Distribution Software: Where Does It Fit into the ERP Landscape?

Distribution Software: An ERP Asset
There are many, many distribution software packages on the market today – all delivering tremendous value to the companies who purchase and utilize them. No matter how big or small their operations may be, wholesalers, third-party or outsourced logistics service providers, and other types of distributors can benefit greatly from the implementation of a distribution software solution.

Some of these available distribution software systems are offered by smaller, specialty vendors who sell their solutions as stand-alone applications. These providers leverage their industry expertise, as well as the first hand experience and the “best practices” knowledge they’ve gained by working closely with their customers. As a result, they can create best-of-breed software for a niche market, and deliver personalized, custom-tailored service to small and mid-sized companies.

However, many of the leading enterprise resources planning (ERP) vendors also design and develop distribution software packages, and sell them as part of their broader portfolio of offerings. For these solution providers, distribution software is just one of a suite of many fully integrated business applications that are designed to support and enhance operations across an organization.

So, where does distribution software fit into the ERP landscape?

For some ERP suppliers, a distribution software system is a complete, end-to-end, pre-packed application that is designed specifically for companies in the distribution industry – including wholesalers, logistics service providers, and other firms who transport and deliver raw materials, chemicals, perishable items, apparel, and other products or finished goods.

These types of distribution software packages are “all-in-one” offerings that address everything these companies need to operate efficiently and effectively – from purchasing and procurement, order processing, billing and invoicing, and accounting and financial management (accounts payable, accounts receivable, general ledger, etc.), to customer relationship management, delivery scheduling and tracking, inventory management and replenishment, and more.

Yet other enterprise resource planning vendors market their distribution software solution as an individual module that is part of an all-encompassing suite of fully integrated applications. Their offerings include not only a system for distribution and logistics, but solutions for supply chain planning and management, financial management, human resources/human capital management, manufacturing and production, sales force automation, and other core business functions.

So, which approach is the best one?

The truth is, there is no “one size fits all” option when it comes to distribution software. Which type of distribution software system will be most effective will depend greatly on the size of a company, the complexity of its distribution processes, and the scope of its needs and requirements. For example, a small distribution company might be better served by choosing a niche distribution software vendor, who can work closely with them to refine the processes and workflows that the solution will eventually support. Yet, larger companies with more sophisticated and multi-faceted distribution operations may want to consider purchasing their distribution software as part of a suite of applications that will enhance core activities across their entire enterprise.