Distributors Leveraging Technology to Increase Margins


I recently attended Perspectives 2010, Epicor’s annual global user conference.  This was my first experience at Perspectives, and while my colleagues briefed me well on what to expect during the event, I was quite amazed and impressed by our customers.  The vast majority of discussions that I had with users were about value creation as opposed to mere functionality.  There were those customers who were eager to share how they’ve used Epicor to improve their businesses, but there were even more who were willing to listen.

For example, one customer explained how he used Epicor Business Process Management (BPM) and Service Connect tools to integrate and reduce the number of steps in processing information from a third-party manufacturing application—essentially reducing the required number of barcode scans from five, or more, to just one.  As a result, this has saved his company and co-workers from performing thousands of non-value added steps each year.

At one point a question came up (as it always does), “Yeah, but how much did that cost you to do?” There were several nodding heads wondering the same thing, and before a chorus of “that must have been expensive” the response came: “You know, I’d have to think about it—I don’t really know.  I only know what it would have cost us if we hadn’t done it.”

McDonald’s founder, Ray Kroc, once said, “If you’re green you’re growing and if you’re ripe you’re rotting.”   Today there are many dimensions to this quote—personal, organizational, environmental.  I mention it in the organizational context because technology has become a great enabler of growth.  Also, because I have walked some miles in our customers’ shoes, having once worked for a distribution company where I was twice involved with major software selections and implementations that were necessary to grow and sustain industry leadership.  Suffice it to say, there is much to consider—too much.

Nevertheless, consideration of technology is now an imperative and a competency.  According to an Aberdeen study, Spotlight on the Distribution Sector: Market Challenges and Responses in 2010, most distributors are focused on growing profit margins despite crushing market forces.  To meet the challenge, these distributors are leveraging technology in strategic and innovative ways to manage costs and make more intelligent supply chain decisions.  What’s more is that distributors are focused on value creation, not functionality just for functionality’s sake—who cares what it does if you don’t use it, or know how to use it, or if it doesn’t align with overall business strategy. 

Not surprisingly, interest in Epicor among distributors has been fantastic, recently.  There are at least two reasons for this.  The first is because of Epicor’s technology stack, its ease of use, and extensive tool kit. Epicor offers a nimble solution in times that demand business agility.  Secondly, distributors are widely embracing Lean principles and Epicor is chock full of solutions to identify and trim waste and ensure product quality.  Grow or rot?  While the decision is simple it’s certainly far from easy in practice. However, the vast majority of the customers I spoke with during our user conference had interesting plans for growth and a creative determination to execute that was truly inspiring.

Posted by Mike Tatara, Manager, Product Marketing, Epicor 


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