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.

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.

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.