The challenges of small orders
Ordering small quantities is a waste of capacity and capital: Which mechanical and plant engineer, steel constructor, shopfitter or exhibition stand constructor is not familiar with this? A customer calls and requests a specially designed spare part for an existing construction or simply needs very small quantities from their own product catalogue. In such cases, the company’s own administrative costs quickly exceed the actual value of the goods, and the order can no longer be economically presented without minimum order surcharge.
However, a minimum quantity surcharge is a nuisance for many customers, especially those with higher annual sales. In addition, time-consuming discussions arise with every order. The decision was therefore quickly made to offer good customers impeccable service without a minimum quantity surcharge. But who is going to check at the end of the year to see if the numerous small orders have not perhaps swallowed up too much capacity and, above all, financial expenditure, and cast a poor light on the nice big orders? Quite simply, this controlling work often cannot be carried out in medium-sized companies.
This is how you can reduce your administrative costs through ERP integration:
What could a win-win situation for providers and customers look like? To get a little closer to a possible solution, let’s first take a look at the cost-driving administrative activities:
- Recording customer requirements: By email or phone
- Creating an offer or determining prices: Automated by the ERP software
- Recording the order confirmation in the ERP: Automatic data transfer from the online shop to the ERP system
- Development in the work preparation: Automatic creation of order parts lists and production documents and transfer to production without manual effort
- Recording the delivery note and invoice in the ERP system: Automatic creation and dispatch through ERP and online shop integration
From the online shop order directly to production: This is exactly how we could plan your solution. An online shop software takes care of points 1 to 3, i.e. from the customer requirement to the recording of the order confirmation. The customer conveniently orders some products or spare parts from the standard catalogue for his systems via a web application and the shop software automates the commercial processing. An interface to the in-house ERP system (e.g. SAP, Microsoft Business Central, Asseco AP+, ams.erp or ProAlpha) now simultaneously creates the order in the ERP system, including all items and customer information. Manual rework by an administrative employee is no longer necessary, since all information about the system has already been transferred from the online shop to your ERP solution. The customer, on the other hand, receives their order confirmation directly from the online shop, fully automatically and depending on the stock level or production time of the components.
The particularly annoying time in the work preparation (point 4) for the preparation and creation of the production documents can now also be saved by the ERP system itself or by an interface. By linking the ordered item with the appropriate master bill of materials in the ERP system, a production order (or order bill of materials) is automatically created. It is, of course, up to you to decide whether the order should only be checked by the work preparation department and, if necessary, printed out, or whether it should be sent directly to your production department without any further loss of time. However, as a rule, there is no reason not to fully automate the process.
Even the last of the five steps, i.e. the creation of the delivery note and invoice, can be largely automated. Many modern online shops today offer access for developers via a so-called API. This means that the shop can also be operated without the pretty front end using certain commands. Thus, a connection can be established between the ERP system and the online shop and, when the components are ready in production, the delivery note and invoice can be created by the shop and sent by email.
Overview of the benefits of implementing an ERP system
ERP software for reducing costs
Overall, ERP software offers a number of advantages that can directly contribute to reducing operating costs:
- Automation of processes: The automation of many manual tasks minimize errors and saves time and resources. This leads to greater efficiency and a reduction in personnel costs.
- Efficient order processing: The software takes over the automated recording and processing of orders, which leads to faster order confirmations and an overall more efficient processing. This saves time and reduces administrative costs.
- Improved inventory management: With a real-time overview of stock levels, inventories can be optimized. This avoids overstocking and stockouts, which in turn reduces storage costs.
- Cost control and budgeting: A better overview of all expenses enables more accurate adherence to budgets. This helps to avoid unnecessary spending and to focus financial resources.
- Scalability: An ERP system supports business growth without costs increasing proportionally. It adapts to increasing demands and a growing number of users without the need for significant additional investment.
Success story: Schmitt Stahlbau GmbH
One of many other points is the increasing presence and the increased acquisition of new customers due to the improved findability on the web. Many online shops are already SEO-optimized by default and, when fed with the right content, can give your company a powerful boost in Google searches. Depending on the industry and product range, it is also possible to expand the customer base from B2B to B2C. This is what happened, for example, at Schmitt Stahlbau GmbH, which offers products in the industrial steel construction sector, apparatus and container construction, as well as pipeline and pipe support construction with unit weights of up to 25 tons. An online shop that is fully integrated into the ERP system has not only reduced administrative costs for small individual orders of pipe clamps and round steel brackets, but has also expanded the customer base to include B2C. Click here to go to the online shop for pipe clamps and round steel brackets.
Take advantage of the possibilities offered by ERP integration to reduce your administrative costs and increase your operational efficiency.
