The Best Distribution Software is All About Streamlined Order Processing By Peter Lalush, Technical Content Writer at SelectHub
Any business focused on selling and shipping products needs to keep an eye on their supply chain pipeline, ensuring it’s flowing smoothly with minimal delay. Without modern technology, this process can be costly and time-consuming. Luckily, there are plenty of distribution management software solutions out there to help businesses stay on top of their product creation and delivery.
With all the options on the market, it can be hard to determine which is the right choice. But there are a few key considerations you can use to help you get oriented and decide which software will be best for your business. In this article, we’ll outline some of the benefits and features distribution software can offer, as well as some of our analysts’ top picks.
Executive Summary
- Distribution management software is built to help automate and streamline a business’s supply chain.
- Set goals and benchmarks for before, during and after purchasing software to ensure you’re making the right decision.
- Key features include reporting, supply chain management, warehouse management and asset tracking.
- Be sure to ask internal and external questions to gather as much information as possible before committing to a software purchase.
Deployment Methods
As with most other business software, distribution management software can come in one of two forms of deployment: on-premise or cloud-based. Let’s take a closer look at each.
On-Premise
On-premise deployment means your distribution management software is housed on a computer or network physically located within your organization, allowing you to maintain complete control over the software, users and data. This deployment strategy protects critical data from malicious access by managing and maintaining it with an in-house IT department.
However, on-premise deployment is more expensive considering deployment and solution maintenance costs, and isn’t as easy for small businesses to implement because of its high upfront cost of entry.
Cloud-Based
Cloud-based software deployment means entrusting the software to its parent company. While your business has less direct control, housing the software online reduces the cost of entry and makes the vendor responsible for things like maintenance and updates. You can also use the software more easily, since any web-connected device can access the cloud. As processes become more complex, it’s easy to scale and accommodate additional modules.
In addition to scalability and cost-saving, resilience, accessibility and disaster recovery are other benefits of cloud-based solutions. On the other hand, if the cloud is down, it may temporarily affect business processes and prove detrimental in terms of cost. Some businesses may also have concerns about data security being put into the hands of another entity.
Primary Benefits
Let’s look at the benefits of distribution software.
Reduced Costs
Distribution management software contains modules to organize the costs of operating warehouses and distribution centers into a framework that makes comparing them across locations easier. These include cost assignment, calculation, reporting, analysis and the aggregation of financial reporting statements, helping you minimize outgoing funds while maximizing company profits.
Faster Shipments
Between order and inventory tracking and warehouse management, distribution management software enables you to have a complete view of — and the ability to optimize — your supply chain, which further enables on-time shipments, order fill rates, line fill rates and pick accuracy. Other key metrics include inventory accuracy, space utilization, labor productivity, receiving, put-away, replenishment, picking and shipping.
Improved Scheduling
Adopting distribution management software can help a business meet their production and delivery goals by the dates and times promised by measuring and improving internal schedule compliance — an excellent way to make sure delivery dates and locations are correct and costs are low.
Better Visibility
Distribution management software provides a detailed view of each step in the supply chain, from initial material supply to final product delivery. This allows you to monitor your warehouses’ supply of resources and products and reorder when they’re running low, as well as identify and circumvent slowdowns in the process.
Higher Reputation
Distribution management software’s process automation features enable faster service, precise delivery and instant resolution of customer complaints during order fulfillment. This in turn improves customer satisfaction in your business, leading to better reach and more repeat business.
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Implementation Goals
Before purchasing distribution management software, it’s important to have a set of goals in mind for what you and your business hope to achieve by adding it to your workflow. These will be different for every business, but here are a few to consider for your own list - just remember that goals work best when they’re measurable, so make sure you have solid numbers for them.
| Goal 1 Customer Retention | Through increased efficiency and transparency regarding deliveries, good use of distribution management software should lead more customers to return to your business. Set a goal for what number of repeat customers you’d like to have over a certain number of months — your software should help you meet or exceed it. |
| Goal 2 Faster Average Delivery Times | Automating certain parts of the supply chain with distribution management software should ideally cut down on the time it takes to deliver a product to customers. While you can’t always stop unforeseen issues or delays, averaging delivery times before and after incorporating a new software solution can help indicate how much your performance is improving. |
| Goal 3 Consistent Warehouse Supply Levels | Distribution management software’s automation capabilities can keep your warehouses from running too low on supplies by automatically reordering them when stock reaches a certain minimum threshold. This can help keep you from experiencing shortages or delays. |
| Goal 4 Improved Manufacturing Time | Automating parts of the supply chain process with distribution management software can also speed up the time it takes to turn raw materials into the goods you sell. It’s more advantageous to measure these parts separately rather than as a whole, as you can then pinpoint where the software is helping most of all and where it may need your attention. |
| Goal 5 Increased Incoming Revenue | As an overall goal, businesses want to maximize profits, and measuring the amount of money you’re earning before and after implementing distribution management software is an indirect but helpful indicator of how it’s affecting your business. As long as it’s increasing, you can be sure you’ve made the right software decision. |
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Basic Features & Functionality
Let’s consider the basic features of distribution software:
| Distributed Order Management | Distribution management software allows businesses to centralize their incoming orders and select distribution centers to carry them out based on location. These features also provide order-level details, status, quote-to-cash (QTC) and more to audit transactions. |
| Inventory Control and Management | Distribution management software lets businesses manage inventory levels across a warehouse or an entire distribution network. It allows you to calculate reorder points based on product order levels. Track order quantity, lead demand, stock cover and more. |
| Inventory and Order-level Financial Reporting | Evaluate inventory status across multiple warehouses while providing a single statement of all inventory levels and their financial value. If you’re using accounting software, you can integrate it with some distribution software to create a single, unified system for managing distribution operations. |
| Warehouse and Distribution Reporting & Analytics | Get a complete picture of your supply chain with distribution management software’s real-time reporting and analytics features, allowing you to send instant updates to customers and stakeholders and catch slowdowns before they become a problem. |
| Integrated Asset Tracking Systems | Track physical assets like machines, vehicles, computers and other equipment through an asset management module and RFID technology. You can also set up alerts and notifications to assign personnel for different work orders and schedule equipment maintenance. |
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Advanced Features & Functionality
Below are some advanced offerings to watch.
| Forecasting and Demand Planning | You can leverage the data received from distribution management software, such as cross-functional demand, to create forecasts and inform decisions about business functions. You can also launch product workflows, pricing, promotions, rebates and models that predict how efforts will impact inventory levels and velocity. |
| Electronic Data Interchange (EDI) Expertise | Distribution management software can integrate with EDI software to help you securely exchange transaction reports and documents like purchase orders, invoices, RFQs, loan applications and more. Using EDI helps minimize data loss and transmission errors as well. |
| Warehouse Management | Entrusting your warehousing workload to your distribution management software allows you to manage individual stock-keeping units (SKUs) and automatic ID technologies (bar codes, RFID and EPC codes), support multi-location analysis and warehouse location assignments by asset type, and analyze expected productivity rates. |
| Distribution Requirements Planning | Plot out a plan within your company requirements by using a table-driven structure that includes demand forecasts, current inventory levels, target safety stock, recommended replenishment quantities and replenishment lead times. |
| Supplier Collaboration and Scheduling | It’s simple to leverage distribution management software’s reporting and data transfer capabilities to ensure your suppliers are kept up to date on warehouse status, supply chain slowdowns and other issues. This software also assists businesses with scheduling resupplies. |
Distribution Software Report Expert recommendations and analysis on the top Distribution Software
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Current and Upcoming Trends
The Advent of Omnichannel Retailing
Customers are more likely to engage with brands that use multiple channels to reach out to them, a phenomenon known as “omnichannel” retailing. Software makes it much easier to leverage these channels and track their performance from a single location.
While eCommerce is booming due to its unbeatable convenience, there are still many advantages to selling in physical stores, through catalogs and even on television shopping networks, giving prospective customers more options to find and purchase your products and enabling you to reach multiple target audiences at once.
Expansion into Global Markets
Most businesses can find greater success by expanding into international markets, allowing them to sell to customers in several different regions. This expansion requires more focus on digitizing supply chain workflows, implementing cross-border trade and cross-channel marketing strategies, streamlining payment technologies and providing international shipping services.
Distribution management software can assist in this expansion by calculating international shipping costs and taxes, as well as monitoring warehouses in multiple regions to ensure shipping takes minimal time and effort.
Supply Chain Automation
Supply chain automation lets distributors effectively manage day-to-day operations and make informed decisions about staffing, shipping and warehousing, facilitating smarter inventory management. This is an industry standard inclusion for most distribution management software, giving companies of all sizes the ability to monitor their supply chain and minimize the tasks they need to perform.
Automating a business’s supply chain helps reduce the time taken for the whole process, and allows you to send customers real-time information on when the item they want will be in stock and when it’s expected to arrive at its destination. Some distribution management software also uses machine learning to help you anticipate demand.
Distribution Software Report Expert recommendations and analysis on the top Distribution Software
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Software Comparison Strategy
Now that you understand how distribution management software can help your business, how do you figure out which options are best for your business? We recommend starting with our in-depth comparison report. Once you’ve made a list of software needs and wants, take a look at how some of the most popular software vendors stack up regarding product support and integration across various features.
It’s important to do research on individual software and vendors as part of this process too. Ask questions internally about requirements, as well as questions of vendors about their software and support to make sure you’re making the best decision for your business. You can use the questions we’ve written out below as a guide.
Cost and Pricing Considerations
While you’re making a software comparison, you’ll want to be sure you consider how much your company can reasonably spend. For example, if you choose to deploy an on-premise system, you’ll have to purchase a one-time or recurring license. However, if you opt for a cloud product, you’ll pay less up front, but you’ll have to consider the long-term costs of a recurring subscription.
Additional costs include:
- Version upgrades
- Add-ons
- Data migration or customization services
- Training
- Implementation and maintenance
Distribution Software Report Expert recommendations and analysis on the top Distribution Software
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Questions To Ask Yourself
Use these questions as a starting point for internal conversations:
- How much are we willing to spend on new software?
- What systems will we need to be sure our software integrates with?
- What features and requirements are most important for our business goals?
- How many employees will we need to onboard?
- What implementation goals are we trying to achieve?
Questions To Ask Vendors
Use these questions as a starting point for conversations with vendors:
About the Software
- What forms of deployment does the software support?
- How does the software integrate with other business modules?
- How long does it take to onboard employees with the software?
- How scalable is the software over time?
- What pricing tiers are available for the software?
About the Vendor
- What software training do you provide for customers?
- How do you handle support requests?
- Do you have experience working with businesses in our industry?
- What consulting services do you offer?
- How knowledgeable is your support staff?
Distribution Software Report Expert recommendations and analysis on the top Distribution Software
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Next Steps
Distribution management software can have a number of benefits for businesses that need to optimize their supply chain and make more efficient deliveries.
Ready for the next step? Take a look at our distribution software requirements checklist to see what options might work for your business, and check out some of the links below to see how different software options stack up against each other.
