Top 10 ERP Software Systems for Wholesale Distributors
When it comes to ERP, distribution companies have some unique needs that set them apart. Many companies need control over manufacturing, inventory, or customer information. Others may place more emphasis on data access and reporting.
Although each business may have different priorities, most distribution companies’ needs include:
A 360 degree view of the customer: What items does the customer usually buy? What items have they stopped buying? How do they prefer to place and receive their orders? This type of information allows wholesale, manufacturing, and distribution companies to provide better service to customers, and to achieve this, ERP software needs to provide integration between financials, warehousing, and a full range of customer information to help anticipate customer needs.
Strong Inventory Management: Inventory is always on the move in a distribution company, yet today’s customer always expects the items they need to be in stock. An inventory management system needs to be able to maintain real-time insight into stock levels, along with the ability to predict accurately for future needs. These will provide the information needed to maintain the right stock levels without excess storage costs.
Insight and Reporting: One of the big benefits of ERP systems is that they can pull together a variety of different types of information across different applications – from financials to inventory and logistics – and pull it together into a report that can give insight and assist with decision-making in many areas of the business. However, actually providing this insight can be challenging either because the applications being used are not integrated or because the systems do not have the processing speed necessary for the task. An ERP should be integrated across the applications that are crucial to your business, as well as having the processing speed necessary to give real-time access to the data you need, when you need it.
Profitability Analysis: You’re in business to make money, obviously, so your ERP systems should be able to tell you whether or not you’re doing so, not just at the level of the business, but at the level of the items you carry and sell. Profitability analysis allows you to analyze costs of products, cost to acquire customers, cost to carry items that certain customers buy, and so on. This will allow you to make important decisions about which product lines and customers are most profitable, and where you should focus your efforts.
The ERP systems in our Top 10 list all provide for these needs, to varying degrees. Most of them are stronger in some areas than others, so distribution companies will need to compare these vendors and their capabilities against the unique needs of the business.
Top 10 ERP Software Vendors
This top 10 list of ERP vendors for distribution companies includes vendors that provide on-premise solutions, hosted or cloud solutions, or a combination of solutions. We’ll be listing these top 10 ERP software vendors from largest to smallest.
1. SAP is generally considered the market leader in ERP, with the most installs of any vendor and 23% of market share. It has excellent capabilities in the areas of inventory management and reporting, but is widely reported to be not as strong in the area of CRM – customer relationship management.
2. Oracle is right behind SAP, with 16% market share. Due to its past acquisition of CRM vendor Siebel, Oracle has strengths in CRM that SAP has historically lacked. Oracle offers strength in Human Capital Management, Financials and reporting and analysis as well, but its inventory management module – actually part of its JDEdwards EnterpriseOne offering, lacks SAP’s strength of reputation.
3. Infor ERP for Distribution is a specialized cloud offering for the distribution space. Infor specializes in streamlining specific business processes, eliminating the costly customizations that are usually needed to make an ERP system work within a particular type of business. Infor has the 3rd largest install base at 16% of market share of all ERP vendors.
4. Microsoft Dynamics commands 9% of ERP market share and built its reputation on the strength of the companies it acquired to build its business – Great Plains, Navision and Axapta. Axapta, now Dynamics AX, is geared toward enterprise customers, while NAV and GP are geared more for the mid-market and small businesses. Microsoft has strengths in multicurrency, data tracking and ease of use, but isn’t particularly noted for its inventory capabilities.
5. Epicor offers specialized suites of distribution-oriented ERP packages, including its popular Prophet21 and Eclipse packages. Epicor offers software targeted at specific vertical markets and brings together the full suite of functionality needed for distribution, including core financials, warehouse management and inventory control, customer relationship management, and more.
6. IFS is a full-suite ERP product with particular strengths in the manufacturing and distribution needs of its customers. However, CRM is not a strength, which is a knock against it when it comes to a 365 degree view of the customer. Processing speed is another complaint that has been lodged against it.
7. QAD is focused more heavily on manufacturing than on distribution, so most of its customers tend to be manufacturer/distributors. However it does offer a full suite ERP solution that is integrated with the applications needed by most distributors, such as inventory management. Weaknesses include reporting, a somewhat clunky user experience, and the customer view.
8. NetSuite Distribution Edition is a cloud-based, full-suite ERP solution aimed primarily at mid-sized, fast-growing distributors that offers an integrated ERP, inventory, e-commerce, accounting, fulfillment, and CRM solution. NetSuite is able to cost-effectively support significant business complexity with a comparably minimal IT impact to the business. Some users report that the user experience is not intuitive. Processing speed is another complaint that is fairly common due to the need to transmit data over the web.
9. Syspro offers a fully integrated ERP suite for smaller to medium size manufacturing and distribution companies with particular emphasis on the sales order, manufacturing and inventory management processes. However, the CRM module is not as strong.
10. Sage’s ERP X3 package is aimed at small and medium size companies that need a cost effective solution with full-suite ERP capabilities. Sage’s solutions include warehouse management, inventory sourcing and allocation, pricing and promotion management, and after-sales service. However, an integrated CRM module is lacking.
These top 10 ERP software vendors for distribution represent the cream of the crop – those that any distribution company looking to make an investment in ERP should consider to provide better visibility into their critical business processes.
Are you considering an ERP investment for your distribution business? Let us know what you’re thinking about in the comments.