The Real Cost Of Managing Operations In Excel For Distributors

Even in this day and age, it is not uncommon to find distributors that still rely on Excel to manage their inventory. In fact, they even use it to track orders, monitor their purchases, and generate reports. While this might be a familiar and inexpensive way to get the job done, it’s not without its drawbacks.

Optimizing inventory levels becomes next to impossible with Excel as businesses grow. Expanding catalogs, multiplying warehouses, increased customer orders, and larger teams simply cannot be managed with the help of spreadsheets.

So what is a more viable option then? Why, distribution ERP, of course.

Allow ERPion, a truly modular ERP system that fits into the budgets and goals of Ontario businesses, to explain how distribution ERP can fix the issues Excel causes.

Why Is Managing Distribution Operations With Spreadsheets A Problem?

There is no denying that spreadsheets are a great way to compile data. But they simply do not have what it takes to run complex business operational processes. They are not designed to handle them.

So if the teams of a distribution business use separate Excel files to manage data, information can quickly become fragmented. That means critical data related to inventory, purchasing, sales, and warehouse can lose its accuracy – especially when each team works with a different version of the same data. The result? Needless chaos and confusion.

Hence, as businesses expand, spreadsheet management turns into a time-consuming hassle that impacts data accuracy and decision-making across all departments, processes, and functions.

Other issues that crop up include:

• Inventory errors: Inventory is dynamic, and spreadsheets are static on their own, so it’s obvious the two do not align. Manual updates made on spreadsheets can lead to incorrect stock levels, duplicate entries, missing updates, overselling, understocking, and delayed purchasing decisions. None of these are fruitful for a business and can often lead to frustrated customers. 
   
• Slow processes: Manual work is time-consuming. Period. Every second an employee spends on manually copying information from one spreadsheet to the next, they are essentially wasting company resources that can be better spent on automating the process of data collection and updating. From tracking customer orders to reconciling warehouse data – everything can be automated with distribution ERP software. 
   
• Limited visibility: Spreadsheets cannot offer real-time information. They offer data that is already outdated by the time it reaches the manager’s desk, turning decision-making into a rather difficult process. 
   
• Poor collaboration: Cross-departmental collaboration keeps a distribution business running smoothly. But fragmented data leads to fragmented departments. When sales, purchasing, warehouse, and finance teams make their own spreadsheets to track the same data, collaboration suffers. The only way out is implementing a centralized ERP system that consolidates key information to establish a single source of truth.
   
• No scope for scalability: Growth can bring complexity. But can spreadsheets handle that? The truth is they were not built to accommodate new products, additional warehouses, high order volumes or expanding customer bases. That is to say they are not scalable by design. Creating more spreadsheets will not solve anything. It will simply lead to more manual workarounds and wasted hours.

Spreadsheets are essentially free, and while that might seem like a viable way to save costs initially, they can quickly turn into a company’s biggest liability and expense, thanks to the many issues they introduce.

How Distribution ERP Software Fixes Spreadsheet Woes

Distribution ERP software does not take a run-of-the-mill approach to data collection. Instead, it is tailored to match the exact processes and functions of a distribution company to ensure perfect alignment with its workflows. As a result, the data generated is completely accurate and consistent across departments.

But that’s not the only benefit of having a customizable ERP for distribution. There are more, such as:

• Automation of repetitive tasks 
• Centralized data hub 
• Real-time visibility 
• Better decision-making 
• Optimized inventory levels 
• Accurate reporting and forecasting 
• Zero data fragmentation and improved collaboration

It is an operational revolution in its own right – one with a consistently increasing ROI due to its scalable and flexible nature.

Conclusion

While the role of spreadsheets in the foundational phase of a distribution business is undeniable, it must end there. Otherwise, it will only create data conflict and chaos, which can lead to a whole gamut of operational issues that are best avoided.

Tools such as ERPion’s custom-made distribution ERP software for Ontario businesses centralize operational data, automate routine processes, and provide real-time visibility across the entire company. Contact us to learn how our software is much more than just an Excel upgrade.

FAQs

At what point should a distribution company switch from Excel to distribution ERP?

If spreadsheets have turned into a productivity-hampering, error-inducing liability, it is time for companies to switch to distribution ERP.

Can historical Excel data be transferred to a distribution ERP?

Absolutely. Modern modular ERP systems such as ERPion support spreadsheet-based data migrations, helping companies keep historical data alongside current facts and figures.

Will Excel-using employees need extra training to learn how distribution ERP works?

Yes, they will require some amount of training and orientation. However, distribution ERP systems such as ERPion are fairly user-friendly, intuitive, and quite easy to pick up.