Distribution companies must address the challenges of warehouse, inventory, logistics, supply chain and much more. Organizations in this sector act as a value chain through which a good or service passes until it reaches the end consumer.
Other item to consider are the steps that must be taken within the channel. Long and complex distribution channels have the potential to impact sales volumes for the product manufacturer. Recent advances in distribution ERP technology and computational power have made it possible for distributors to run through extremely complex channels and supply chains with high efficiency in a reasonable amount of time and with a reasonable amount of resources.
After a thorough evaluation, we direct our clients to seek out distribution ERP solutions that address the specific needs of centralized purchasing environments, as well as multi-warehouse distribution channels.
The main value of enterprise software for distributors is in the areas of supply chain, forecasting and supplier management. Pricing is a major requirement for the industry, and companies should look for software that can help optimize profit margins by establishing unique pricing for each customer, running promotional pricing, and managing rebate offers.
Order processing should provide the ability for users to up-sell and cross-sell. Additionally, eCommerce solutions, integrated into a distribution ERP system, have become a major value-added offering for distribution companies, connecting the ERP database to a web store to offer customers real-time inventory and pricing.
Critical Requirements of a Distribution ERP Solution
For a universal and complex industry like distribution, it is likely that a supply chain will run into disruptions at least once annually, with a substantial cost tied to that disruption. Therefore, distribution companies should ask enterprise software vendors about analytical capabilities and data-driven reports that are predictive and can help avoid or at least mitigate a disruption, and minimize the financial consequences.
If more than 10% of your business requires a multiple-level bill of materials (BOM), then you may want to look at an ERP system that has both manufacturing ERP and distribution capabilities.
Additionally, as supply chains grow and cross borders, ERP software must be able to manage the financial and operational requirements that come with additional countries and currencies.
Distribution companies should evaluate the following critical requirements for a distribution ERP system:
- Internet Portals – eCommerce, Shopping Carts
- Customer Relationship Management (CRM Software)
- Quoting and Estimating
- Order Processing & Available-to-Promise (ATP)
- Warehouse Management Software
- Kitting and Kit Management
- Distribution Requirements Planning (DRP Software)
- Forecasting and Demand Planning
- Supply Chain Management Software
- Quality (Receiving)
- Landed Costs
- Vendor Portals
- Multiple Currencies