Our ProductsERP Considerations for Importers
There are many considerations when evaluating an ERP solution for companies that import product, including multiple warehouses, tracking the product from factory to available to sell, multi-currency, and bar coding. These and many other factors should be considered during the evaluation. Ask your systems integrator the tough questions – both you and your ERP partner will sleep better knowing that a wise decision was made with respect to importing product.
Businesses today are no longer relying on domestic production of goods. Many United States owned companies and foreign-owned companies are increasingly purchasing their product from other countries, securing a U.S. branch, and selling and distributing locally, regionally, or nationally. This article does not attempt to address why this is happening; moreover, it is meant to address the specific concerns that a business buying imports has when choosing an ERP system.
First, importers need an ERP solution with multi-warehouse capabilities. They may own product in the overseas warehouse, or they may use it as a consignment warehouse. They might also need a separate warehouse when the product hits the water and another one when it lands at the dock. It is important to realize that often the factory tells the local branch which P/O has what product shipping, and a container (see below) can contain partial shipments from multiple P/Os. Thus, it is critical to manage the product as it comes from the factory to the water to the dock. It is essential because sales or customer service needs to tell the end users (the buyers) when their product is arriving. If you know that the product is “on the water”, then normally, it is four to six weeks from being available.
Many domestic companies also require the ability to see what is on the factory floor. To have the factory’s quantities integrated with the domestic branch’s warehouse is sometimes unrealistic, unless each company is on the same system. Many times the factory also owns the domestic business, which is more feasible of seeing what is out there. Many clients write their own custom intranet program to allow visibility; others allow remote logins to each system, and yet others create an import/export routine.
Containers of goods present a unique challenge to ERP. The problem is that the domestic business places a purchase order to the factory or the foreign business. The overseas company may have multiple P/Os from the U.S. customer and ships these multiple P/Os on one or more container, usually via fax or email submitting a manifest of product to the client. When the product is received into the ERP system, many ERP systems do not receive by container – they receive by purchase order. The solution – container receiving – is becoming much more common, and with-in 5-10 years, quality ERP systems will have this feature built in.
Multi-currency is often an issue. Many companies simply demand that the sale take place in U.S. dollars. However, for those companies that cannot require this, it is important to have an ERP system with multi-currency functionality. It does present its own challenges due to exchange rates and the extra user training that has to be intiated to make sure everyone understands common terms (base currency, home currency, etc.).
Importers should have a strong bar coding system that integrates with their ERP software. The bar code solution should allow for receiving product, shipping product, doing physical counts, transfers, and issues. The bar code solution should also be able to read an alternat bar code, and convert the symbols into the client’s inventory SKU.
Customer service and sales are critical factors in the supply-chain management of a business that imports its product. Many times, the order entry team is relying on the Quantity On Hand and Quantity Available numbers when communicating to customers. A complete solution would have a Customer To Promise (CTP) date based on the expected receipt of the product. This could mean at the dock or at the inventory warehouse. Regardless, customer service or sales needs to have a way that they trust the inventory counts to be accurate, as their livelihood is dependent on honest communication to the customers.
There are many concerns when evaluating an ERP solution for companies that import product, including multiple warehouses, tracking the product from factory to available to sell, multi-currency, and bar coding. These and many other factors should be considered during the evaluation. Ask your systems integrator the tough questions – both you and your ERP partner will sleep better knowing that a wise decision was made with respect to importing product.
