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If you’re producing and selling aftermarket automotive parts and accessories, you’re surely feeling the squeeze. Due to many factors, supply chains have become increasingly problematic, making it harder to get needed products in a timely fashion. As competition increases, margins are becoming ever more narrow. Customers only add to the pressure, demanding the highest level of stock availability and customer service. To compete in today’s landscape, spreadsheets and entry-level accounting systems no longer provide the needed accuracy and control. You need a full-fledged Automotive Aftermarket ERP system, with control and visibility that drives increased revenue, profitability, optimized purchasing, enhanced cash flow, and more.
However, the software itself isn’t a magic wand. Analyzing your operations and identifying business processes that can be optimized – even to a small degree – can give you the edge over your competitors and empower your team to deliver next-level service to your clients.
Identifying Common Inefficiencies
- While a closer, individual analysis is crucial to optimize your business, certain areas are common candidates for improvement in the automotive aftermarket industry:
- Broken Business Processes. These are the processes that “should work”, but in fact, don’t.
- Workaround solutions. Is there something about your current software that impedes productivity? Has your staff devised a way around it? Find that roadblock for later removal.
- Data silos. Make a list of all current software solutions in use that are critical to business operations. Create a plan for consolidating that data and functionality from disparate applications into a more comprehensive ERP solution.
Planning for Optimization and Improvement
Armed with a detailed list of the pain points of your current software, you can now devise a plan for optimization and growth. Below are key areas to examine:
- Find the bottlenecks in your purchasing process. Identify ways to reduce manual data entry, automate the approvals cycle, and other inefficiencies. Get feedback from your team.
- How are you currently storing, picking, packing, and shipping your products? What solutions (hardware and software) could automate or otherwise improve the process?
- Are you able to accurately forecast demand? Are there ways to optimize production scheduling to reduce waste, adapt to changing market trends, and increase profits?
- Order Cycle. The above areas of improvement will immediately shorten the order cycle, which will be a great win for your company. But don’t stop there! Define an “ideal” order cycle duration, and see what you need to achieve it.
- Supply Chain. While you can’t control the delivery times of your suppliers, you can build their lead times (and their delays) into your schedule. That way, you can give your customers accurate fulfillment dates, confident that you’ll deliver on time and consistently.
- Eliminate inconsistent invoicing schedules and manual processes. Consistent, accurate invoices delivered rapidly to your customers are possible with automation features provided in a good ERP solution. This in turn will improve your cash flow, getting you paid more quickly.
- How long does it take you to pull reports now? With hours, days, or even weeks needed to compile data for decision making, an ERP solution delivers instant access to industry-specific Key Performance Indicators (KPIs) via dashboards and comprehensive reports. This enhances visibility and transparency throughout the organization and allows you to adapt quickly to changing conditions with real-time data.
Finally, plan for the future. SEMA’s State of the Industry Report from Fall 2021 shows current growth statistics – Distributors are up 10%. What would it mean if you could grow 10% or more without adding headcount?
5 Important Factors to Help You Choose the Best Automotive Aftermarket System
Every company is unique; thus, the ERP solution that is your best fit must be chosen carefully. You need the best solution available within your budget. Whether you’re making the leap to ERP for the first time, or you’re looking to replace a legacy solution, these factors can guide you to a good decision.
- Industry Experience. There are countless ERP resellers out there. But how many of them know your industry? Distribution software is not a one-size-fits-all market. Is the solution that’s being proposed widely used in the automotive aftermarket industry? Has the reseller helped other companies like yours? Take a look at their case studies and success stories and interview the vendor representatives personally to gauge how much they know.
- Total Cost of Ownership. Purchasing software is more complex than it would seem. It is important to prepare a spending plan ahead of time and work with potential vendors to find a solution that fits within your requirements and budget. Don’t be fooled by lower initial costs; you are interested in determining the Total Cost of Ownership (TCO) to see how it will affect you over the long term. Include these factors in your TCO calculations:
- Software licensing
- Implementation, including customizations and add-ons
- Go-Live support
- Ongoing support and maintenance
- Future upgrades
- Miscellaneous fees
Many solutions today (primarily in the cloud) can bundle most of the cost into Software as a Service (SaaS). If a potential candidate fits in this category, be sure to examine the Service Level Agreement (SLA) for hidden costs, such as system enhancements or upgrades.
- A Technology Strategy. Most modern ERP solutions are cloud-based, with a monthly, all-inclusive subscription that eliminates the need for hardware and internal IT support. However, you need expert advice on how the new ERP solution will integrate with your current operations – and that comes from your IT staff. Be sure a key member is involved in the selection process, because he or she can spot problem areas early in the process, including connectivity issues and integration with legacy systems.
- A Vetted Vendor. Do your research on your potential technology partners. Where will they be in 5 to 10 years? Are they stable? Are they growing? Of course, many vendors are later acquired and merged into larger organizations, which can affect their ability to serve your needs. Then decide what is more important for your company: A large ERP vendor with an all-encompassing, complex, and expensive solution, or perhaps a specialized, industry-specific solution that meets more of your requirements, but doesn’t have the extensive functionality of the broader offering.
- Real Customer Feedback. Ask your vendor to provide you with client references so you can see how they have helped other companies like yours. Narrow the list to clients running their new solution for at least a year, who are in the same industry, are about the same size as your company, and with similar requirements. Speak with those in their respective companies who were involved in the ERP project to get their insight, opinions, and feedback.
Sound like a lot of work? Indeed it is, but including these factors in your investigation will greatly increase your chances of a truly successful ERP implementation – one that drives your company to new heights!
PC Bennett offers you a proven solution designed to meet and exceed the needs of automotive aftermarket distributors. Acumatica Cloud ERP Distribution Edition – an award-winning system at the forefront of the Cloud ERP market – paired with AutoFitmentPlus, is the perfect combination to help you manage inventory, increase sales, and streamline your order fulfillment process. Powerful forecasting tools in Acumatica draw on your sales history to predict future demand, allowing you to optimize your inventory levels, maintain high cash flow, while also reducing “stock outs”.
Additionally, AutoFitmentPlus (powered by Acumatica) from PC Bennett Solutions simplifies the sales order entry process, displaying only the parts that fit the customer’s vehicle. And with Acumatica’s other powerful modules, you’ll have all the tools you need to manage every aspect of your business.
Contact PC Bennett Solutions today and see how Acumatica has helped other businesses just like yours deploy the best automotive aftermarket ERP solution.
By Patricia Bennett, PC Bennett Solutions, www.pcbennett.com
The post 5 Tips for Comparing the Best Automotive Aftermarket ERP appeared first on ERP Cloud Blog.