Partner Spotlight: Talking ERP Strategies and Innovation with Blue Link ERP
- Featured Partner Spotlight: Interview with Mark Canes, President and CEO of Blue Link ERP
Every wholesale distribution business knows the costs associated with improperly managing inventory. Distribution businesses live and die by their ability to efficiently buy and sell products while keeping inventory lean. Most wholesale distribution businesses turn to fully integrated ERP software to lessen the burden on their buyers and procurement teams when it comes to planning and managing inventory.
ERP software is designed to manage all aspects of a company’s operations including:
– Inventory management
– Accounting and financial management
– Order entry and processing
– Contact management and CRM
– Warehouse management
– eCommerce integration and more
Even with a robust ERP system in place, depending on the size and complexity of your business, sometimes managing inventory is not enough to maintain control of multifaceted supply chain networks. This is where most innovative distributors today are turning to advanced inventory optimization solutions to support additional forecasting and replenishment capabilities to their day-to-day ERP operations.
These more sophisticated systems act as an add-on solution for more in-depth analysis of a company’s inventory regardless of how wide spread or complex. They aid in demand forecasting, seasonality analysis to automatically find and assign a seasonal profile to each item/location record, multi-location planning, promotion management and more.
With the ERP landscape always evolving, EazyStock spoke with Mark Canes, President and CEO of Blue Link ERP, a wholesale distribution accounting and inventory ERP software for small and mid-sized businesses, to learn more about what Blue Link customers are doing to innovate in the wholesale distribution industry today and how they are taking their inventory management practices to new heights.
Daniel Dowling: “Mark, tell the readers a little about yourself. Who are you and where are you from?”
Mark Canes: “I actually come from an accounting background and am a CPA, CA. I was a partner in a public accounting firm for a while. After spending 11 years in accounting, I moved on to software development. It was during my time as an accountant that I began to specialize in owner-managed product driven businesses. Working with business owners in this capacity led me to working as a software developer and consultant in the wholesale distribution industry and ultimately led to the creation of Blue Link.”
Daniel Dowling: “Give us a little background on how Blue Link came to be and how you have seen the ERP landscape change over the years.”
Mark Canes: “Blue Link started out as a software service and consulting business focused mostly on assisting organizations in the early 90s to move from manual to computer-driven administrative processes. After a few years, we noticed gaps in the options available to small and medium-sized wholesalers and distributors in terms of inventory management and accounting software and the company strove to fill that gap. After a couple of years, this new initiative became the main (and then sole) line of business.
ERP software in the mid-market used to be a very “horizontal industry” and to some degree it still is, but nowadays you see more and more businesses develop software for a specific industry, resulting in them becoming experts in that industry. The need for more industry-specific functionality is obvious in some industries where workflows are heavily regulated (think the pharmaceutical distribution industry), but there are other more general industries that can still benefit from specialized functionality.”
Daniel Dowling: “What have you noticed is the main thing most wholesale distributors get wrong when it comes to managing their inventory? ”
Mark Canes: “Many wholesale and distribution companies underestimate the value (and cost) of their inventory and not just from a monetary perspective. As a wholesale distribution company your inventory is your bread and butter. Without it, you would not be in business, so understanding your inventory and how it moves through your business is very important. When most businesses talk about the value of inventory, they fail to see it from all angles. For example, it is important to understand the cost of getting inventory to your customers and then the cost if that inventory is returned.
Other considerations include the cost of finding inventory in your warehouse and efficiently picking product for each order, the cost of ordering the right amount of product at the right time so that you don’t have to deal with stock outs or dead stock, and the cost of making inventory available to your customers in the specific way they want to see it (think eCommerce for example). For the most part, the issue is not necessarily about getting the information you need but knowing what information is important and how to make sense of it.”
Daniel Dowling: “In your opinion, what is the biggest challenge facing wholesalers and distributors today with regards to inventory management?”
Mark Canes: “One challenge that we see businesses face again and again is determining which products to buy, how much to buy, and when to buy them. Purchasing correctly can significantly impact a company’s bottom line and keep customers returning. Another challenge is managing the fulfillment of eCommerce sales and achieving the online customer’s expectation of instant gratification. You have to know what product is in inventory at any given time to know what orders can be shipped, and if you don’t have product, when that product is expected to be available.”
Daniel Dowling: “How can they overcome those challenges as it relates to technology or their ERP system?”
Mark Canes: “It might seem like the obvious answer, but the best way to overcome the challenges with managing inventory is to invest in software that is designed specifically for that purpose. There are a lot of software vendors who market themselves towards inventory management, but it is important to find the right one for your business and to evaluate vendors on more than just cost.
There tends to be a big gap between introductory type inventory management tools and more sophisticated systems when it comes to actual functionality. It is important for businesses to look for industry specific features such as lot tracking, landed cost capabilities, and integration with eCommerce sites. Inventory management software should also provide flexible reporting tools and opportunities for automation such as the ability to email specific information from the system.”
Daniel Dowling: “In your experience, are there any innovative trends in the distribution industry you have noticed that other distributors should be aware of?”
Mark Canes: “Given how fast technology is changing it seems like there is something new in the industry almost every day. Businesses that can adapt quickly to these changes and opportunities will be the ones to see the most success. Some specific examples include the increasing prevalence of distribution businesses selling through online channels. eCommece as a sales channel was traditionally reserved for more consumer-facing businesses, but more and more distribution companies are starting to sell their product online through both B2B and B2C networks. This also includes an increase of businesses selling through Amazon and other similar marketplaces.
Vertical integration by way of drop shipping is another more innovative trend. This is where your supplier drop ships to your customer, and more commonly, you drop ship to your customer’s customer (think Costco, for example).
Other areas for innovation come from warehouse processes. Certain applications such as mobile device handheld picking are changing the way that warehouses operate. Not to mention that it provides new opportunities for smaller businesses as the hardware is much more affordable (for example, barcode scanning with an iPod touch).”
Daniel Dowling: “If you were to give one piece of advice to distributors today regarding inventory management, what would that advice be?”
Mark Canes: “My advice to distributors is to ensure that all systems that feed into or feed from each other are integrated properly and accurately. This also requires that all of your employees are properly and optimally trained in all aspects of their job, including the ERP system as it pertains to their job function.”
Featured Partner Spotlight:
A Chartered Accountant and CA-IT, Mark was a partner in a public accounting firm many years ago. After spending 11 years in the accounting profession, he has now gained over 20 years of experience in systems design, consulting, and business software development. Mark offers a unique blend of business, accounting, and programming knowledge and expertise; the ideal mix for a vendor of accounting software and ERP software.
Mark honed his wholesale/distribution industry skills during his years in public accounting, where he specialized in owner-managed product-driven businesses. From there it was a logical progression to become the architect of a wholesale distribution software solution.
There are few things that Mark enjoys more than helping business owners reap the benefits of improved business processes. After watching so many Blue Link customers grow their businesses significantly over the years, Mark remains hungry to add to the list of success stories.