Wholesale/Distribution Software

Wholesale/Distribution Software

Distribution software covers the systems used to run operations, including accounting, inventory management, customer relationship management, order management, purchasing, warehouse management, and front counter operations. While small operations can use generic accounting and inventory management systems, distributors and distribution centers (DCs) require the special functions available in distribution management systems.

Wholesale/Distribution Software

Distributors sit in the middle of the supply chain, providing a connection between manufacturers and, ultimately, consumers. They must track products and terms for multiple suppliers and multiple customers, including such diverse things as economic order quantities and cooperative advertising dollars, for both suppliers and customers.

The complexity in the business is mirrored by the complexity in its supporting enterprise software vendors, as evidenced by the almost 100 different available wholesale distributor software options on the market. We wrote this buyer’s guide to help buyers better understand what to look for when assessing distribution software reviews in this market.

TThe chief issue with wholesale distribution software systems is lag time. Even when the various modules and components share a database, which is the norm now, there is a time lag between when events occur and when they are recorded. This can lead to improper decisions. Most systems are written with the assumption that changes are made and transmitted instantly; reality is different.

For example, when a customer places an order, ideally the value of that order should be immediately moved from current inventory and appear in accounts receivable. What really happens is that the order is entered, the inventory is tagged as “Allocated”, the pick list is generated, the inventory is picked and packaged. If the shipment is free on board (FOB) origin, once the order is picked up, the items should be removed from inventory. The inventory system’s recorded location of the inventory at any given time has important tax and floor planning considerations, which can affect cash flow.

The other limitation is expense. Even basic warehouse distribution software systems use bar codes, mobile readers, and a wireless network. More advanced systems require an extensive infrastructure that potentially requires every location on every shelf to have some form of hardware installed.