ERP Systems

ERP Distribution System

ERP, which stands for Enterprise Resource Planning, is a software application designed to organize a company's business activities around one, central information system. Businesses in virtually any industry will reap advantages from the implementation of such software. So, while specialized companies operating in wholesale distribution environments are able to benefit from ERP software solutions, they definitely need more. In fact, these types of companies are finding it beneficial to implement software that fits a different set of operational strategies.  They require ERP software that is also capable of handling complex distribution channels.  Basically, they require a robust ERP Distribution System.

Distributors already know that, in these economic times, a powerful distribution system is necessary to their company if they want to remain competitive, which is why distribution requirements are going to be central to any ERP software purchase made by distributors. Consequently, distributors searching for ERP software look for comprehensive solutions that offer high inventory turnover, robust purchasing, efficient import management, and an undeniable focus on customer relationship management.

Distribution businesses differ from manufacturing businesses in a few ways so businesses in this industry prefer some added functionality to the traditional ERP software package. A survey of experts revealed that thirty-six percent of distribution companies believe a strong Supply Chain Management capability is the major difference between traditional ERP and an ERP Distribution System while thirty-two percent believe that Distribution Requirements Planning (DRP) to Support Multiple Distribution Centers and Warehouses is the critical difference.

Instead of requiring capabilities around production planning and product configuration, distribution companies are more affected by software functionality that focuses on maintaining optimal inventory levels and facilitating a fast movement of products. That is why a good ERP Distribution System provides strong supply chain management capabilities that can manage advanced planning, merchandise importing, and distribution requirements planning for centralized purchasing environments, as well as multi-warehouse distribution channels.

For a distribution company, visibility to vendor purchases as well as product costs for different vendors becomes very important. These businesses have more of their finances involved in finished goods than manufacturers making procurements increasingly important. Planning and forecast is another tool that impacts distributors greatly due to their higher level of finished goods inventory. The import of business sales gives emphasis to the need for open communication with customers. Integrated and automated communication of areas such as EDI, advance ship notification, and order status updates should, therefore, be carefully considered.

Written by :

Amy Cruz