Shortlist UK’s Best Distribution ERP Software

Easily find Wholesale Distribution ERP Software that balances your inventory levels, streamlines order processing, and optimises supply chain visibility.

What Is Distribution ERP Software?

Distribution ERP Software is an industry-specific enterprise resource planning system designed to handle processes unique to D2C and DSD wholesalers and distributors. It consolidates all core distribution functions in one platform, driving faster delivery times and fewer stockouts while meeting growing customer expectations.

Distribution ERP systems provide features that improve the efficiency of each operational phase, like inventory management and supply chain. Inventory management reduces stockouts and overstocks – lowering inventory costs by 10% – and supply chain visibility improves logistics costs by 15% and service levels by 65%.

For distributors, ERP removes disconnected applications between departments by combining core features like accounting and sales with distribution-specific features. These include warehouse management, order management, demand forecasting, logistics and shipping, and manufacturing.

What Are the Best Distribution ERP Software Systems In the UK?

How Leading Wholesale Distributors Benefit From Implementing Distribution ERP Software

Three driving factors lead distributors to implement Distribution ERP Software:

1. Increase consumer satisfaction and brand/manufacturer relationships
2. Provide a seamless and efficient process from manufacturer to consumer (reducing the risk of losing manufacturers to direct-to-customer models)
3. Strengthen and increase profit margins

92% of wholesalers and distributors use ERP Software, the third most popular industry to do so, behind Manufacturing and Healthcare.

Specialised ERP for distribution ensures vital distribution management tasks are aligned. That includes picking and packaging, inventory management, sales and accounting, warehouse management, transportation, and logistics. This enables distributors to focus on key areas such as:

• Inventory control: Including accurate and real-time visibility.
• Warehouse management: Ensuring deliveries are on time and orders are accurate.
• Cost-saving strategies: Demand forecasting and smart inventory systems enable improved planning to reduce over-stocking, under-stocking, and surplus wastage.

By unifying these processes, distributors can focus on delivering the right product and quantity to the buyer at the right time in the most sustainable and efficient way, ensuring customer satisfaction and protecting profit margins.

The tangible benefits of Distribution ERP Software are vast. Modus Furniture International increased inventory accuracy by 15% in the first year of implementing Distribution ERP Software. Brydens Increased profit margins by 23% over six years.

What Distribution ERP Software Features Are Used In the 10 Operational Phases?

There are 10 operational phases of distribution, each requiring unique ERP features:

1. Procurement and planning
2. Inbound logistics
3. Inventory and Warehouse Management
4. Order Management
5. Picking, Packing, and Shipping
6. Outbound Logistics
7. Sales
8. Billing and Accounting
9. Returns
10. Reporting and Analytics

1. Procurement and Planning

• Procurement management
• Demand planning
• Demand forecasting
• Materials Requirements Planning (MRP)
• Product Information Management (PIM)
• Inventory Management

2. Inbound Logistics

• Warehouse management
• Inventory management
• Transport management

3. Inventory and Warehouse Management

• Inventory management
• Warehouse management system (WMS)
• Bin/Location management
• Asset tracking integration (barcode, RFID, QR code)
• Cycle counting

4. Order Management

• Sales order management
• Order fulfilment
• CRM
• Matrix items
• Integration POS/Ecommerce

5. Picking, Packing, and Shipping

• Label printing and packaging integration
• Warehouse management system (WMS)
• Kitting and assembly
• Order fulfilment

6. Outbound Logistics

• Transport management system (TMS)
• Shipping and freight management
• Route optimisation/Fleet management integration
• Third-party logistics integrations
• CRM integration

7. Sales

• Customer management
• Sales order management
• Sales forecasting
• Demand forecasting
• Quoting and estimating

8. Billing and Accounting

• Accounts Receivable (AR)
• Accounts Payable (AP)
• General Ledger (GL)
• Invoicing/e-Invoicing
• Tax Calculation & VAT Compliance
• Payment Gateway Integration

9. Returns

• Return Merchandise Authorization (RMA)
• Returns Processing Workflow
• Inventory Management (handle restocks or disposals)
• Credit Memo / Refund Processing

10. Reporting and Analytics

• Business Intelligence (BI) / Analytics
• Dashboards & KPI Tracking
• Custom Report Builder
• Audit Trails & Compliance Reporting

3 Wholesale Distribution Challenges & How ERP Solves Them

1. Manufacturers Operating a D2C Model

A supply chain consists of several moving parts that enable manufacturers to get their products to consumers via distributors, wholesalers, and retailers. It looks like this:

Manufacturers -> Distributors -> Wholesale Distributors -> Retail Distributors -> Consumers

By operating with a direct-to-consumer (D2C) model, manufacturers are changing the supply chain fundamentals. Now, with D2C models, the supply chain looks like this:

Manufacturers -> Distributors -> Wholesale Distributors -> Retail Distributors -> Consumers

In a Barclays survey of 500 UK manufacturers, cutting out the ‘middlemen’ is projected to increase revenue, grow customer bases, and increase the speed of taking products to market.

But, while D2C accounts for 16% of all UK manufacturing sales, it is problematic. Take Nike for example; CFO, Matt Friend, openly admitted that the company’s D2C strategy had added ‘complexity and inefficiency’ to operations. This resulted in the global brand pivoting on its direct-to-consumer model following a decline in digital sales.

2. The Amazon Effect

The ‘Amazon Effect’ is being felt throughout the supply chain. So much so that 77% of distribution companies are now prioritising personalised user experience.

Distributors are facing more and more pressure to deliver an experience that matches that of Amazon, Alibaba, Walmart, and eBay in areas such as:

• Price competitiveness
• Delivery standards (time, effectiveness, and environmental sustainability)
• Return management
• Product/stock availability and variety

3. Shrinking Profit Margins

Rising outgoing costs are impacting distributor profit margins, with some operations working with a profit margin of as little as 3%.

Without the means to track overheads, direct costs, stock control, and wastage, distributors have no clear visibility of their outgoings. Without this understanding, finance admins struggle to forecast spending and implement cost-saving strategies.

How Does Distribution ERP Help Combat These Challenges?

To compete with direct-to-consumer models, distributors need to make the connection from manufacturer to consumer as efficient and smooth as possible. To do so, they must embrace technology.

Essentially, these real-world challenges stem from deeper process-based challenges such as:

• A lack of real-time visibility in operations and warehouse management
• Poor inventory management systems
• Supply chain management limitations

Distribution management solutions provide the tools to face these challenges head-on, with state-of-the-art integrated ecommerce platforms, end-to-end customer communication channels, and smart inventory and stock systems.

How Much Should Distributors Budget When Purchasing Distribution ERP Software?

Distributors and wholesalers will require an estimated annual first-year budget of between £10,000 (for smaller firms) and £500,000 (for enterprise operations). There is no set price for everyone, as several factors determine the final price:

• Number of users (from 5 to 100+): From Operations director and warehouse manager to sales reps and pickers.
• Modules required: Some companies will require focused modules for logistics and shipping, whereas others may focus more on inventory management.
• Customisation and integration: Integrations for POS, CRM, Accounting, and HR systems can cost 20% of your implementation budget.
• Implementation: Whether phased or parallel, each business requires unique implementation phases. Budget for data migration, system setup, module integration, and rollout.
• Training, support and maintenance: Whether moving from a legacy system or spreadsheets, training is essential – as is the upkeep of the system from the vendor.

Distribution ERP is a significant investment. Implementation and buy-in hinge on its potential return on investment (ROI). As 75% of implementations fail, it’s important to get it right and understand:

• Will it increase sales?
• Will it mitigate supply chain risks?
• Will it reduce costs associated with poor inventory and warehouse management?
• Will it allow you to compete and meet customer expectations?
• Will it reduce lengthy lead times?

In general, it takes 2.5 years to see a meaningful ROI after implementing an ERP.

Distribution ERP Software FAQs

What Industries Are Best Suited for Implementing Distribution ERP?

The advantage of specialised ERP systems is that they have access to specific toolsets designed for unique tasks. As opposed to out-of-the-box ones to fit your needs.

Because of this, distribution ERP solutions are designed for various industries responsible for durable and non-durable goods, including:

• Chemicals
• Automotive
• Machinery
• Agriculture
• Furniture
• Fashion and apparel
• Food and beverage
• Industrial

How Long Will It Take to Implement Distribution ERP Software?

For small distributors with one or two warehouses, expect an implementation time of 1-6 months. For mid-sized companies, implementation can take between 6 and 9 months. For multi-site and international organisations, implementation times can range from 9 to 18 months.

As with cost, implementation time for distribution ERP depends on factors like:

• Number of modules being deployed
• How many warehouses and sites you have
• Customisation required
• Number and complexity of external application integrations
• How much existing data is needed to cleanse and migrate
• Choice of implementation method
• Training and support required for users