ERP Software

ERP Distribution

ERP stands for enterprise resource planning. It is a software solution that logically evolved from the design of Materials Requirements Planning and Materials Requirements Planning II. ERP is a more complete, integrated information system that serves all departments within an enterprise rather than limiting itself to the manufacturing supply chain process like MRP and MRPII did.

The term ERP implies the use of modules of packaged software rather than proprietary software written for one customer. One of the major modules included in ERP is ERP distribution. Distribution is a procedure whereby products are sold to retailers, who will then make the final sale to consumers. Often, distribution is conducted by a branch of the same company where the goods were manufactured. Private distributors, who do no manufacturing, also exist.  These businesses must be in tune with the markets of both the products available for distribution and the places where they will ultimately be bought for consumption.

Distributors are faced with constantly having to find new sources of revenue in order to raise their value. They must find the tight balance between customer demand and profit. Without the ability to respond rapidly to changing opportunities, distributors will find it impossible to maintain revenue growth.  This has proven particularly so in today’s increasingly global market.

There are certain tasks that all distributors perform. For ERP to prove valuable to a distributor, the ERP Distribution software solution must include core business processes, such as: planning, sourcing, buying, shipping, and selling. Therefore, retail distributors, wholesale distributors, and specialty distributors all need these core processes because they are all involved in moving products closer to the consumer.

The specifics of the software systems that are used for the distribution of different products, however, are not the same. Each industry involved in the distribution cycle has functional requirements that are specific to the products being moved; for example, food distributors must satisfy product-specific date requirements; automobile parts distributors must have ERP software that enables a unique part to be identified by the combination of the make, model, and year attributes; health care products distributors need ERP software that offers unique serial number tracking of individual shipping entities throughout the supply chain;  industrial distributors need ERP that will manage inventory in a way that tracks, maintains, and timely replenishes a customer’s inventory; and wholesale distributors need software that create customer-specific EDI file formats for sales orders, purchase orders, order confirmations, invoices, and advance shipment notifications.

Written by :

Amy Cruz