ERP Distribution Industries: Its Unique Segments

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In the distribution industry, which essentially serves other types of companies, enterprise resource planning or ERP software can have a major effect on many different aspects of the strategies used to serve client businesses.

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Distribution companies have diverse customers. Their customers may be offering general consumer goods, or chemicals or construction products, or trades materials or anything else. So all of these different companies use ERP differently. Here are some of the segments where ERP really makes a difference in operations.

Food and Beverage Distribution

In food and beverage distribution, the name of the game is quality assurance.

ERP for this segment has to handle product delivery timelines, but it also has to handle conditions for perishable foods and drinks. This is extremely important because it’s such a health issue — while many other kinds of products can sit in a warehouse, or on a truck, in adverse conditions, perishable food and drink products must be tightly controlled throughout their entire lifecycle.

With that in mind, ERP for food and beverage distribution will have timeline and scheduling tools built-in, as well as elements like pricing and discount tools, warehouse management and inventory resources and more, but they’ve also have cold chain storage functionality and other features built in to help handle the health and safety aspect of this business.

Soft Goods and General Consumer Goods

With non-perishable consumer goods, the focus of ERP moves away from health and safety, and moves toward product handling as an essential part of functionality. To this end, the ERP software will have inventory of forecasting tools that really capably handle supply chains and delivery logistics.

One example is the use of barcode technologies and barcode management, as well as other kinds of product tracking and bulk product handling. Order processing and order management will be central in this type of distribution ERP.

Medical Distribution

With medical distribution ERP, the focus moves back to specific regulatory standards. Companies in this particular segment have to compete on convenience and accuracy, but they also have to maintain standards for medical supplies.

Some features of medical distribution ERP involve sales cycle enablers, work queue and inventory handling tools, pricing and rebate options, and customer-facing analytics and reporting features.

Other aspects of this type of software may cover tracking and quality assurance for medical supplies that must be up to a particular industry standard, or a federally mandated standard, on delivery.

Trade Wholesaler ERP

A different type of distributor ERP can help handle distribution for companies like HVAC and plumbing distributors.

In this type of distribution ERP, there is often a focus on product handling. Because these distribution companies have a large number of products to manage, barcodes and SKUs and tools for cross-referencing get built into these ERP systems to help with the overall coordination of product delivery. Another major focus is on invoicing and AR/AP.

Whether it’s in the show room or at a job site, the ERP software offers the companies the ability to deliver individual or bulk orders in very specific ways.

Automotive Distribution

The automotive industry is a specific one with its own unique global network and requirements for distribution.

With this in mind, distribution ERP software for the automotive segment will also have a focus on parts management to catalog and handle high numbers of parts involved in servicing all of the makes and models of vehicles on the market.

It will also have a global focus, as large networks of companies work with each other to build parts for automotive systems. Some of the best ERP tools will have a lot of product specifics included for distribution, not only providing specifications like weight and price, but with accessory warranty and labor information also attached. Automotive parts have to be delivered in the context of a service — they’re not just widgets to be shipped — they have to be supported, so that the end customer can use them the right way.

Again, automotive distribution ERP has to have vibrant data support for large catalogs, and also the ability to look back to previous eras of manufacturing. This is no small task, and you’ll see a wide range of features built into automotive distribution ERP tools to meet the challenge.

Janitorial and Building Maintenance Distribution

Another somewhat related segment for distribution ERP is in building maintenance. Whether it’s structural products, cleaning product or products for installation in a modern building, the entire industry relies on the same distribution software packages to get orders where they need to go.

This type of ERP will also have focus on pricing and supply chain processes, often with a special focus on customer relationship management. These businesses have to compete for significant volumes of market share related to the biggest property owners in a given community, and so in the wholesale world as well as in other aspects of B2B, customer relationships are key. So the ERP tools may have a significant focus on CRM functionality. Specifically, many of these tools will combine a knowledge of the customer’s background with a knowledge of what particular products a company may most need.

In addition, distribution ERP for this segment will typically include all of the other generally helpful tools, such as supply/inventory and AR/AP resources.


Specialized B2B Sellers: Power Equipment

In the realm of power equipment, there is also a careful focus on what customers need at any given time. Distribution ERP in this segment will also carefully control and identify inventory, and move this data toward customer-facing processes.

For instance, in fluid power companies, distributing items like hydraulic and pneumatic equipment and hydraulic fluid will take a lot of informational precision and knowledge of a customer’s needs. Pipeline tools demonstrating a knowledge of customer histories may also suggest what types of equipment a customer has in-house — which will help salespeople to serve the customer better. Automatic ordering tools may streamline the sales process as well. Advanced order tracking and other resources can make sure that orders get completed and delivered efficiently.

In general, the ERP will be tailored to the company’s size, and its inventory, and what it offers customers. Certain spec sheets and other products on power products may also be integrated into the company’s digital catalog system. Here again, there is a dual emphasis on educating customers about what’s available, and bringing them products and resources they most need.

Specialized B2B Sellers: Hardware

With physical hardware, companies often require a focus on internal operations. This, again, comes from common sense thinking about how this type of distribution works — a customer needs a particular volume of goods, possibly with instructional materials. The distribution company may need to brainstorm ways to package like products together, or figure out kitting, or identify the best means of packaging many small bits for bulk delivery.

Many manufacturers in this space talk about the responsibility for handling large volumes of SKUs in order to serve customers. They may also need specialized resources such as quote follow-up tools and other handy features that help serve the deal all the way through the process.

In this and other segments, the software build of the distribution ERP platform is critically important. The best platforms will have application programming interfaces or APIs that allow plug-and-play development and compatibility across an IT architecture. They will need to have built-in data handling aspects that account for precise distribution and the very detailed control of product lines.

Specialized B2B Sellers: Packaging

Companies that are distributing packaging equipment and products also have a specialized mission.

These companies may need supply chain control, and they may need customer relationship management. They may need assistance with product identification and catalog development. But many of them also need in-depth inventory handling tools.

Where inventory accuracy is a trial for a company, advanced distribution ERP can help automate the chain of distribution. They can help with lean inventory or cutting down on warehoused materials. These specialized software platforms can help human operators to “drill down for data,” to get a better handle on what’s going out the door, and what customers may need at any given time.

All of the above segments rely on specially designed ERP software packages to optimize their distribution processes. Distribution is a key point in the lifecycle for a company’s products. It makes a difference in how that company is perceived and what happens around the company’s branding. It also makes a big difference to individual customers who need certain outcomes in order to develop their own business processes. Distribution ERP helps accomplish these goals in many different types of business fields, by compiling some of the best specialized resources for each segment to help companies to innovate and drive growth.

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