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Distribution Software Overview
There are many different types of distribution software that are available. Moreover, every software company out there would like to sell you their "distribution software." While sifting through the myriad of software vendors and choices, smart managers need to look for software that is right for their business. This includes analyzing the business to outline core functions and taking a look at the systems that are already in place and how to make them better or replace them. In most cases, implementation of distribution software will require replacement of some existing systems. This means that people will need to learn how to use the new distribution software to do their jobs.

Before we talk about what distribution software system to buy, it is important to narrow down a definition of distribution software. The needs of a company will vary, but generally when people talk about distribution software, they are talking about a software package that includes the following functionality or modules:

Warehouse Management: One key need for distributors and companies, particularly companies that have warehouses and send and receive a moderate to high volume of products is efficiency in the warehouse. An efficient warehouse can save a company a lot in terms of labor, storage, and transport. Typically the warehouse portion of a distribution software package includes shipping management, storage (container, pallet, sku, and space) functions, inventory tracking features, and stocking features.

Inventory Management: Centralized and effective inventory management is essential for organizations after they reach a critical point in their growth. Moreover, up to date inventory information needs to be available to people across the organization and in several different functional areas. Several key elements of the inventory management portion of distribution software is inventory accounting (centralized inventory data), inventory planning, and purchasing.

Customer Service / CRM: Generally, most Distribution Software applications have some form of customer relationship management software. This type of software includes some form of centralized pricing, order management, and sales force interaction. If the company sells directly to end customers, then the distribution software should also have connectivity to a web site, call center, or customer support functions.

Financial Management / Accounting: Finally, a distribution software package should also include some form of accounting software. This accounting functionality is particularly helpful since a distribution software implementation can cover multiple parts of an organization and extend to numerous operations. This portion of distribution software will vary from company to company, however functionality it should have is accounts receivable, accounts payable, and ledger capability. It should allow the organization to do its accounting in a real time, centralized manner with minimum manual intervention.

While the list above is a pretty good starting point for defining distribution software, many companies have many other features than one listed above. In addition, when some people talk about distribution software, they are describing only the first two areas, warehouse management, and inventory management. However the concept of distribution software is necessarily much broader and, to be effective, needs to incorporate changes in other areas or a company besides just the warehouse and logistics functions.

In addition to the basic functionality listed above, some companies will require a more extensive feature set. Other, smaller or specialized companies will require most of the features listed above, but may not use some of the others - it will depend on the business model. Larger companies typically need more functionality and their size dictates that they will need to have greater cross functional coordination that a smaller organization might need in software. Large enterprises may require fully integrated, Enterprise Resource Management Software (ERP). ERP software can cost tens of millions of dollars.


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