Wholesale distributors have to deal with almost every major challenge of 21st-century business. From supply chain disruptions to navigating the eCommerce transition to integrating mobile apps and IoT, distributors bear the full brunt of the contemporary economy’s digital transformation. What’s more, these challenges can have an even greater impact on the many small distribution businesses trying to recover from the last several years of economic uncertainties. ERP for Wholesale-
Numerous challenges and increased competition means more room for a business to distinguish itself—but it needs the right tools first. That’s why enterprise resource planning (ERP) software has become an increasingly important part of how wholesalers navigate their business. However, to find the right distribution ERP solution, it’s essential to start with a solid understanding of ERP software and how it works in the wholesale distribution sector.
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What is Distribution ERP Software?
ERP software is a type of business software that combines customizable tools for many different business functions into a single integrated platform. Functionality varies from one ERP suite to another, and most systems offer at least some degree of customization. They commonly cover core business functions like accounting, supply chain management, purchasing, sales, and customer relationship management.
Distribution ERP software simply refers to an ERP suite designed and customized for the needs of the distribution and wholesale industry. That might mean it includes (among other things) more powerful features in logistics and inventory management modules, or more sophisticated options for managing operations over a large geographic area.
What Kind of Distribution ERP Software is Available?
Today’s software market offers an almost infinite variety of ERP solutions. Many people are familiar with the biggest names in the industry, such as Oracle’s NetSuite ERP, but so many options are now available that it makes sense to examine a wide array of choices.
These are some of the most critical factors that differentiate one ERP software package from another:
- Cloud vs. On-Premises: Historically, ERP systems were deployed on-premises using a business’s own server equipment. However, many of today’s ERP solutions use cloud-based software as a service architecture. Cloud ERP software can be a good fit for distribution businesses, which benefit from the flexibility and constantly-updated software.
- General vs. Industry Specific: Some ERP solutions are designed specifically for the needs of distribution businesses, while others are easy to adapt to a variety of applications, including manufacturing. Excellent options are available on both sides, but a distribution industry-specific solution, such as Epicor’s Prophet 21 will often require little customization out of the box.
- Size of Business: Various factors affect whether an ERP solution is better suited to smaller or larger organizations. Data input size limitations, multi-site and international capacity, and the maximum number of users supported are a few of the most potentially critical issues for distributors to determine if the system is sized correctly for their needs.
How Can ERP Software Help Wholesale Distributors?
Let’s examine some concrete ways in which ERP software can make a difference in a wholesale distributor’s operations and growth:
- Supply Chain Management: An ERP system offers critical visibility throughout your supply chain, from sourcing to inventory to logistics and beyond. This data is the bread and butter of the distribution industry. A well-implemented distribution ERP system makes it available in real-time to logistics managers and other stakeholders throughout the supply chain.
- Financial Management: Between bills of lading, contracts, invoices, and all the other necessary documentation, a distributor can quickly get buried in a flurry of paperwork. Distribution ERP software automates all of the most critical processes and consolidates them onto a single platform with robust tools for monitoring cash flow and processing payments.
- Customer Relationship Management: Strong relationships with suppliers and customers are the cornerstone of the distribution business, which is why almost all distribution ERP software includes CRM modules. Through an ERP system, a wholesaler can collect all of a customer’s invoices, RMAs, notes, and more in a single company-wide database, making it easy for employees to collaborate to grow and support strong customer relationships.
- Compliance Tracking: ERP software provides transparency and data integration crucial for maintaining compliance with ever-evolving regulatory standards. An ERP platform puts all relevant data at the fingertips of compliance staff and regulators, including critical features like batch tracking.
- Data Analytics: Distribution businesses need analytics tools suited to the new normal of the post-pandemic world, where increasing numbers of companies are moving beyond the just-in-time model. These seismic shifts in strategy will require analytics tools that are flexible enough to accommodate a wide variety of data sources.
What Should Distributors Look For in ERP Software?
Wholesalers need to look for features that are tailored to address the needs of the distribution industry. Fortunately, there are many ERP products available that do exactly that. These are some of the top characteristics that distribution businesses look for in their ERP software:
- Mobile Capability: Mobile tools like phones and tablets are an essential part of how the world works now, so an ERP system with mobile capabilities for these devices is a must for many businesses.
- IoT Integration: Distributors are increasingly using IoT devices in their operations, and many distributors now need a platform that can integrate data streams from these technologies into an actionable, unified whole.
- Modular Design: Many of today’s most popular distribution ERP systems use a modular design that allows businesses to add or remove modules to customize their systems further.
- Scalability: Scalable capacity for upgrading systems and adding users is essential for businesses that want to seize the shifting and unpredictable opportunities of the 21st century wholesale market.
- Integration API: A user-friendly API is an essential tool for integrating an ERP system with other software tools that a distributor may want to use, such as payroll or eCommerce systems.
- Training and Support: Employees need ongoing training and support resources to learn how to use ERP systems effectively and troubleshoot any problems.
For distribution businesses that aren’t currently using a unified ERP solution or feel that they’ve outgrown their current software, a significant first step is to find a distribution ERP comparison tool to see which systems to consider. Many offer free software demos from ERP manufacturers, providing invaluable hands-on experience. It’s critical not to rush the process, so distributors should take their time to collect the best product information available and to research multiple options.
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