Unifying Order & Warehouse Operations for a Multi-Location Distributor

Overview

About the Client

The client we are working with is a local distribution firm that manages a large, multi-SKU product line with four warehouses. They supply a variety of retailers, as well as e-commerce platforms and institutional buyers. They have a variety of billing methods, including consignment, monthly invoicing, or spot orders. Despite the revenue growth, however, their back-end operations were experiencing increased stress, and the team was putting in excessive hours working on reconciliation of orders as well as billing corrections and inventory inquiries, while customer complaints about delays in delivery and invoice issues were growing.

Challenges Faced

• The order management system was split between phone, email, and a basic order entry tool, but there was no central overview of all open orders across warehouses.
• The stock levels of each warehouse were recorded using separate spreadsheets, making it impossible to fulfill orders from the nearest stock place.
• Invoicing was manually completed at the end of each month, resulting in an average cycle of 18 days from invoice to cash and a regular dispute because of pricing mistakes.
• There was no forecasting of demand. capabilities reorders were made based on intuition, which led to shortages of items that move fast and dead stock of slow-moving ones.
• The management team was not able to have real-time information about warehouse throughput, dispatches pending, and outstanding receivables.

Recommendations by Blueflame Labs

Blueflame Labs conducted a process discovery workshop across all four locations, mapping order-to-cash, procure-to-stock, and warehouse-to-dispatch workflows in detail. Our analysis revealed that the company required an integrated ERP platform that integrates order management, warehouse management, and financial controls in one environment. We suggested a gradual introduction that began with inventory management and order management before moving on to the management of warehouses and automated billing in order to reduce disruptions to day-to-day fulfillment while transferring. We also recommended against integrations with point solutions and suggested using native ERP modules to prevent the risk of data synchronisation in the future.

Solution Around ERP

We set up an ERP system with integrated warehouse management, inventory tracking across multiple locations, automated ordering logic, and the automation of billing processes. A custom set of allocation guidelines was created to direct orders to the closest warehouse with stock that was available and reduce the time to dispatch. EDI connectors were designed for the best five partners in retail to automate order intake and forward delivery notifications. The billing system was created to generate invoices on autopilot after goods are dispatched, thereby making month-end reconciliation unnecessary. Dashboards were designed for warehouse managers as well as finance staff to keep track of throughput, pending orders, and outstanding receivables in real-time.

Implementation & Integration

Phase one was about migrating master data for the customer and product from four different systems, and the creation of a single catalog with unifying pricing rules, a three-week cleansing exercise. Phase two launched with inventory management and order management across all warehouses simultaneously, assisted by Blueflame Labs consultants stationed at each warehouse for a period of 2 weeks. Phase three brought on the billing automation as well as EDI integrations. The full user training was given to over 80 warehouse dispatch, finance, and warehouse personnel. An on-site support team was staffed via Blueflame Labs for 10 weeks after go-live, taking care of more than 200 support tickets over the period of stabilisation.

Result

• Reduced the cycle from invoice-to-cash from 18 to just 6 days in the first quarter following launch, greatly increasing cash flow.
• Improved accuracy of order fulfillment up to 99.2 percent, which has reduced the need for the cost of re-shipments and deductions from customers.
• The number of billing disputes has been reduced by 50% due to automated invoicing and the elimination of pricing errors made by hand.
• The team successfully unified the four warehouses onto one platform within the timeframe of the project.
• Management was provided with real-time insight into the inventory, order pipelines, and financial results, thereby improving the replenishment process and making pricing decisions.