ERP for Distributors: How to Choose the Best One


Wholesalers and distributors played an integral part in product distribution throughout history. As technology and customer expectations have increased incredibly, distribution firms face many challenges and opportunities. Having the right tools to plan, manufacture, transport, and deliver the products customers need at the right time. Distribution includes purchasing items from OMEs and their suppliers and then distributing them to retailers or end-consumers.

If each distribution sub-process is manually managed using multiple systems, it won't be easy to monitor and analyze. An ERP solution can automate the end-to-end operations of a distribution company. This eliminates human-related errors and reduces manual labor. Enterprise Resource Planning (ERP), a business management software that distributors can use for data collection, storage, management, and transmission across departments, is called Enterprise Resource Planning. ERP systems enable data exchange across departments in real-time to streamline routine tasks and automate repetitive activities.

What's the Difference Between Distribution and Manufacturing?

From a macro-level perspective, manufacturing and distribution operations share many business processes. Identifying potential customers, order-to-cash procedures, and supply chain management all share many similarities. On closer inspection, you will see that order quantity and volume diverge. Distributors buy bulk quantities from manufacturers and then sell smaller amounts to end-users or retail outlets. Distributors handle the marketing and logistics needs rather than manufacturers. Thus, the distribution and manufacturing industries have different technology requirements because they operate in separate areas of the supply chain.

These are Some of the Unique Challenges Distributors Face:

  1. Collaboration with suppliers and customers

  2. Traceability management of merchandise

  3. Multiple divisions handling different product ranges

  4. Reducing inventory replenishment errors

  5. An analysis of sales and optimal pricing

  6. Transport management

  7. Management of Supplier Contributions and Advertisements

  8. Plan your procurement

  9. Tracking of Free Cost (FOC), Products

  10. Monitoring advertising and promotion expenses

  11. Multi-location inventory control

  12. Place an Order

  13. Management of chargebacks, returned merchandise, and multiple currencies

  14. Request and approval for Managing Bank Guarantee and LC Life Cycle

  15. Forward Contract Management

  16. Receiptable collection

  17. Asset Management

  18. Minimizing costs

Distribution ERP Software:

A distribution ERP tool integrates business intelligence and customer relationship management (CRM) functions. It offers seamless management of logistics processes such as order management, logistics, finance, fleet management, and warehouse management. It provides valuable insights into their customers' purchasing habits.

Why do you need ERP distribution software?

Distribution companies have many divisions. Errors in their workflows could lead to irrecoverable loss. ERP for distribution firms provides real-time data that gives an in-depth view of trends and operations within the company. This allows companies to identify and resolve business problems quickly.

Also Read : Best Distributor ERP Software

What Features Should Distributors Look For in an ERP System?

Distributors start to look for new business management solutions like ERP because their current system is not up-to-date in critical operations capabilities. Suppose your company is having difficulties with its warehouse operations or fulfillment processes. In that case, it's a sign that an ERP investment might be worthwhile. Consider ERP investments if your company experiences rapid product growth, and your current systems cannot scale up.

The sales team is another indicator. An ERP system can automate these business processes and speed up sales if your sales team cannot create price quotes or manage reorders.

You can avoid costly mistakes in the future by choosing an ERP that meets all your needs. This is a list of the ERP software features that will help you in your ERP business goals.

Sales Order Management

Modern ERP systems are designed for distributors and use sales order management features to automate order processing and sales analysis and management. This is accomplished by pulling customer data from omnichannel order tools like POS software. A proper ERP for distribution companies should include the following functions:

  • Processing of sales orders

  • Promising sales orders

  • Inquiry about sales orders

  • Sales order reporting

  • Shipping Management

  • Management of returns

  • Document management

  • Self-service for vendor

  • Self-service for customers (e.g., a customer portal).

  • Pricing for customers

Financial Management

An ERP should show you the financial picture of each item and customer. Many financial planning tools can be included in accounting components. Your ERP platform must support taxes, currencies, payments, and cost calculators that apply to your area or sphere.

  • Analyze of profitability

  • Optimizing cost-to-carry

  • Asset management

  • Accounts payable

  • Receivables

  • Budget forecasting

  • Invoicing and order billing

  • Financial reporting

  • Management of debts

  • Human capital management

  • Payroll Management

  • Management of taxes

Warehouse Management

ERP and warehouse management software manage order fulfillment and processing. This allows for better inventory information. This automates picking, packing, shipping, and putting away. These warehouse management features are available in ERPs.

  • Slotting optimization

  • Procedures for picking

  • Demand correlation

  • Pick-to-light optimization

  • Shipping Management

  • Kitting functions

  • Tag functions (barcodes, RFID)

  • Outbound processing

  • Planning for wave and load

  • Packing containers

  • Multiple warehouses

  • Off-site equipment

Customer Relationship management

Distributors can benefit from syncing customer, contact, account, and account identifiers to the ERP. This data can be a key factor in customer satisfaction if used correctly. With CRM features such as:

  • Contact management

  • Management of inquiries

  • Estimates and quotes

  • Management of promotions

  • Sales force management

  • Analytics on Opportunity

Inventory Management

Customers expect items to be in stock. However, inventory is constantly changing, and there are potential risks of overstock. Distributors should have access to real-time stock information and the ability to predict inventory levels to meet demand. Distributors may be interested in the following functions:

  • Inventory control and availability

  • Inventory costs

  • Forecasting the demand

  • Inventory tracking and replenishment

  • Requirement planning

  • Multiple warehouses

Procurement Management

To keep their wholesale business running smoothly, distributors need ERPs that can handle all aspects of procurement. These systems manage orders from third parties, schedule recurring purchases, and drop shipments.

  • Bid management

  • Orders

  • Management of purchases

  • Multiple Shipments

  • Procurement planning

  • Supplier relationship management

  • Planning the supply chain

eCommerce for Distributors

B2B eCommerce is where distributors use specialized software called eCommerce to connect with vendors, manufacturers, and wholesalers. You will need the product, pricing, customer, and order data, whether selling medical supplies online or operating an electronic eCommerce platform.

A better customer experience is possible by integrating real-time ERP data into your cloud-based eCommerce platform. Integrate via API with an eCommerce website to distributors. You should consider the following options for synchronization:

  • Description and product data

  • Prices and data for user groups

  • Customer-related data

  • Data concerning order fulfillment and packaging

  • Inventory and invoice data

  • Delivery and return information

Once you have decided what features are most important, you can start digging deeper. You can help your vendor by preparing an RFP (request to a proposal). It depends on your needs, expectations, skills, and your company's specific pain points.

The RFP should contain the project scope, budgets, and vendor qualifications. It also must include the award process. Multi-channel eCommerce or marketplace management is what you need to be targeting as you explore your requirements.

What are the Most Important Features of ERP Distribution Software?

A distributor must have an in-depth understanding of every aspect of the business. Distributors must also consider the costs associated with selling, transporting, storing, and ordering stock. These elements must be kept at an optimal or minimal level to achieve success. A comprehensive distribution ERP system will help you to have a clear view of stock, streamline operations, manage operational expenses, and ensure complete inventory management.

Distributors need an ERP to track inventory transactions, minimize inventory management expenses, increase stock turnover, decrease stock storage, centralize purchasing, and more. These basic components are necessary for a system to address distributors' specific challenges in their day-to-day operations.

Effective supplier management -

Distributors can communicate in real-time with all stakeholders, including third-party shipping companies and external partners. Large distributors that handle large volumes and multiple sites will find the supplier management feature most helpful.

Order Management -

Poor order management is a common problem for distributors. Distributors must ensure that all orders placed through eCommerce sites are collected and kept in one catalog. This allows for a quick inspection. The best order management technology allows wholesale distribution businesses to implement processes and monitor orders, making it easier to prepare bids or proposals and track their progress.

An Efficient Inventory Management System -

Distributing distribution companies should integrate warehouse management systems into ERPs to manage all inventory operations. It should give managers access to detailed inventory data and a complete view of all asset activities.

Logistics Management -

Distributor ERPs must-have features that support transportation and logistics management. Logistics management solutions allow them to optimize freight and container planning and reduce costs.

Integrated HCM and CRM Account Management Tools -

An ERP suite provides full visibility into back-office processes when integrated with financial, human resource, accounts management, and customer relationship management. This increases staff engagement and improves customer service management capabilities.

Business Intelligence and Analytics -

Advanced analysis and reporting will be a benefit to distribution companies. This transforms unorganized data into useful statistics. An ERP software that integrates analytics can provide actionable insights, allowing companies to see more information about shipments, orders, and stocks. This will allow them to make better business operations decisions and control costs.

Integration functionality -

Potential distribution systems must be able to connect easily with existing platforms. Some vendors also offer API support that distributors could use to create custom integrations with third-party apps.

Arion ERP can help -

Arion ERP is a B2B eCommerce platform that streamlines B2B sales through integrations that connect your online store to data in your ERP. These connectors and others in the Arion ERP extensions shop help to keep customer, product, or inventory changes reflected across all channels.

Arion ERP is flexible and robust, making it easy to integrate with any industry-specific or general ERP research system. Arion ERP integrates with Arion ERP CRM right out of the box. Wholesale distributor ERP can access customer information, transactions, and activities.

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Top ERP for Distributors

Distributors have networks that impact every aspect of business growth. There are many things to keep track of, optimize, and manage. The right ERP should meet your needs in terms of features and capabilities, reflect your business philosophy, and communicate with you.

Finding an ERP partner who understands your business functions and shares your long-term vision is important. You'll have a better chance of finding the right ERP partner and will be able to implement your plan more smoothly. This will allow you to grow your distribution business process profitably.

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