How to choose the right ERP Software for your distribution business?
Tips to choose the right ERP for distributors
Your distributors have to take care of multiple functions, right from taking care of finances, tracking sales, monitoring movement, inventory management, and surpluses or lacking. Most of the time, they have their capital invested in the supply chains which has to be taken care of. When so much is at stake, how can a distributor afford to make any mistake or delay? Here ERP or Enterprise Resource Planning Solution comes into the picture. The distributor has to deploy an ERP solution that matches his needs, functions accurately; and it is affordable, and sustainable too.
Medium-sized distributing businesses usually have smaller profit margins and higher per inventory costs. They have to walk a tight role and they can not afford fluctuations in their stocks. Plus, these distributors are more exposed to the market uncertainties as compared to the bigger competitors.
In the case of big-sized distributors, ERP solutions are a way to earn more revenue and a solution to the troubled areas. Large distributors update ERP solutions to stay in the market and stay ahead of their competitors.
No matter what the operation size of the distributor is, every distributor has to select the right ERP solution for the business. Simply going through the specifications of the ERP will not give distributors the right idea of the capacity of the solution. Here, we will take a look at the features to look for in the ERP solution and the tips to follow.
Features that your Distribution ERP must have
ERP is used to manage and track all the core areas of supply chain management, accounting, services, manufacturing, and more. The present-day market is not what it used to be a decade ago. So if as a distributor you are using the same decade-old method to take care of the business, you are surely going to lag. However, choosing the right ERP matters as your ROI and business function is going to depend on the kind of solution you reply to.
Here are a few must-have ERP software features that are crucial to your distribution business:
Finance management.
Go with an ERP software that provides you with a complete idea of what is happening financially at the inventory and operational level. Your ERP must support tax laws, currencies you deal in, and automate cost calculations, along with the following functions:
- Analyzing the profitability of any activity or inventory
- Asset management
- Accounts payable & receivable
- Cost-to-carry optimization
- Budget forecasting and financial reporting
- Debts management
- HR
- Payroll & taxation, etc.
Managing Sales Order
Sales order management is an important feature that every modern-day ERP system must-have. This feature allows for automatic order processing. This feature extracts all the related data from other software and tools that are installed in your business such as Point of Sale. Sales order management should perform the following activities:
- Processing is a sales order.
- Inquiry of sales order
- Promising sales order
- Reporting of the order
- Shipping of the sales order and inventory return management
- Consumer pricing
Customer Management
If your Customer Management Software is connected to your ERP system then you stand higher chances of getting benefited from this integration. This will help in getting meaningful insights into the customer purchasing behavior, and distributors can connect with the customers (deal with them) accordingly. Integrating ERP and CRM can help in:
- Better contact management
- Inquiry handling
- Managing promotions and discounts, etc.
Inventory Management
The competition in the market is so tight and high that every product has at least one substitute available in the market. Instead of varied consumer demands across the market every consumer believes and expects that their item would always be in the stock. This creates a challenging situation for distributors. Installing ERP is helpful if it can help you in having real-time inventory insights and can accurately predict inventory to match a customer’s demand. ERP must help you with the following for effective inventory management:
- Multiple warehousing
- Inventory costs
- Inventory availability
- Requirement planning
- Inventory replenishment
- Demand forecasting, etc.
Managing Warehouse
Meeting total orders and order processing are the core functions of warehouse management activity. This means the distributor has to have an accurate inventorying. ERP helps in automating crucial warehouse management functions like order picking, order packing & shipping, and put away. The ERP must offer you the following features to support the warehouse management process:
- Multiple warehousing
- Slotting & Picking optimization
- Demand correlation
- Shipping management
- Outbound processing
- Waving and loading
- Container packing, etc.
E-commerce
Distributors indulged in B2B business activities with the help of eCommerce software that helps them to connect with suppliers, manufacturers, and wholesalers. If you get error-free, real-time ERP information into your e-commerce system, it will help in a positive customer experience. ERP must support and share:
- Product data
- Price list
- User group
- Customer data, etc.
How to choose the right ERP solution?
The market is full of vendors providing ERP solutions with similar functions. This might be confusing for the first time ERP user. Here are some tips that distributors can follow to shortlist the most suitable ERP for your distribution business :
Make a list of all the expectations you have from ERP you install in the business. What changes you want the ERP to make in your business operations.
To make sure the deficiency level and ROI of the ERP are high, under your business workflow, talk to the business associates, partners, suppliers, vendors, etc to understand the distribution needs your ERP will have to meet.
Let your team connect with the ERP vendor and check if the features are enough.
Ask for a demo, and also understand the vendor’s after-sales service.
Find out the resources that may be required to implement the ERP. See if the solution deployment demands any specific training or infrastructure.
If possible, talk with the other market players who have installed the ERP system and understand what changes they have witnessed in the business. Any suggestions they can give.
No matter which ERP system you install and what the size of your business is, make sure you choose only that solution that fulfills your expectations. Don’t go by the trend, choose the one that suits you the best in the present and future.
