(336) 315-3935

What is the True Cost of Outdated Distribution Software?

Written by Laura Schomaker

November 17, 2022

Upgrading to new software, such as an ERP solution, can sometimes seem like an added expense you don’t need to budget for right now. After all, your existing distribution software works well enough, right? What you may not realize is that the cost of outdated distribution software can really add up. Holding on to legacy solutions can end up costing you more overall than upgrading to a new distribution ERP solution. Let’s see how.

You’re racking up costs related to IT.

With older, legacy systems, IT typically books a high volume of work hours, for one. Licensing fees for outdated distribution software can also pile up, too. When you upgrade to distribution ERP, you can save on IT staff and licensing. In fact, one pharma distribution company that upgraded to ERP saved $120,000 each year on these IT costs.

Order processing takes hours instead of minutes.

With outdated distribution software, your processing times can lag. This not only costs you return customers but also increases the burden on your customer service department. By transitioning to a new, distribution industry focused ERP solution, you can slash order processing time, keeping customers happy and keeping them coming back.

You’re over-staffing during your busy season.

When things are unorganized and unproductive, you may pile on staff to make up the difference. This is one secret cost of outdated distribution software. Inefficient workflows make you think you’re understaffed when you’re not. With a new ERP solution in place, you might find yourself able to get through the busy seasons with your regular staff or with significantly fewer temp hires. One rug distribution company that upgraded to ERP avoided hiring 6 new order entry employees once the busy season came around, saving them some significant dollars.

You’re spending a lot on replenishment.

Replenishment spending is necessary, but it doesn’t need to be sloppy. When inventory management is inefficient, it’s easy for things to get out of hand and for replenishment spending to get out of control. By implementing the right ERP solution at your distribution company, you can reduce replenishment spending by as much as 15 percent.

Those are just a few of the startling costs you can rack up when you stick with an old distribution solution. Want to learn more about how you can save with a modern ERP? Let’s talk!

You May Also Like…

Strategies for Overcoming Labor Shortages: How Technology Can Help

Strategies for Overcoming Labor Shortages: How Technology Can Help

The US economy is facing its greatest labor shortage in many decades. With over 11 million jobs needing to be filled, companies are experiencing serious impediments to productivity, which cuts into their profit margins. What can companies do to combat these labor shortcomings? We’ve put together some of the best strategies for overcoming labor shortages.

read more
Top 3 Signs You’re Ready for a Distribution ERP Upgrade

Top 3 Signs You’re Ready for a Distribution ERP Upgrade

With features tailored for distribution environments, ERP can give these businesses the answers they need. Even though ERP is known to work very well in this sector, you naturally might stick with your existing solution and not realize it’s time to make a change. What are some signs you might be ready for a distribution ERP upgrade?

read more