Using Acumatica Import with an Alternate Key

When importing data into Acumatica using the Integration tools, I was under the impression you needed to have the key to a record in your data to update the existing record. Thankfully, I was wrong and Acumatica provides an easy way to do this, when you know the secret…

A good example of how to resolve this issue is the way the MaxQ Cannabis solution reconciles lab testing records. In MaxQ Cannabis, there is a form that allows a user to track the testing of different products by their lot number. As required by law, these lots need to be tested by a certified independent lab. The lab technician will go onsite and take a small sample of the lot to be tested, and in doing so creates a new lot number for the sample. The lab will test the sample and report the results by using its lot number, hence the issue. We need to use the lab’s lot number to find the correct lab results record to update the test results (see image below).

As you can see, we have the Lab Package Tag (Acumatica Lot Number) as a field on the lab report and need to update the Lab Result ID for record id 00000012.

The Lab Package Tag is part of the Lab Results Selector. We need to add some special lines to the import scenario to accomplish this. Notice the first three lines of the image below. We are telling the import scenario to use the Lab Package Tag to look up the Lab Results ID and update the data.

More information on this importing technique can be found in the Acumatica I100 Integration Training Guide section “Updating Auto-Numbered Records by a Selector Column (Customers).”

Note: To use fields that are not part of the id’s selector, you can use the special @@ method (shown below). This is documented in the Acumatica I100 Integration Training Guide section called “Updating Auto-Numbered Records by Custom Key (Customers).”

MaxQ is a provider of advanced Acumatica business solutions across a wide range of applications and industriesContact us to learn more about how MaxQ for Acumatica solutions can help your business.


How to Fix Incorrect Purchase Receipt Accruals

                                    In this series, we answer real-life questions from Acumatica users

QUESTION:  I have a variance in my PO accrual report. How do I correct it?

ANSWER:  If you have a report in which there is an accrual account difference, the cause may be multiple Reversals of AP Bills. If this is the case, here is how to resolve it:

First, if you perform a Reverse Action in an AP Bill created from a PO Receipt, as shown below:

Please note that the system provides a warning:

If you continue, all links to the PO Receipt are carried over to the Debit Adjustment (highlighted below):

Unfortunately, there is no restriction to the number of times the AP Bill Reversal Action can be performed, allowing, in this example, creation of a second Debit Adjustment tied to the same PO Receipt:

When the Debit Adjustments are released, the result is double Unbilled Quantities and Unbilled Amounts in the Purchase Receipt Accrual Details report:

RESOLUTION

It is not apparent how to correct this error. You can do so by creating a new AP Bill against the PO Receipt:

The system will take all documents associated with the Receipt into account and create a net Bill, i.e., double the Quantities and Amounts, as shown in this example:

Once the Bill has been released, the PO Receipt has been cleared from the report:

MaxQ is a provider of advanced Acumatica business solutions across a wide range of applications and industriesContact us to learn more about how MaxQ for Acumatica solutions can help your business.


How Do the Different Revenue Recognition Methods in Acumatica Affect Revenue Recognition?

In this series, we answer real-life questions from Acumatica users

QUESTION: How do the different revenue recognition methods in Acumatica affect revenue recognition?

ANSWER:  Recognition methods determine how a deferred revenue or expense amount will be distributed over a defined number of periods. Within Acumatica, you can specify a particular recognition method in the settings of each deferral code on the Deferral Codes form, and can assign a deferral code to a line of an invoice or bill. Revenues can be deferred in a number of ways and over different time periods that you select. Besides choosing a recognition method, you must input the beginning and end dates.

Acumatica enables you to choose the revenue recognition method that best meets your needs. Following are examples of five recognition methods that can be selected within Acumatica ERP, including:

  • Evenly by Periods
  • Evenly by Periods, Prorate by Days
  • Evenly by Days in Period
  • Flexible by Periods, Prorate by Days
  • Flexible by Days in Period

The screen below shows an invoice generated in Acumatica for $7,500 of revenue that is recognized evenly over a five-quarter schedule:

Evenly by Periods

With the Evenly by Periods recognition method, the amount to be recognized is distributed evenly among all included periods. The number of recognition periods is defined by the value you specify in the Occurrences box for the deferral code on the Deferral Codes form.

The screen below shows how you set the Deferral Code for Quarterly Evenly by Periods over a three-period range:

The screen below shows the deferral schedule that is generated:

Evenly by Periods, Prorate by Days

With the Evenly by Periods, Prorate by Days method, the amount to be recognized is distributed evenly among recognition periods (the number of which is defined by the value specified in the Occurrences box on the Deferral Codes form). The first and last periods are counted together as one recognition period and the amount to be recognized for each is proportional to the number of days in each period.

The frequency of occurrences depends on the number of financial periods you select in the Every X Period(s) box. The installment amounts for the first and last periods are calculated based on a full-period amount that is proportional to the number of days each installment should cover.

The screen below shows how you set the Deferral Code for Quarterly Evenly by Periods, Prorate Days over a three-period range:

The screen below shows the deferral schedule that is generated:

Evenly by Days in Period

With the Evenly by Days in Period method, the amount to be recognized is distributed by periods with a proportional division by the number of calendar days in each period. The number of recognition periods is defined by the value specified in the Occurrences box in the deferral code settings on the Deferral Codes form. An occurrence is a recurring recognition event for which a recognition transaction is generated. The frequency of occurrences depends on the number of financial periods you select in the Every X Period(s) box.

The screen below shows how you set the Deferral Code for Quarterly Evenly by Days in Period over a three-period range:

  

The screen below shows the deferral schedule that is generated:

  

 Flexible by Periods, Prorate Days

With the Flexible by Periods, Prorate by Days method, the amount to be recognized is distributed evenly among periods, with a proportional division by days among the first and last periods. The first and the last periods may be less than a full period, depending on the start recognition date and the final recognition date specified in a particular document (such as AR invoice). The number of recognition periods is defined by the recognition dates specified in a document.

The screen below shows how you set the Deferral Code for Flexible by Periods, Prorate Days:

The screen below shows the deferral schedule that is generated:

Flexible by Days in Period

With the Flexible by Days in Period method, the amount to be recognized is distributed among periods, according to the number of calendar days in each particular period. The start date and the final date of the recognition process is specified individually for each line of a particular AR document (such as AR invoice or cash sale).

The screen below shows how you set the Deferral Code for Flexible by Days in Period:

The screen below shows the deferral schedule that is generated:

MaxQ is a provider of advanced Acumatica business solutions across a wide range of applications and industries

Contact us to learn more about how MaxQ for Acumatica solutions can help your business.

 


Cloud Backup Is Your Best Protection from Ransomware

Ransomware has become the biggest malware threat on the Internet. It gives you a choice between losing critical files and paying the crook who wrecked them. Victims have handed over as much as $17,000 to get their files back, and there’s no guarantee you’ll get them restored even if you pay. The surest defense is an up-to-date cloud backup with a safe copy of all your files.

What is ransomware?

 

Ransomware usually starts with a phishing email message. If you open the attachment, it runs a script that downloads and launches the actual ransomware. It runs quietly in the background, replacing files with encrypted versions. When it’s done, it puts up a message on your screen telling you what’s happened. The files are now all in a form which is useless to you, because you don’t have the key and the crook does. If you want to see your files again, you have to send a payment, usually an anonymous Bitcoin transfer. After that, you might get the information that will decrypt your files.

To force you into a hasty decision, the message may threaten to encrypt more files if you don’t send a prompt payment. That’s not an empty threat.

Your situation as a ransomware victim isn’t as hopeless as the extortionist would like you to think. There are ways to recover files from many kinds of ransomware. But you’re best off if you have a safe copy of all your files. Then you just have to remove the malicious code and restore the files.

Unfortunately, a local backup drive doesn’t help much. The malware will look for any attached drives and corrupt the files on them as well. You need a backup which isn’t part of the computer’s file system and is safe from unauthorized access. Cloud backup is an easy way to accomplish that.

How cloud backup protects you

 

Only the backup software can reach files copied to a cloud service. Malware on your computer can’t touch them. MaxQ backup software encrypts files in transit, so no one can intercept or alter them. It encrypts them on its servers, so they’re always safe.

The more frequent your backups are, the safer your files are. If they’re updated every hour, then you stand to lose only an hour’s work. That’s a lot better than losing everything.

Versioning increases your safety. If your backup keeps running after ransomware has damaged files, it will back up the damaged versions. A versioned backup system keeps older editions of the files as well, so you can restore the last good version.

 

Cloud backup is different from a cloud drive. If your files on a cloud service are mapped to your computer as a virtual disk drive, they’re subject to attacks. (Any good cloud service will back up its own files, though.) Files in a cloud backup system aren’t vulnerable that way.

 

If you’re hit by ransomware

When you get a ransomware notice, the first thing to do is shut down the computer. That will keep it safe from further damage. Have an expert in malware removal work on it to make sure there won’t be a recurrence. Upgrade the security software so that the computer won’t be re-infected.

After you’ve done that, it’s safe to restore your files. Be careful not to restore any infected system software. The process will take a while if a lot of files were damaged.

The encrypted files are harmless in themselves, so it isn’t necessary to aggressively remove all of them. You don’t want to accidentally delete good files created since the last backup. Erring toward leaving some encrypted files around is safer.

Having your files regularly backed up provides double satisfaction. You know that they’re safe from ransomware, accidental corruption or deletion, and physical failure. You also know that crooks aren’t going to collect your money as a reward for wrecking your data.

MaxQ Cloud Backup is just one of the ways we help keep your data safe and manageable. Contact us to learn more.

 


4 Ways the Cloud Improves Supply Chain Planning

Supply chain planning used to be more of a guessing game, relying on intuitive managers that, basically, had the inventory and sales data in their heads or on spreadsheets. Advancing technologies have been changing how business processes are: managed, planned, and accomplished – shifting thinking patterns from managing inventory and sales to managing functions and tools within ERP systems. 2017 seems to be the year when a balance will emerge more distinctly; let’s discuss this more by examining 4 ways the cloud improves supply chain planning.

#1. Automation:

Manufacturers and distributors have many working parts to manage within their enterprise systems, including supply chain planning. The real-time functionality of cloud based software brings continuous adjustments, and specified filters determine automated functions to streamline purchasing and order management.

Automatic updates to SaaS, IaaS, PaaS systems also help managers and IT departments focus on strategy, rather than managing systems and tools. Effective supply chain planning depends on real-time numbers from a continuously updated system, including: historical business intelligence, special projects, discounts, engineered to order products, vendor costs, and more.

#2. Enhanced Integration:

Cloud based subscription software is easier to integrate into enterprise systems and gives more functionality with add-ons. This enhanced integration brings more flexibility to businesses with supply chain planning. For instance, if there’s a need for an order management add-on or a custom software solution for a project.

There’s no one size fits all solution for manufacturers and distributors; each business has unique supply chain planning needs according to their: clients, products, systems, and compliance/regulation requirements. Enhanced integration capabilities with cloud based software helps businesses adopt necessary tools and functions with more agility.

#3. Predictive Business Intelligence:

Again, the cloud provides real-time automation, enhancing a business’s ability to predict supply chain patterns and needs. Human intelligence augmented with predictive business intelligence, brings the best of both worlds for supply chain planning.

Planning and strategy have always needed business intelligence from data analysis. User defined formulas combining: past history, present demand, material specifics, and customized options – give managers actionable insights into: inventory, sales, times, costs, and needs, with real-time availability and updates. This streamlines supply chain planning with more precise predictions.

#4. Enhanced Collaboration:

Supply chain planning is a team effort for nearly all manufacturers and distributors, involving: sales teams, warehouse teams, executives, vendors, clients, accounting departments, etc. Cloud based software enhances collaboration between team members anytime, anywhere, and with any digital device. This expands remote capabilities, creates continuous planning development, and gives more tools for collaboration methods.

Modern businesses are using mobile devices to their advantage, at home and at the work place. Remote accessibility is a distinct advantage businesses have when using cloud based software solutions, creating efficiency and flexibility in the supply chain planning process, which is often time sensitive.

Using the expanded capabilities of the Microsoft Dynamics platform, including CRM software, businesses will have multiple methods of collaborating during the supply chain planning process. Cloud capabilities will enhance these tools with remote and real-time functionality, enhancing collaboration methods and planning effectiveness.

Summary

Cloud based subscription software is simplifying business processes and adding functionality with centralized integration. For businesses and organizations with many moving parts and large fluctuating inventories to manage, this is streamlining day-to-day tasks, including supply chain planning.

 

Through automation, integration, BI, and mobile computing, managers now have optimal organizational tools with cloud based software solutions.

Max Q Technologies has certified expertise with Microsoft Dynamics and Acumatics products and can help manufacturers and distributors to: choose, implement, and manage the right software solutions for their unique business’s needs.

We also develop custom software solutions with top developers and industry expertise across all fields. We’re offering to be a comprehensive technology partner with nearly 30 years experience, for businesses that want to take advantage of cloud software for supply chain planning and more. If interested in learning more please contact us today.

 

 


Why Companies Are Shifting to Cloud Backup

Cloud Computing

As the need for data storage and backup increases exponentially from year to year it creates a significant challenge for businesses. Since data is the most valuable asset for most organizations, it’s not only important to have adequate backup for digital information, but it’s also important that data be accessible whenever needed and it must be kept secure from threats. Also, because company budgets are tight, organizations are seeking to consolidate technology rather than expand it. Given these facts, the strategy of continually buying more storage devices is not feasible.

For most businesses, especially smaller ones with less than 500 employees, the preferred solution is to move data backup to the cloud. By adopting this strategy, companies eliminate the hassles of data backup without relinquishing control, and usually with reduced costs. Read on to learn about the primary reasons that most companies are switching to cloud backup.

Reduced IT expenditures

According to Gartner, a leading research organization in IT research, the number one reason cited by CIOs for shifting to cloud backup was cost. By moving the backup to a cloud vendor, a company saves on a variety of costs, including space, energy, computer hardware, software, and maintenance. Plus, backup operations are automated and streamlined, which provides additional savings on personnel costs.

Enhanced Security

According to research by the Ponemon Institute, the average cost for a data breach is $3.79 million. Many small and medium-sized businesses do not adequately invest in protecting data. Cloud backup vendors offer a variety of security features to protect data such as encryption, password management, digital signatures, adaptive protection and agentless backup technology. A good cloud backup service provides proactive and adaptive protection against security and privacy breaches on a continuous basis.

Ease of Scalability

As data storage needs continue to grow rapidly, scalability has become crucial for many businesses. By using a cloud backup service, companies need not worry about hardware upgrades, increased maintenance costs, or additional space requirements. There are also no concerns about server sprawl, data sprawl, or business interruptions that result from adding new hardware, network infrastructure or software upgrades. Most cloud vendors are willing to scale with a company’s data growth while ensuring that data remains readily accessible.

Data Recovery

 

It is essential to have access to backed up data whenever needed. Cloud backup vendors provide a variety of options for data recovery and have a state-of-the-art infrastructure that ensures backups and restorations are done quickly and efficiently. These procedures can be done through an intuitive, one-step, point-and-click interface. Some vendors also offer bare-metal recovery, which restores drives that have been destroyed by natural disasters or corrupted software.

Regulation Compliance

One of the major concerns companies have about their data relates to regulatory compliance issues. In the event that a company must provide documents or records to demonstrate compliance, data often needs to be accessed quickly. Some on-site solutions like tape backup can delay data access for days, which could be potentially disastrous in a critical situation. Cloud backup services prevent these disasters by providing fast access to data whenever it’s needed and by providing templates that suggest the recommended backup plans for each industry recommended backup type and frequency such as HIPPA, PCI, etc.

Manage Duplication of Files

A major reason for inefficiency in many organizations is overly-duplicated data. For example, a video or PowerPoint presentation, when worked on by over a dozen employees, could end up being backed up many times, which unnecessarily burdens your company’s system. A cloud backup service can offer solutions that compress and eliminate unneeded duplicates, only backing up changed or new data, thereby resulting in greater efficiency and organization.

Given all the advantages listed here, it is apparent why the majority of organizations are making the switch from traditional on-premises technology to cloud backup services.

To learn more about cloud backup technology, or to find out how to leverage a variety of other IT solutions for your business, contact us today.


Power BI embedded to offer greater compatibility, accessibility

Power BI

Microsoft’s youngest member of the company’s collection of programs for businesses, Power Business Intelligence (BI) will allow for integration into mobile applications.

Microsoft made this announcement during its build conference in San Francisco earlier this month. With the introduction of its embedded capable version of the software, the company hopes that more people, particularly application developers, will be able to use the software. This version will utilize the company’s Azure Stream Cloud service and it is targeted toward independent software vendors.

“You can now take the Power BI data visualization and reporting functionality, and directly integrate it within your own applications,” Scott Guthrie, executive VP of Microsoft’s cloud and enterprise business, said during the conference.

Power BI Embedded through the Azure Cloud would be priced in line with other applications that are currently available on the platform.

Power BI was introduced to the Office 365 platform in 2014. It supplies data analytics capabilities and users can create visualizations and data reports across their organization. Guthrie also noted during the conference that application developers can utilize the embedded version without having to require end users to be aware of the software as a part of their application experience.

According to Microsoft, there are approximately five million Power BI subscribers as of March of this year. With this announcement, the company anticipates that user base will grow as access increases.

MaxQ Technologies, Inc. specializes in reselling technological solutions for multiple industries including manufacturing, distribution, consumer goods and professional services. I Feel free to contact us for your business technology needs.

 


Power BI: Fixing Problems

Power BI

If you’re new to Power BI from Microsoft, then chances are good that you’re going to encounter some issues with using the program exactly the way you want. Here are some problems you may encounter as you make your way through the program, including some solutions as to how you can potentially solve them.

Lack of Access to Reports While on the Go

Power BI has been often thought of as primarily a desktop application. In general, the reports that Power BI generated was being read in a thoroughly immobile situation like at your office or in a conference room. But if you need to view reports on the go for whatever reason, the service has recently updated to allow for mobile reading.

It’s available in the Windows 10 mobile app as well as the app for iPhone and reports are that it will shortly appear in the Android app as well. In the app, this is accessible from the menu icon with three lines in the top left corner next to where it says “My workspace,” for example. This involves opening the tile when you’re in focus mode and then hitting the option to open the report you want.

Trouble Forecasting Sales

Using modern computing technology such as Microsoft BI to predict and manage sales is one of the more popular ways to use it. You can do this in Power BI using something called Cortana Analytics. According to the site, this gives you 95% accuracy when it comes to reporting. Once you activate the prediction you gain access to a number of different visualizations such as predictions per person in terms of money earnings so you can see a comparison.

Trouble Comparing Groups in Graphic Detail

There are plenty of tools for doing a very basic comparison between two groups, but if you want a visualization that has a significant amount of specificity. One option is to use the gap analysis visualization that was recently announced from Microsoft. The tool specifically helps show how two groups are different when it comes to multiple different traits and categorizations. That way, you can see instantly whether one group performed better in one particular category over another group, how much better the first group did in terms of the gap in performance, and so on.

This also includes the ability to organizing the gaps however you want, such as showing which category gap between the two groups was the largest.

PowerBI gap analysisDifficulty with Showing Shopping Behavior

Obviously, the crux of just about any business is going to be the shoppers or clients. In the case where shopping is done online or in another information-rich environment, it’s important to focus on the possibility of accurately depicting the behavior of the consumers of your products in visual form. After all, this is often useful for both intra-company external use. One option for doing this inside of Power BI is called the Sankey Bar Chart. The chart makes it easy to show important aspects of the process such as drop-off.

So, when you’re trying to figure out exactly where a major drop-off for your product is, this chart is useful. It works through a bar chart that quickly shows the difference between various stages of any process like your shopper’s user experience. Each of the bars will be connected since each of them represents a different part in the process. The connections between the bars will show what exactly is dropping off. That way, viewers can figure out what the problem is in their process and immediately put effort into correcting the issue. Creating value for viewers is the important thing in the process, after all.

PowerBI Sankey Bar Chart

Data integration Issues

If you’re having trouble figuring out how to easily get all of your data or the data of viewers into the program, one thing that you can now do as of approximately a year ago is combine Excel BI and Power BI Designer. Essentially, Excel is a program you can integrate with Power BI. If you have the 2013 version of the program, you can use Excel Workbooks to publish whatever you want right into Power BI. This also lets you share any analysis, data, or other types of visualizations with other people also using Power BI.

If it so happens that you don’t’ have a version of Excel such as Excel 2013, this doesn’t mean that you’re completely out of luck, however. You can instead use a similar reporter-creating tool inside of the software. It’s possible to import data from other sources this way directly and then model it and publish it straight to the service that Power BI provides.

Lack of Universal Data Access

Power BI now has the ability to allow you to access cloud services directly from it. So, if you previously had difficulty with importing and streaming data due to using a different program or a version of Power BI that didn’t work well with this, you will be able to use these new capabilities

Falling Behind Competitors Due to Time Lapse

Many options for metrics often have a lapse between when you first activate them and when they portray the metric. This is one of the advantages of Power BI, specifically that you can portray everything in real-time on your dashboard. It means that you can fix any issues that come up in your business exactly as they occur without a delay.

For more information on Power BI and related topics, please contact us today.

 


An Introduction to PowerBI

An Introduction to PowerBI

 

In his TechRepublic article, “Microsoft Power BI Brings Big Data to the Little Guys,” Tony Bradley neatly describes Power BI :

 

“Power BI enables users to search data within their own network, or access data from public sources. Users can query in plain English and easily convert the results into interactive charts or maps to put it into context that can help guide business decisions.”

 

Microsoft originally launched Power BI as part of Office 365 in July 2013.  In late July this year, it became generally available and by that time had gained 45,000 users in 185 countries.   The July updates included“new chart types, a refreshed desktop application, and support for collaboration in groups on shared sets of data.”  Microsoft Corporate Vice President James Phillips said that once the service reached general availability, the pace of launching new features would increase.  In fact, Microsoft is adding new features weekly.  Phillips also said that soon Microsoft Power BI will “offer the ability to make custom visualizations.” 

 

The major advantage of Power BI over competition in analytics products is the ease of use.  “A major point of pride at Microsoft is that you can get started and get productive within 5 minutes of creating your Power BI account, creating charts and “slicing and dicing” your business data in cool and interesting ways …”

 

Trek Bicycle availed itself to the benefits of using Power BI.  David Peterson, Enterprise Collaboration Manager at Trek began using “a Microsoft Power BI workbook daily as a way to efficiently manage and track Helpdesk activity and customer service requests, including how many customer “tickets” – customer requests – are open and for how long.”  With the visual help of charts and graphs, he was able to view his data in a way that increased his reaction time.  This greatly accelerated his ability to make his team more efficient and productive.

 

MaxQ Technologies, Inc. would like to hear any questions you may have about Power BI or any other services, so please, contact us. Thanks.


7 Great Benefits of Vendor Managed Inventory

 

Vendor Managed Inventory

Vendor Managed Inventory, or VMI, is a business relationship where a manufacturer or distribution business takes over management of inventory for a retail or wholesaler. Using Electronic Data Interchange (EDI) or other electronic methods for communication, the vendor of the product will manage orders and fulfillment for those further down the distribution chain.

VMI: Managed vs Consignment

There is significant difference between managed and consignment sales types of VMI, and some similarities/differences which merit further discussion before we look at the benefits of VMI management. Consignment is where the vendor retains ownership of the product until the time when it is sold to the end user. When the inventory is sold, the retailer takes a commission of the price and sends the rest of the money back to the vendor, as payment.

VMI can be used with consignment products, but does not have to be. VMI can as be used as “Managed”. In this case, the goods are sold to the retailer at the time of shipment, but the vendor manages the inventory levels at the customer’s sales location. The Vendor does not wait to receive a purchase order to restock; the vendor handles replenishing the inventory to maintain optimal sales. In some VMI relationships, it means the vendor creates and maintains the displays at the sales location and stocks them to make certain they are full.

VMI is dependent upon having the right software and the right relationships with customers. Since communication between customers and vendors is essential to a successful VMI system, the right software will need to facilitate communication via the cloud to increase access and communication.

 

Increased Customer Service

Perhaps the most important aspect of VMI is the improved channel communication. Manufacturers, distributors and retailers/wholesalers have to build communication systems utilizing advanced software.This provides both you as the vendor and your customers with information necessary to operate a VMI system. Additional results from increased communication and cooperation are better customer service, improved quality, reduction of costs and increased sales.You improve your customer service by accurately and swiftly responding to your customers’ needs.

Better Planning

To establish a proper VMI relationship, you must have access to a significant amount of data from your customers, including POS and inventory adjustments. This data provides you the information necessary to create an optimal inventory management plan. Additional uses for this information include order management, income planning, parts and supplies planning, HR and more.

Rather than guessing how much product a customer will need based on intuition or limited information, VMI gives both parties the right information needed to optimize the supply chain.

Strategic Business Alliances 

VMI benefits business relationships between more than just you and your customers. Distributors often take part in a VMI relationship, increasing the accuracy and efficiency of your inventory management while decreasing the costs. Often a distributor will receive the same sales data the vendor does and then optimize the inventory at the customer site to reduce costs to the vendor and to decrease turn-around time when the customer needs new inventory.

Additionally, the same system of communication built with your customers can be used to build relationships with your suppliers to increase your use of JIT inventory in your manufacturing processes. While any business relationship needs to be entered into with caution, the systems that businesses need for VMI facilitate much stronger business alliances across the entire supply and distribution chain.

JIT Inventory

JIT stands for Just-In-Time. JIT, focuses on only ever having enough inventory on hand to meet current needs. The amount of inventory needed depends on your product type, how fast it will move off the shelves to consumers and how long it will take to produce more. Because of the complicated management systems required, JIT inventory management has only recently become affordable options for businesses because of the advances in the cloud, IT speed and storage and business systems.

Your customers want to utilize JIT inventory to get the most out of their physical space and reduce costs to their business. With VMI, you establish JIT inventory levels for your customers and produce according to that need. You see their sales and inventory levels and now have a better insight into their need.  This has tremendous advantages for manufacturers and warehouses as well as for their customers. Leading to much better forecasting for the vendor, inventory levels can be really optimized for both parties.

Variation from Franchising

For many businesses, the advantage of franchising is maintaining control of parts and inventory down the distribution chain. Napa Auto Parts has consistent pricing, inventory and displays for all their manufactured goods, no matter the location. This is just one of the major advantages of franchising. With the increased communication with your customers through VMI, you have the opportunity to build quality control into your relationships with your customers. This means that you can have a hand in marketing your inventory to the end users of your product, not just the other businesses in your distribution chain.

Advanced Forecasting

Accurate forecasting requires data. The more data you have about sales results, the more information you can infer about customers, about seasonal trends, about the demand curve and your product life cycle. With historical data and an understanding of the causes of trends through common sense and experimentation. A spike in car parts from May-September could be caused by summer travels, for example. With the large amounts of data gained by using a vendor managed inventory system, you can improve accurate forecasts of the most likely scenario for increases and drops in demands. This aids long-term strategic planning and short-term order fulfillment.

Reduction of Sales Costs

Storage adds significantly to the costs of your product.  You incur costs to store inventory waiting for an order, your customer also incurs costs storing inventory waiting for a sale, you have collectively added significant costs to each item sold. Whether this cost is visible or not, it is there.

These 7 benefits show that with the right IT and communication, Vendor Managed Inventory is an excellent way to increase your customer service offerings, whether you are a manufacturer or a distribution company. Integrate VMI to build relationships, improve quality of product delivery, increase income and decrease costs.

We offer complete warehouse management solutions that integrate well with any VMI system you may put in place. Contact us today to see if our WMS will work for your business’s needs or for more information about business systems to improve your bottom line.