SAP Distribution Blog

E-commerce is not new, and most distributors have some form of online presence.  Emerging evidence points to a significant shift, as customers scale back their shopping in stores and instead go online. In China, online shopping has increased 15 to 20 percentage points, and e-commerce in Italy has increased 81 percent compared with the last week of February.  US consumers have largely followed the same pattern.

The impact of COVID-19 on the domestic, regional and your local economy are still not clear, but we do know that e-commerce is one of the beneficiaries of a shift in purchasing behavior caused by sheltering in place.   Our customers have reported everything from complete shutdown when a warehouse person tested positive, to shift working to keep up with demand and social spacing.  We have also heard numerous reports of major customers shutting down and smaller e-commerce vendors increasing order size.

Will all this result in a new normal?  A better question may be can you afford not to react?  The statistics quoted above and other pertinent information can be found in a McKinsey Digital white paper provided for us through SAP.  'Building an e-commerce business: Lessons on moving fast' is a great source of common sense and insight from a 1000 brick and mortar European retail chain that was able to react quickly. 

With restrictions on travel, social distancing and mandatory quarantines, the current estimates are for double digit decline in GDP in Q2 2020.  After surviving Y2k, the dot com bomb, and the financial crisis we have learned many lessons about how to survive a recession.  Since doing nothing is not an option and tightening the belt will only help so much, consider some of the following tips to prepare for and emerge stronger if there truly is an impending recession. 

Coverings 2020, originally scheduled for April 20-23 in New Orleans, was cancelled due to the Corona-virus pandemic.  The decision to cancel Coverings 2020 "is a preemptive effort to minimize exposure to the COVID-19 virus and is in recognition of, and in full adherence to, federal, state and local requirements that are evolving due to these circumstances" according to their press release.

In my role as leader of a Cloud ERP provider, I have the luxury and pleasure of research and learning from industry analysts such as Gartner, SMB Group and IDC along with leading publishers like Microsoft, SAP, Sage and Citrix. I listen to these companies and temper them with the experience of hundreds of customers to form opinions on products and services that will improve the effectiveness and efficiency of our clients.

When you have items which are slow moving they are like keeping cash in a bank account with no interest and recurring fees.  If your inventory does not turn at a regular and frequent rate there are actions you can take to improve your cash flow and bottom line.

You optimize your inventory when you reduce your carrying value to the lowest amount necessary to meet your order fill rate objectives.  Classification is the segregation of inventory into categories.  One of the most common methods for classification is the ABC method where A are your most valuable items and C are your least valuable items.  The idea is to focus on your high value items which have the most impact on carrying value. 

Business One is extremely flexible in setting up your posting periods.   The following tips and tricks are key to meeting the requirements for posting within Business One while meeting your company's fiscal requirements.  You can have 1 posting period per year, 12 monthly periods, 52 weekly periods, etc.  Some companies use a 4-4-5 week posting date series for their "Monthly" buckets.

Business One version 10 is the latest major release from SAP for its small to mid market product and the bedrock of SAPDistribution.com.  SAP continues to deliver on its vision of the Intelligent Enterprise through a strategy centered around: