Top 5 Distribution ERP Software: Key Features & Tips To Select
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Marcie Nguyen
Marcie is a skilled writer at Havi Technology focusing on creating content for marketing, eCommerce, point of sales, and ERP solutions. With over 8 years of experience in the retail, eCommerce and ERP technology sectors, Marcie is dedicated to providing insightful answers to business owners of all scales.
Selecting distribution ERP software is not a simple task. Like any other industry, the distribution model can grow to a complex structure. While some ERP systems are designed with enterprise-level distribution operations in mind, others are flexible enough to support startups.
Then how do you identify the perfect fit for your unique needs? Find out the core features of ERP for distribution businesses and see our top 5 recommendations to navigate the selection process.
What Is A Distribution ERP System?
Firstly, an Enterprise Resource Planning (ERP) system is packed with a suite of apps that are designed to automate various business processes from sales and marketing to inventory and warehouse control.
The distribution ERP software is developed based on the core ERP system, with specific apps and features for wholesale distribution and those involved in the supply chain. The system integrates and streamlines distribution operations, including inventory control, order fulfilment, logistics, finance, and CRM. This integrated environment provides a centralised data hub with real-time visibility across the distribution network, enabling distributors to respond to changing market demands quickly.
Why companies are investing in distribution ERP software
Numerous wholesale distributors deal with typical challenges that limit their potential for development and profitability. Distribution ERP software addresses these particular pain points:
Distribution challenges
How wholesale distribution ERP solves it
Limited ability to view inventory across multiple warehouses
The system centralises all warehouses and gives access to real-time inventory data. This lets users quickly respond to warehouse transfers, order fulfilment, potential shortages or excess, and stocking levels. ERP deployment lowers inventory costs by an average of 11% (Aberdeen Group)
False production scheduling and demand forecasting
The system provides robust forecasting tools for better planning and fewer stockouts based on historical sales data, patterns, and customer insights. McKinsey Global Institute reported that 10–20% higher forecast accuracy could result in 5% lower inventory costs and a 2-3% rise in revenue.
Struggle to control sales incentives, contract prices, and promotions
The system automates the management of commissions, price policies, and promotions. It streamlines the sales operations and maintains a consistent application across every sales channel.
Order errors due to manual operations
The system automates the order entry, fulfilment, and billing - the complete order-to-cash cycle. It eliminates the need for human data entry, improves order fulfilment, and accelerates delivery times.
Difficulty in identifying profitable and unprofitable customers/products
The system provides powerful business intelligence and analytics features that help analyse customer and product profitability and spot important patterns. It assists distributors in optimising the product mix and customer connections and making data-driven choices.
Stockouts and disruptions in the supply chain
The system increases the visibility of the supply chain network by integrating with suppliers, logistics companies, and others, with real-time tracking. This makes it easier for distributors to communicate with suppliers and improves inventory control to prevent shortages and potential disruptions.
Complex supplier network
The system offers collaboration features, performance tracking, electronic data interchange (EDI), contract storage, and other functions. This enhances vendor performance tracking, automates purchase orders, and enhances communication practices.
Staying competitive in pricing
The system provides features like cost evaluation and pricing optimisation. It allows distribution companies to estimate costs accurately, assess market pricing, and modify pricing strategies to balance profitability and competitiveness.
7 Must-Have Features Of ERP For Distribution Businesses
6A robust distribution ERP software must provide at least the following 7 core features to cover every facet of a distribution business:
1. Inventory Management: One of the most important features of distribution ERP software is enabling users to get real-time access to every item in their warehouses' inventory. It often goes with capabilities like cycle counting and inventory control, demand forecasting and replenishment, and ABC or VED analysis (stock classification):
2. Sales and Order Management: An ERP for wholesale distributors helps streamline the sales cycle and boost order fulfilment efficiency with features like order process automation, customer quote management, and backorder control:
3. Supply Chain Management: These features of distribution ERP software help improve collaboration and transparency in the supply chain, such as supplier management, drop-shipment tracking, and logistics optimisation:
4. Financial Management: Distribution ERP software simplifies the process of finance management and helps users get real-time data. Typical features are accounts payable & receivable automation, landed cost management, and cost management:
5. Warehouse Management: Distribution ERPs include features like warehouse slotting and put-away optimisation, barcode scanning, and warehouse management system (WMS) to improve fulfilment accuracy and streamline warehouse operations:
6. Customer Relationship Management: Wholesale distribution ERPs enable users to develop a tailored relationship with their customers with features like distributor management, contract management, targeted promotions, self-service customer portal, and more:
7. Integration capabilities: The distribution ERP software can be integrated with other distribution systems such as:
5 Top-Recommended Distribution ERP Software
1. Microsoft Dynamics 365
Microsoft Dynamics 365 stands out as a powerful solution for organisations with highly intricate distribution operations. This can be a great tool for distributors with supply chain networks and warehousing, or those requiring add-ons for industrial verticals.
The best parts:
2. Odoo
With more than 12 million users, Odoo is an open-source ERP that works with companies of all sizes, which makes it an appealing option for wholesale distributors looking for cost-effective and adaptable software. It offers a wide range of robust inventory optimisation features, such as multi-warehouse management, bulk serialisation and lot tracking, static and dynamic costing, replenishment flexibility, and more.
The best parts:
3. Oracle Cloud ERP
Oracle Cloud ERP is designed specifically for global distribution enterprises as it is excellent at handling high volumes of transactions. The system is ideal for businesses that mostly rely on order management systems (OMS), warehouse management systems (WMS) or transportation management systems (TMS).
The best parts:
4. SAP Business One
SAP Business One is designed for smaller distribution businesses with a single legal entity and several warehouses. With the goal of streamlining early distribution operations, it provides a comprehensive set of modules that cover warehouse management, sales and distribution, and inventory management.
The best parts:
5. NetSuite
NetSuite is best for SMB distributors and global businesses. This is a perfect solution for consumerised product-focused business models such as e-commerce and retail. NetSuite will be most appealing to distributors with B2C strategies overall.
The best parts:
The Next Step: Assessing ERP Systems
Distribution businesses have specific requirements for network architectures and planning calendars. Without distribution ERP software, employees might resort to using spreadsheets or standalone plugins, which could impede business scalability. If the complexity takes over, consider setting up a meeting with our ERP experts to navigate the selection process.
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