The Best ERP for Distribution in 2024: Key Features & Tools for The Right Fit!
Web Development
The Best ERP for Distribution in 2024: Key Features & Tools for The Right Fit!
Dec 21, 2024
about 8 min read
Dive into our in-depth guide on the best ERP solution for distribution! Whether you’re looking to systemize operations or enhance customer satisfaction, we’ve got the insights you need to make the right choice.
As we delve into 2024, distributors are increasingly confronted with the intricate challenges of managing supply chains, inventory, and customer relationships. In this dynamic era, the best ERP for distribution emerges as a beacon of innovation.
In 2023, manufacturers and distributors that hired software consultants for ERP or business system implementation experienced an 85% success rate.
In this blog, we'll explore the top ERP systems for distributors, uncovering their key features and expert tips to help you make a better choice.
What Is ERP for Distribution?
Overview
ERP (Enterprise Resource Planning) for distribution refers to integrated software solutions, specifically designed to manage and optimize the various processes involved in the distribution industry.
And, remember that a powerful distribution ERP can streamline direct-to-consumer shipping (D2C), efficiently manage chargebacks, and accurately calculate customer allowances, royalties, and commissions, all of which significantly impact your bottom line.
If you're a player in the distribution game, you need a distribution ERP. Whether you're a wholesaler, a 3PL provider, or a food distributor, an ERP can be your secret weapon.
Why?
Wholesalers and Distributors: Juggling big-box retailers, independent stores, and direct-to-consumer shipping? An ERP can handle it all, from managing complex supply chains to fulfilling orders efficiently.
3PL (Third-party logistics) Providers: Powering ecommerce merchants means streamlining operations. An ERP can automate order fulfillment, reduce costs, and boost efficiency.
Food Distributors: Navigating the complex world of food distribution, with its unique challenges like temperature control, shelf life, and food safety regulations, requires a robust ERP solution.
💡Did you know?
According to Panorama Consulting, 8.7% of companies that use ERP systems are distributors and/or wholesalers.
Why Should Your Business Invest in ERP for Distribution?
For distributors, investing in the best ERP for distribution is not merely an option—it is a strategic necessity. Regardless of your company size, without an ERP, your distribution system is able to confront:
- Poor inventory visibility across multiple warehouse
- Inaccurate production scheduling and demand forecasting
- Order errors due to over-dependence on manual process
Unlike generic software solutions, industry-specific ERPs are meticulously crafted to address the unique challenges faced by importers and distributors. So, what makes the best ERP for distribution & wholesale?
Here are 7 top-of-mind features that cover every facet of a distribution business:
Warehouse management
- Customize and optimize your warehouse layout to minimize picking times and maximize storage space utilization.
- Utilize barcode scanning for faster and more accurate order fulfillment.
- Integrate with a WMS to automate processes, enhance visibility, and control multiple warehouses effectively.
Real-time inventory management
- Regularly perform cycle counts to manage inventory changes, ensuring accuracy and consistency.
- Leverage historical sales data and customer insights to predict future demand, streamline reordering, and avoid stockouts.
- Categorize inventory to optimize purchasing strategies and enhance overall distribution efficiency.
Sales & order management
- Create precise client quotations with product pricing, shipping costs, and lead times.
- Enable users to set credit limits, monitor client accounts, and assess creditworthiness effortlessly.
- Gain real-time insights into inventory levels to manage backorders efficiently and minimize delays
- Automating the order processing workflow, significantly reducing manual data entry errors and expediting delivery times.
Customer relationship management
- Leverage customer data to identify high-value clients and tailor sales strategies.
- Automate contract creation, renewals, and price adjustments.
- Implement personalized promotions and rebates to drive sales.
- Assign accounts, track performance, and foster collaboration.
- Self-service customer portal with tools to track orders, view invoices, and submit inquiries.
📑 As ABI Research Principal Analyst Michael Larner put it, “Supply chain orchestration requires software to be more than a system of record and provide risk analysis and run simulations, enabling manufacturers to understand and prepare for supply chain shocks.”
Through supplier management, drop-shipment tracking, and logistics optimization:
- Monitor supplier performance, automate purchase orders, and streamline communication.
- Keep stakeholders informed with real-time updates on shipment locations and estimated arrival times
- Utilize drop-shipping functionality to ship products directly from warehouses to customers
- Navigate international trading terms, facilitating smooth overseas shipments and compliance with global regulations.
- Extensive reporting capabilities, these insights guide strategic budgeting and informed decision-making.
- Keep a vigilant eye on operating costs to identify improvement opportunities.
- Tailor discount structures and rebate programs for distributors based on volume and contracts.
💡McKinsey Global Institute found that improving forecast accuracy by just 10-20% can yield significant benefits, including a 5% decrease in inventory costs and a 2-3% revenue uplift.
Integration capabilities
ERP software can integrates with various distribution systems, including:
- Transportation Management System (TMS)
- Business Intelligence Tools
- B2B E-Commerce Platforms
6 Top-rated ERP Software for Distribution
Here are 6 out of the best ERP for distribution that your business should consider:
1. Oracle Cloud ERP
Oracle Cloud ERP is purpose-built for global distribution enterprises, excelling in managing substantial transaction volumes. This solution is particularly well-suited for businesses that heavily depend on order management systems (OMS), warehouse management systems (WMS), or transportation management systems (TMS).
Pros:
Expert Support: Leverage the expertise of experienced consultants to implement and customize the solution.
Systematic Operations: Benefit from the integration of WMS and TMS features for efficient order fulfillment and delivery.
Best-fit for Bigcorps: Designed to handle the demanding workloads of large-scale distribution businesses.
Cons:
Customization Complexity: While customizable, it may require technical expertise for extensive modifications.
Support Challenges: Some users report inconsistencies in customer support responsiveness.
2. NetSuite
NetSuite stands out as an ideal choice for small to mid-sized distributors and global enterprises alike. Its robust capabilities make it particularly well-suited for consumer-oriented business models, including e-commerce and retail. As such, NetSuite is especially attractive to distributors pursuing B2C strategies.
Pros
Global Capabilities: Support operations in over 100 countries, accommodating localization requirements and facilitating seamless intercompany transactions.
Extensive Multi-Channel Integration: Integrating multiple sales channels, going beyond traditional methods to connect effortlessly with third-party logistics (3PL) providers.
Cons:
Learning Curve: May require a significant time investment to master.
Cost of Customization: Custom features can escalate costs quickly.
3. SAP Business One
SAP Business One is tailored for smaller distribution enterprises operating under a single legal entity and managing multiple warehouses. Aimed at optimizing early-stage distribution processes, it offers a 360 suite of modules that encompass warehouse management, sales and distribution, and inventory oversight.
Pros:
Advanced financial workflows and global traceability
Utilizes the HANA database and manages workloads similar to the S/4HANA ecosystem for optimal performance.
Vast Partner Ecosystem: Integrating seamlessly with Warehouse Management Systems (WMS) and shipping providers to enhance functionality.
Cons:
Limited Scalability: May not fully support larger enterprises as they grow.
Customization Limitations: Some users find customization options restrictive.
4. Microsoft Dynamics 365
Microsoft Dynamics 365 is an ideal choice for distributors with intricate supply chains and warehousing needs. It offers tailored solutions for industrial verticals, empowering businesses to optimize operations and drive growth.
Pros:
Global Support Network: It provides robust support across various regions, including Europe, Asia, and Africa, ensuring compatibility with products that may not typically function in these markets.
Comprehensive Features: Tailored for complex distribution operations, this solution provides replenishment techniques such as bin-level capabilities, license plate tracking, and warehouse-level transfers.
Cons:
Complex Configuration: Can be complex to configure and customize.
High Cost: The initial cost and ongoing maintenance fees can be high.
5. Acumatica Cloud ERP
Acumatica is celebrated for its user-friendly interface and flexible licensing, making it ideal for businesses of all sizes. It features robust modules for financial management, inventory control, and order management, while its adaptable pricing, including consumption-based options.
Pros:
Intuitive Interface: Easy navigation that reduces training time for users.
Versatile Pricing: A range of licensing options to fit diverse business needs.
Robust Financial and Inventory Management: Comprehensive tools that enhance operational efficiency.
Cons:
Fewer Third-Party Integrations: Limited integration options compared to some competitors.
Customization Challenges: Customizing the system can be complex and may require professional help.
6. Odoo ERP
Odoo stands out as an open-source ERP solution suitable for businesses of all sizes. Odoo delivers an impressive array of powerful inventory optimization features, including multi-warehouse management, bulk serialization, lot tracking, and both static and dynamic costing options.
Pros:
Strong Integration: Its modular architecture allows you to install specific modules (like accounting, CRM, sales, and procurement) to ensure a seamless data flow across your distribution ecosystem.
Scalable for Growth: You can add users or features without the need for a complete system overhaul.
Cons:
Steep Learning Curve: Can be complex to learn and use for non-technical users.
Limited Support Options: May require additional support and maintenance costs.
What Do Industry Experts Predict For The Future Of ERP In Distribution?
Industry experts foresee a future where ERP systems for distribution will become even more sophisticated and integrated. Let’s see how far ERP solutions can go for the distribution category!
Blockchain technology
Blockchain technology, once a niche concept, is poised to revolutionize ERP systems and supply chain management. It can be used to create "green ledgers" that track environmental data alongside financial metrics. By providing tamper-proof records and real-time tracking, blockchain can significantly enhance transparency and security.
Integration of AI/ML
AI and ML capabilities are becoming core components of ERP systems — not just add-ons. Manufacturers employing a just-in-time inventory strategy can benefit significantly from AI, specifically machine learning (ML). By optimizing supply delivery schedules and labor allocation, ML can help minimize inventory carrying costs and boost productivity, then predictive analysis.
Advanced business intelligence (BI) and analytics are rapidly becoming the future of ERP systems for distribution for the power of data. Advanced BI tools can extract invaluable insights that drive strategic decision-making, and up-to-minute reporting.
Final thoughts
Choosing the best ERP for your distribution business is a critical decision that can significantly impact your operations and bottom line. Remember to consider factors like your business size, industry, budget, and future growth plans when selecting an ERP system. It's also crucial to involve key stakeholders in the decision-making process to ensure a smooth implementation and adoption.
If you are a distribution-based business that encounters inventory management, Golden Owl Solutions is here! We specialize in IT outsourcing software solutions and Odoo ERP is one of our trusted services. Contact us for more consultations in:
1. How long does it take to implement an ERP system in a distribution company?
Implementation timelines can vary depending on the complexity of the system and the size of the organization. On average, ERP implementation can take anywhere from a few months to over a year.
2. What role does data analytics play in ERP for distribution?
Data analytics in ERP systems provides valuable insights into business performance, helping distributors make informed decisions based on real-time data, optimize inventory management, and forecast demand effectively.
3. Can ERP systems integrate with existing software solutions?
Yes, most modern ERP systems are designed to integrate with various existing software solutions, such as CRM systems, e-commerce platforms, and supply chain management tools.
