Distribution ERP software manages logistics operations as well as front- and back-office activities of wholesale and distribution companies. This type of software is used to determine product demand and ensure that products sold are delivered on time. Distribution ERP is used mostly by departments in charge of inventory, warehousing, and logistics. Since distributors sometimes combine products before selling them, most distribution ERP software offer features for assembly and kitting. Most distribution ERP solutions also provide modules for accounting, sales, and purchasing, and sometimes human resources.
Enterprise Resource Planning (ERP) systems are business management platforms that businesses, manufacturers, and distributors use to collect, store, manage, and communicate data across all functions of the enterprise. By integrating information from all areas of a business (including product planning, development, HR, manufacturing processes, sales and marketing and more into one complete enterprise system, ERP systems allow data to be shared across departments in real-time in order to streamline processes and automate common tasks.
What is Distribution ERP Software?
ERP software represents a bold new vision for distribution and how distribution companies operate. If you look at Manufacturing and Distribution business processes from a macro-level, they seem undeniably similar. The order to cash process, identification of potential customers and management of the supply chain are very much alike. However, when you start to peel back the layers, order quantity and order volume is where they differ. Small manufacturers typically deal with small orders; small distributors deal with large orders and generally have a greater volume of orders to manage.
Distributors place bulk orders with the manufacturer and then sell far smaller quantities to either retail stores or end-user customers. Distributors handle the logistics and marketing requirements that manufacturers don’t want to or aren’t able to handle in house. Since the two verticals work in different areas of the supply chain, their technology must conform to different needs.
Distribution ERP tools are typically built with (or combined with) business intelligence and Customer Relationship Management (CRM) capabilities that provide valuable insight into customers’ buying habits. Distributors technically need more tools as they provide end-to-end solutions. Features such as fleet management, inventory management, marketing and shipping are all necessary for a successful distributor to run their business, but are not necessarily important to a manufacturer.
Benefits of distribution ERP
- Eliminate Data Redundancy and Errors: Data repetition and errors are a common sight when you use different software to deal with such data. With an ERP integrated to your distribution business, you can get rid of such inefficiencies and manage your business better by having complete visibility of all your procedures and operations.
- Increased Revenue Growth: Since an ERP is integrated with your business, most of your sales and revenue data are readily available and are updated in real-time. With this information, you can get a deep understanding of business revenue. You will be in a better position to identify and manage cost variances. You will also be able to allocate financial, human, and operational resources better. This will eventually lead to rewarding outcomes such as an upward revenue growth, business expansions, better-paid employees, etc
- Improved Inventory Management: An ERP system can save you precious time and money by eliminating the daunting task of manually process inventory management. Automated inventory management capabilities can improve your management processes by allowing end users to track and manage data across multiple warehouses – giving you real-time visibility to current inventory in transit and costs.
1. Be able to improve customer satisfaction and cut costs at the same time
A modern ERP suite allows you to be efficient in the management of distribution processes. You get real time visibility into available inventory and inventory costs, inventory in transit and reorder quantities. This visibility translates into low operating costs and clear, productive communications with customers. You can cut down on misunderstandings and delays that negatively affect customer satisfaction.
2. Reduce order times
Automated sales order processing, which is available in ERP solutions, eliminates delays in order fulfillment and shipping. The suite usually also enables you to set up rules to handle credit, returns, drop shipments and so forth across multiple warehouses.
3. Run an efficient warehouse
The more efficiently your warehouse(s) run, the more profitable your distribution business will be. A Warehouse Management System (WMS), which comes with many modern ERP suites, lets you streamline your distribution processes. The system covers workflows across receiving and inventory management as well as the operation of tools like barcode scanners and mobile devices.
4. Stay on top of your supply chain
ERP enables you to ensure a steady supply of goods to distribute. It accomplishes this by automating and optimizing purchasing processes, purchase order management and supply chain management.
5. Know your true costs
A modern ERP suite gives you the ability to determine profitability by warehouse as well as by product line or business unit. Reporting and data visualization tools help you spot cost overages and other drags on profitability that may elude standard financial reports.