Hydraulics & Pneumatics industry: Why complete visibility is key for increasing profits


Posted on: 12 August 2019
By: Amy Bruce, Software Specialist

Why complete visibility is key for increasing profits

All ERP solutions are designed to connect the areas within your business that deal with order processing, customer service and stock management, allowing you to gain control to improve efficiencies, increase productivity and ultimately boost profits. Gaining control of your processes, however, inevitably improves the visibility you have of your business performance allowing you to highlight success areas but also implement improvements.

Visibility is key to success in all wholesale and distribution industries, but it’s particularly important for the hydraulics and pneumatics suppliers. This is because the sector often has a lot of stock movements and added kitting and assembly processes make keeping track and control of stock increasingly complex.

There are many benefits of having complete visibility of your business that are key to increasing profits in the hydraulics and pneumatics sector. We’ve listed our top 3 that are proven business cases and the ultimate benefits for implementing an industry specific ERP system like OGL Software.

Clear & accurate product costing for better profit margins

It’s not an easy task to set your cost price and then your selling price if you’re not clear on how much it costs to actually make your product. Often this is done manually by businesses without a sophisticated ERP system, which leads to a lot of estimating and guessing based on old data but, with an ERP that connects your financing, purchasing and stock management together, this process can be based on facts and accurate data.

OGL Software has a Works Order Processing and Hose Assembly module which enables you to consider and auto-calculate a variety of cost variables so you can better calculate your cost pricing to ensure your selling at a profit. Add labour charges to your Bills of Materials and set up the associated costs of components in a kit so you can be sure your forecasts are accurate - key to maximising your profits.

Tighter stock control to reduce overhead costs

It’s important to correctly mark your cost pricing and profit margins to help with your bottom-line, but it’s also important to have visibility of the movement of your stock to reduce overhead costs. Can your business software tell you the location of all your stock, which products are earmarked for an order, what items you have purchased or when your stock is running low? Without the visibility of your stock movements it’s almost impossible to know if you’re utilising your warehouse space, over-stocking on under-performing products or if you need to purchase more stock, which has a significant effect on your overhead costs, hindering your ability to scale successfully.

Visibility of stock movements also has a huge effect on your customer service. Effectively controlling your inventory can ensure your order processing is quick and effective and your stock volumes are accurate, so you never have to let your customers down with out-of-stock items.

Improved company performance to increase sales

Control of your stock isn’t the only thing that will affect your profits, visibility of your company performance is a key factor to improving and driving your business forward.

One of the major benefits of an ERP system, is that the software can take the accurate data from all areas of the business and produce quality business intelligence on your performance, highlighting success points and areas for improvements. There are 2 ways this sales and company data can help your business increase sales; firstly, it can motivate and improve productivity for your sales staff and secondly, it’ll help you to improve your company reputation.

Motivating your sales staff speaks for itself in increasing sales but improving company reputation is usually overlooked as it’s often, not a quick win. Understanding the weaknesses and inefficiencies in your order processing can give you room to implement changes to improve the process, resulting in accurate, quick and effective order management which helps you to exceed your customers’ expectations. Having the visibility and data to improve performance and efficiencies in any areas of the company will have a knock-on effect on the quality of the customer service you can provide to help you receive quality feedback and reviews.

ERP Software for the hydraulics and pneumatics industry

The ERP market is vast and there isn’t a ‘one solution fits all’ system, but when choosing the software to drive your business forward, ensure you choose an ERP that’s suited for your industry and as hydraulic and pneumatic distributors, it’s key that the solution will give you complete visibility of your company.

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