5 Considerations When Purchasing New Distribution Software

Updated: August 05, 2010

While each distribution company may have certain business processes that make them unique, most organizations will have a core set of requirements that manage the majority of their operations. Below is a list of five core criteria to consider when review distribution software packages.

Considerations for Selecting New Distribution Software

Purchasing and procurement. Because distributors have more money tied up in finished goods inventory than manufacturers, effective and consolidated procurements becomes increasingly important. Clear visibility to vendor purchases, product costs for different vendors, and other such information becomes very important. An effective distribution ERP system should enable these processes.

Planning and demand forecasting. Given the higher finished goods inventory. accurately planning demand and corresponding inventory needs is very important. This is an area where ERP software solutions vary considerably, so this area should be carefully explored during the software evaluation process.

EDI and customer integration. The increasing importance of business to business sales underscores the need for seamless communication with customers. Integrated and automated communication of areas such as EDI, advance ship notification, and order status updates are very important and should be carefully considered with potential distribution software offerings.

Complex financial reporting. Many distributors expand their product lines as a result of their shifting focus away from manufacturing to distribution. As a result, it can become increasingly difficult to track sales by a number of different variables, such as sales by brand, product line, geography, etc. Your distribution software should contain robust financial reporting to support these needs.

Light assembly. While most distributors do not require sophisticated product configuration or other engineer-to-order functionality, it is still important that the distribution software enable final assembly of products. Packaging and value-add assembly processes are two examples of potential functionality that should be supported.

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