“We Don’t Need Lot Tracking In Our Company”

May 28, 2012

lot-tracking-software-traceabilityFor many years, lot tracking inventory has not just been good company practice. In a number of industries, regulating agencies such as the FDA, CFIA, and ISO are now mandating that products be lot-tracked from the time they are received until the time they are delivered to the customer. In the Food Industry, there is a huge push to force all Food Manufacturers and Food Distributors to be able to lot track the products they distribute. With the signing of the Food Safety Modernization Act by President Obama in January of 2011, the FDA now has far more authority than ever to force these requirements.

In the event of a product recall it is the responsibility of all Distributors and Manufacturers to inform their customers that they may have been shipped potentially harmful products. The information provided should indicate what products and lot numbers of the products need to be removed and the appropriate action to be taken.

Let’s assume that a product you are distributing has been recalled. What happens next? There are basically three methods to proceed.

  1. If you do not track products, you manually look at all the orders you have shipped with that specific product over the past few weeks. You then call all the customers you shipped that product to and tell them to remove the entire product quantity as you do not know what you shipped them. This could potentially be a very large financial loss to your company as all the products are being removed. If you cannot determine who you shipped the product to, there could even be legal ramifications.
  2. You manage the traceability of your products by manual processes or using software such as Excel. When the recall is announced, you can track back to the specific products and determine who they were shipped to. Although you were able to manage the recall, were all the hours you spent over the days and months keeping your manual processes up to date worth it?
  3. As part of the software to manage your business you have the built-in ability to have the software automatically manage Lot Tracking for you. At the first sign of a recall, you perform a quick search, generate a report of those customers who have received the specific product and contact them to take appropriate action.

Lot Traceability is like having life insurance. You buy it but you hope that you never have to use it.

Import & Export Software – What to Look For

May 18, 2012

import-export-softwareThis post outlines functionality one should expect from Import and Export Software.

There are so many software packages out there these days that it can feel like you’re drowning when searching for information.  So we try to break things down by identifying specific functionality that is important for your type of business, to help you narrow down your search. Today we’re focusing on functionality important for wholesalers and distributors, where importing or exporting make up a significant part of the business.

Landed Cost Tracking

Landed cost tracking is extremely important for importers to allow for accurate inventory costing. Proper landed cost tracking will allow you to accrue costs associated with bringing items into inventory, such as brokerage, duty and freight. Without taking landed costs into consideration you may be selling items at what appears to be a profit, only to later discover that they were sold at a loss (or a significantly smaller margin). Software with robust landed cost tracking is vital for importers.

To learn more download our Landed Cost White Paper.

Automated Customs Processes

ERP software vendors with experience dealing with importers and exporters can usually offer the advantage of automated systems to streamline the process of dealing with customs documents. For example, the system should be able to generate a Customs Declaration Form upon entering a purchase order automatically. If your organization spends significant time creating and dealing with customs documents, consider including this as an important part of your evaluation.


When dealing with customers and vendors in countries all over the world, multi-currency capabilities are important, for properly incorporating exchange differences into your product costs and prices. A multi-currency system will allow you to specify different prices for each item depending on the customer’s currency, and automatically account for differences in exchange rates between transaction and settlement dates. It’s important to always know how much your customers owe you in the currency in which they’re going to pay (and vice versa for suppliers).

This list is by no means exhaustive, but is meant to serve as a starting point for some of the most important features that importers and exporters should be looking to get from their software system.

Stop Losing Money! Landed Costs Revisited…

May 15, 2012

landed-costs-avoid-losssesSometimes telling a prospective customer the truth can offend him / her, but not doing so can ultimately do both of you a disservice. If you’re thinking of buying my company’s Inventory Accounting Software, I believe it’s best for both of us that we address any inaccurate or inadequate business processes up front, to ensure that if you do implement our system, you’ll realize the maximum benefit.

Here’s a summarized version of a conversation with a business owner:

Me: “Tell me about your suppliers.”

Owner: “We mostly buy directly from the manufacturers, in Thailand, South Korea and India.”

Me: “Ah, so you’ll need to track landed costs.”

Owner: “Huh?”

Me: “You’ll want to factor costs like duty, brokerage, freight and insurance into your inventory cost and cost of sales.”

Owner: “Not really. We just expense those items based on our broker’s invoices, and shippers, etc.”

Me: “Then how do you establish selling prices and track your gross margins?”

Owner: “We just use the price we pay the supplier as our cost, and mark that up by the target percentage.”

Me: “So you’re OK with potentially losing money on certain products without knowing it?”

Owner hung up.

Hopefully you already see what the business owner was missing. Those additional costs, incurred solely to get saleable product into your warehouse, are part of your inventory cost. If you buy a widget for $100, and sell it for $125, you’ve made a $25 gross margin. Seems worthwhile. But if you paid $12 in duty, $5 in brokerage and $9 in freight costs to get the product, did you still make money on it?

Many people confuse this with covering general business expenses. But costs such as rent and wages would exist anyway. However, the only reason you paid those duty, brokerage and freight costs was to get the product in so you could sell it. Therefore if you don’t cover those costs in your selling price, you’d be better off not having purchased it in the first place.

So why do so many small business owners continue to ignore these landed costs? Is it because their existing software does not support landed cost tracking? Is it because they’ve not thought this out? Or is there some other reason?

Good ERP Software Support

May 1, 2012

Good ERP Software SupportYou have just implemented a system that seems like a good fit for your business. It was a fairly cheap solution but seemed to check out just fine.

You are now experiencing some problems, and need software support. You’ve called in for assistance, and one of the following happened:

  • You were re-routed to a representative in another country
  • You waited on hold for a long time before speaking with someone
  • When you finally reached someone they spent a considerable amount of time looking up your account and orienting themselves around your business and problem

Does this sound familiar? It does not have to be this way. The good news is that good ERP software support does exist; you just have to look for it. When evaluating a software system, do not ignore tech support; it is just as important as other decision criteria.

Specialized software support may cost more, but having your questions and issues dealt with swiftly and resolved completely is of itself valuable to a degree that’s often underestimated – at least until you encounter your first serious problems. Sometimes smaller and more specialized software companies can provide a level of personalized support that just isn’t available from the so-called “brand names” of the ERP world. With off-the-shelf horizontal software vendors, you and your business are just numbers – numbers among many others.

Let’s take a moment to examine what good software support looks like:

  • You call in to one number to handle all problems
  • After selecting a single menu option, you are immediately connected with a support representative located in the company’s head office along with the rest of the team
  • This “support representative” is, in fact, one of the people that assisted you with your software implementation. They know your business inside and out and you will continue to deal with them for support requests going forward

They help you work out your issue on-the-spot without having to determine who you are and how your business operates

Believe it or not, some software solutions offer support in this way. If you are not getting this level of support, you should know that you should be – that there are options out there.

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