial Distribution, distributors told us that one of their top concerns was soaring operational costs. It’s been a continuing problem that has been rising in importance in recent years.

One of the chief ways distributors can reduce those costs is through the use of technology. With the advent of expanded technological software, distributors can reduce errors in shipments; track and control inventory; and improve the manufacturer-distributor relationship as well as the customer-distributor relationship.

Technology can help in all those areas. But finding, evaluating and deciding on which software provides the best solution to solve your specific problem can be a daunting and time consuming task. That’s why Industrial Distribution is publishing this special section. This report, a supplement to the 18th edition of the Brown, Smith, Wallace Consulting Group’s Distribution Software Guide, is the number one source of detailed information for distribution-oriented companies beginning their selection process for new business software.

The guide is designed to provide independently researched information to make it easier for distributors to evaluate and select the right software for their specific needs.

Our survey clearly indicates that distributorships of all sizes will be looking for information on how technology can improve their internal and external operations. We hope this supplement will help you research, evaluate, compare and analyze the tools that are essential to your business operations.

About The Author: Jack Keough has been editor of Industrial Distribution for 21 years. Nine years ago he was also named associate publisher. Jack is considered a leading spokesman for the distribution industry. He has spoken at many industry conventions as well as at national sales meetings. He has also served as a panelist on radio and television and taught journalism at the college level. Prior to joining Industrial Distribution, Jack worked with community newspapers in Massachusetts for 15 years. He is a graduate of the University of Massachusetts.

About The Brown Smith Wallace Consulting Group: The Brown Smith Wallace Consulting Group has been serving the distribution community for more than 20 years through the publication of the Distribution Software Guide, speaking at industry programs, giving free telephone advice to distributors and providing fee-based consulting services to companies who need help selecting the best software packages for their business. For more information visit http://www.software4distributors.com/.

EDITORS NOTE: Permission to reprint is hereby given to all print, broadcast and electronic media. Permission is also granted for reasonable editing, including article title change and customizing for your audience/industry. Please send a copy of the published information to: Brown Smith Wallace Consulting Group, Sara Nelson, 10151 Corporate Square, Suite 100, St. Louis, MO 63132

For More Information Contact:
Sara Nelson
314.983.1393
snelson@bswllc.com

What’s going on?

It seems clear our economy is slowing down. Although 1^st quarter GNP grew at a slow rate, our newspapers are filled with stories on a troubled economy. The sub prime loan “crisis” has shaken the stock market. Oil prices have increased well beyond previous record levels. Food prices, metals prices, and other commodities have also seen dramatic rises. The Fed has acted aggressively to support our financial infrastructure and interest rates are very low indeed. All signs point to a recession, and we should be very worried about inflation at the same time - what is known as “stagflation”.

And yet:

Nearly every prospect and every customer we talk to is enjoying a very successful year, on top of great results last year. Industrial Distribution magazine reports that the Top 50 distributors ALL report record years in the making. The US manufacturing sector is thriving.

A big part of the answer to this paradox is those low interest rates mentioned above. They have resulted, over a period of several years, to make the US dollar “weaker” against other currencies. As a result, our various products have become much more competitive in the international markets. Our exports are truly booming and this is great for manufacturing, and therefore great for industrial distributors.

However:

That won’t make your job less difficult. Although interest rates are low, lenders have become very timid, given the impact of the sub prime loan problems on financial markets in general. This always impacts small businesses first, and hardest. No doubt you have experienced this if you’ve tried to increase a working capital line of credit lately, or borrowed to purchase a capital asset. Rates are low, but credit standards are very tight indeed.

In addition, given rising commodities prices and more costly imports (the other edge of a weak dollar sword), inflation is a very serious concern. This will impact your business in the form of rising purchasing prices, as manufacturers pass the costs of higher metals and other raw material prices along. This has been going on for several years, of course. The problem comes in maintaining your margins in a competitive market place. In addition, those of you that distribute for foreign manufacturers are seeing prices there (due to the weak dollar) rising much more quickly.

A well run distributor has the tools to deal with these issues and utilizing an ERP solution geared toward your industry is of primary importance. Other than that, there are really only three things to do.

First, aggressively manage your purchasing. Make sure you are buying only what you need, when you need it. Understand your demands at the item level, if necessary. Are you truly using the power of your software to support aggressive purchasing and inventory management? If you haven’t implemented any more than “min / max”, now is the time to dig in and get to a more sophisticated, aggressive and effective process. From the theory behind the process, to the practical applications of inventory management, your software should support Best Practice.

Second, just as you aggressively manage your inventory costs, you must manage your pricing. You need to work toward being able to actively manage each item’s price for each customer, what is labeled “strategic pricing”. You may have a big customer that aggressively negotiates and shops key items he buys from you. But other items he buys out of convenience. He’s not shopping those items, just adding them to the PO. Why give him the deep discount on those convenience items? He’s willing to pay more and probably won’t even notice if you give him your standard discount. There are several other pricing strategies like that one available - if you do the analysis and really understand what each customer is willing to pay. David Bowders of Strategic Pricing, Inc. can help you implement this very important pricing philosophy.

Finally, all small business owners know the importance of low overhead. Now is the time to aggressively manage your costs. If inflation takes hold, this will be critical to your ability to do business. Your software should have detailed reporting capabilities to manage your budget line by line and the tools to make your operation more efficient and streamlined.

If you’re a small business, joining an organization like COSE, the small business division of the Greater Cleveland Partnership – one of the nation’s largest metropolitan chambers of commerce, will help you lower costs by providing group purchasing programs that reduce the direct cost of doing business, and open doors to government agencies, business and community organizations, and economic development partners that can address your business concerns.

There is much to be optimistic about with the US economy. But we all have to manage our way through the ups and downs. Taking advantage of small business resource center of your local chamber of commerce and the tools offered by a well designed and industry specific software will help you lower costs and run your business more efficiently and profitably.

Tim Reynolds is the Chairman of COSE, the Council of Smaller Enterprises, and the President of Tribute, Inc., a firm specializing in distribution management software and support for industrial product distributors. He can be reached at treynolds@tribute.com.

Distributors Continue to Invest In Software Despite Economy

Despite the struggling economy, distributors continue to invest in software to better position their business for long-term success.

"While initially, the thought of investing in a new ERP solution in a down economy may seem daunting, if you think about it, there really is no better time," said Steve McLaughlin, senior vice president and general manager of Activant. "With things slow, distributors have time to review all of the options available and make a decision based on their current and future needs. In addition, they can take the time to train on the new system so their staff is ready to hit the ground running when the economy rebounds."

Many distributors are following McLaughlin's advice. In the month of June alone, nearly 40 distributors invested in Activant Prophet 21™, making it the leading enterprise software solution for distributors. As of today, more than 1,375 wholesale distributors have invested in the system.

"We were impressed by the way the Activant team has factored its experience in distribution into Prophet 21," said Kevin Reidl, executive vice president of Hodel-Natco Industries. The Cleveland , OH, distributor recently choose to move from SAP BusinessOne to Prophet 21. "The package has several very nice tools that were clearly developed from Activant’s experience in the distribution industry, and specifically in fastener distribution. The fact that the people at Activant live and breathe distribution shows in the product."

Distributors on legacy Activant solutions are also looking to move to Prophet 21. "Our overall goal, no matter what system we implemented, was to help us improve our customer experience." said Donna Benner, director of operations for The RG Group in York, PA. The company will move from Activant Disc to Prophet 21. "We wanted to get more data out of our solution more efficiently than we could with our current one. We chose Activant Prophet 21 because they do know our business – they’ve been in our industry for a long time – and the functionality of the system was what we had been looking for.”

"While there is no question that tough economic times put a strain on all businesses," concludes McLaughlin, "those distributors that view this slow period as an opportunity will emerge from this cycle stronger and in a better position to take advantage of what comes next."

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About Activant Solutions Inc.

Activant Solutions Inc. ("Activant") is a leading technology provider of business management solutions serving retail and wholesale distribution businesses in three primary vertical markets: hardlines and lumber; wholesale distribution; and the automotive parts aftermarket. Founded in 1972, Activant provides customers with tailored proprietary software, professional services, content, supply chain connectivity, and analytics. More than 30,000 customer locations use an Activant solution to manage their day-to-day operations. Activant has operations throughout the United States and Canada, Ireland, and the United Kingdom.

For more information, please visit http://distribution.activant.com

Congratulations to the Distribution Virtual Tech Fair Show Prize Winners

The Brown Smith Wallace Consulting Group would like to congratulate all of our show prize winners for attending the Distribution Virtual Tech Fair on April 30 and May 1, 2008. Tom Noonan from AP Wagner received an Apple ipod Touch, David Hays from Teche Electric received a Garmin Nuvi 350 GPS and Don Griffith from Denney Electric Supply received a Sony Playstation 3.

All three winners first heard about the Virtual Tech Fair through an email sent by the Consulting Group’s Virtual Tech Fair Guy. David Hays said, “I was intrigued by the thought of participating in an online virtual event.” Don Griffith explained, “It was easy to get my manager to agree for me to go to this event since there were no costs involved.” Tom Noonan said, “When I saw this event I was excited because it allowed me to get some specific information about several vendors and their products without having to leave my desk. I was hoping to gain a better understanding of the software offerings available and to gain a better insight into the industry.”

Not only did attendees enjoy learning about several vendors in one place but they were also able to continue their education on business. Tom Noonan stated, “The keynote presentations were especially interesting and gave me some helpful ideas on how to get the most out of people.”

Even if attendees did not have the time to attend the event the two days it was broadcast live, they still have the opportunity to view the booths and presentations when it is archived. David Hays explained, “I was unable to plan for the event and if I’d had more time I might have attended more presentations but I may yet attend an archived presentation.”

All of the attendees reported that they were looking forward to the next event like this. Don Griffith responded, “We are not currently looking to change our software provider but at some point we will probably have to and I want to know what is available. That is why attending another event like this is so important to me.” David Hays said, “I would attend this event again because I enjoyed navigating the rich websites and the live aspect made the event more interesting.” If you would like to learn more and to sign up to participate like these attendees did then visit www.virtualtechfair.com.

Great Opportunity For Learning

It is not very often that a whole organization can take advantage of trade show education. Normally, only the top executives get to go and listen. This time it is different. Every company can attend the education sessions at the Virtual Technology Show (www.virtualtechfair.com) for free, right from your own office. Here is the chance to spread the education around your whole organization.

On April 30 and May 1, the Brown Smith Wallace Consulting Group will host the third Distribution Virtual Tech Fair®. It grows each year and while the booths are worth seeing and the environment worth exploring, it is the education I want to focus on.

My suggestion is to review the programs that will be available and then schedule a time for you and your staff to listen to the speaker. You might bring in lunch and then have a discussion of what you heard. This is a wonderful opportunity that does not come along that often.

Let me highlight the two keynote speakers. All of the other programs are listed on the website, but these two are special.

First there is Richard Hadden who focuses on Employee Relations and Creating a Great Place to Work. He is the co-author of Contented Cows Give Better Milk: The Plain Truth About Employee Relations and Your Bottom Line. His live presentation will be on Wednesday, April 30, 2008 at 12:00 p.m. central. Followed by a Question and Answer session with the audience.

Richard will discuss why creating a great place to work is one of the best things a company can do for its bottom line. It's no accident that the organizations consistently identified as winners also happen to be some of the best places on earth to work. This occurs not as an afterthought, but as a vital, premeditated element of business strategy.

Especially for any company about to enter (or considering) a conversion, our experience is that contented employees have the easiest conversions. Whatever change is coming to your place of business, this is an important program.

Then we have Ed Oakley, Enlightened Leadership Solutions. He is extensively published and recognized for his work on quickly turning managers into more effective leaders. If you are planning on taking your company through a major change, then you and your staff need the skills and capabilities of leadership. Ed’s live Presentation and chat session will be on Thursday, May 1, 2008 at 12:00 p.m. central.

This presentation puts the challenges of a changing organizational environment into an enlightening perspective. It differentiates management and leadership. Ed clarifies why we must bridge the gap from management to leadership when the environment is changing rapidly. His presentation provides an empowering perspective of personal leadership and guides us through a definition of a model leader.

Remember to register in advance (www.virtualtechfair.com/registration-center/default.htm). You will receive a reminder the day of the show. Do not forget to check out the other education sessions. They are full of valuable information that will help you succeed.