For distributors
Inventory management software for distributors
Distributors win or lose on fill rate and inventory turns, across a lot of items and thin margins. This page covers what to look for in inventory management software for distribution, and where planning software fits alongside your ERP.
Why distribution inventory is different
- A stock-out can lose the order. A customer who cannot get an item from you can often buy it elsewhere.
- A long tail of items. A small share of items usually drives most of the sales, and the rest tie up cash and shelf space.
- Supplier rules. Minimum orders, pallet quantities and free-freight levels shape every purchase.
- Branches. One location can be overstocked on an item that another is about to run out of.
What to look for
| Need | What the software should do | Why it matters |
|---|---|---|
| Reorder points by item and branch | Calculate them from each branch’s demand and lead time | One company-wide rule overstocks slow branches and starves busy ones |
| Branch transfers | Suggest moves before new purchases | Spare stock you already own costs less than a new order |
| Supplier minimums and freight breaks | Build orders that reach them | Small, uneconomic orders eat a thin margin |
| Real lead times | Measure them from purchase order dates | Promised lead times can be optimistic, and safety stock depends on them |
| Item classification | Set service targets by class | Not every item deserves the same stock level |
| Excess and dead stock | Flag items and the cash they hold | The money is often better spent on items that sell |
| Fill rate reporting | Report by item, branch and customer | It is the number your customers feel |
ERP, warehouse system or planning software?
A distribution ERP runs orders, pricing, purchasing and accounting. A warehouse system directs receiving and picking. Most ERPs also hold reorder points, but someone still has to keep thousands of them current.
Planning software does that part. It reads your ERP data, recalculates the numbers and suggests orders for a buyer to approve. For the wider picture, read our guides to inventory planning software and supply chain software.
The numbers to watch
- Fill rate: the share of demand shipped from stock. See fill rate vs service level.
- Inventory turns: how often stock sells through in a year. See what a good turnover ratio is, or use the turnover calculator.
- GMROI: gross margin earned per dollar of stock, useful for comparing product lines. See the GMROI formula.
- Dead stock value: cash in items with no recent sales. See how to find dead stock.
Start simple
If you have not reviewed your stock rules in a while, try min-max levels on your top items first, using the safety stock and reorder point calculators. You will learn quickly where your data is weak.
Where the Statadventure Optimization Lab fits
The Optimization Lab plans for each item at each location: safety stock, reorder points, suggested orders and transfers between locations. Orders are built around supplier minimums and freight breaks, and lead times are measured from your own purchase orders. The Money lens then ranks every improvement in dollars.
What it does not do. The Lab does not take orders, set customer prices or run a warehouse. It works alongside your ERP, which stays the system of record.
These planning features are on Planner and Growth. Growth is sized for up to 15,000 items and 10 locations, and if your catalog is larger, talk to us.
See it on your own items
The live demo needs no account. Use the sample company or load your own files, which stay in your browser tab.
Frequently asked questions
What is the best inventory management software for distributors?
It depends on what is going wrong. If orders, pricing and accounting are the problem, you need a distribution ERP. If you already have one and still run out of the wrong items, you need planning software on top of it.
Can inventory software handle multiple branches?
Good software plans each item at each branch and suggests transfers between them. Check that a product does this by location, because some tools only report stock across branches.
What is a good fill rate for a distributor?
It depends on your market and on what customers will accept. Measure your own fill rate by item class, set a target for each class, and spend your safety stock where a miss costs the most.