Top 10 Distribution ERP Systems for 2022
The top 10 distribution ERP systems are great. But do distribution businesses require specialized ERP systems? Well, let’s look at the distribution business model. So how hard could a distribution business be? You simply buy and sell products. Right? Well, the distribution processes could be as complex as other involved industries such as manufacturing. Industrial distribution businesses have varying levels of complexity with their needs for vendor catalogs. They also need support for buying groups and ever-growing support for more UoMs.
The complexity is not just limited to the industrial distributors. Even the FMCG distributors have complications with their processes. These complications may include their need for shelf-life and expiration date management. They may also include raw material price fluctuations, and blanket purchase and release orders. The process complexity and the critical success factors drive the need for the right-sized ERP system for your business.
This article outlines the top 10 distribution ERP systems for 2022 that should be part of your evaluation. These products will be helpful if you are looking for products positioned to be the most successful in 2022. To finalize this list, we have analyzed hundreds of ERP systems and their capabilities through publicly available information. The list also relies on our teams’ experience in evaluating these ERP systems for our customers.
The purpose of this article is not to recommend these distribution ERP systems. Instead, you must carefully analyze your requirements. This analysis will help you find a suitable product from this list or a list from your industry.
Criteria:
- Overall market share/# of customers
- We not only look at the number of installs but also the size of the customers. The higher the market share of the product, the higher it ranks on our list.
- Ownership/funding
- The more committed the management to the product roadmap, the higher it ranks on our list.
- Quality of development: legacy vs. legacy dressed as modern vs. modern UX/cloud-native
- The more cloud-native are distribution capabilities, the higher it ranks on our list.
- Community/Ecosystem
- The larger the community for the specific product, the higher it ranks on our list.
- Depth of native functionality for specific industries
- The deeper the distribution functionality provided out-of-the-box, the higher it ranks on our list.
- Quality of publicly available product documentation
- The poorer the product documentation, the lower it ranks on our list.
- Distribution Product Share and documented commitment of the publisher through financial statements
- The higher the focus on distribution, the higher the ERP system ranks on our list.
- Ability to natively support diversified business models
- The niche products designed for specific distribution industries tend to struggle for companies with diversified business models. So the more diverse the product, the higher it ranks on our list.
- Acquisition strategy aligned with distribution
- Did the ERP publisher acquire a company to fill a specific hole with its distribution capabilities? The more aligned the acquisitions are with distribution, the higher it ranks on our list.
- User Reviews
- The deeper the reviews on public sites by distribution companies, the higher the score for a particular product.
- Must be an ERP product
- It can’t be an edge product such as Salesforce, Workday, ServiceNow. Ariba, or Coupa. It also can’t be an add-on owned by ISVs or VARs that sits on top of other accounting platforms.
10. SYSPRO
SYSPRO is an ERP system targeted at small distributors. It has richer functionality for distributors than smaller packages such as Odoo, Quickbooks, Zoho but requires consulting and implementation help. SYSPRO product is similar-sized to other single-tenant products such as Microsoft GP, SAP Business One, ECi Macola, and Infor Visual.
While smaller in size, SYSPRO has a similar feel as SAP products with its accounting and distribution functionality. It also includes strong support for inventory features such as activity-based costing. Additionally, it has rich support for various UoMs, raw material fluctuations, inventory families and grouping, DC and supply chain network planning. SYSPRO is also the only product that has support for formulation for small food and beverage distributors. However, the products in this category only support discrete BOMs limiting their adoption in the F&B and chemical distribution industries.
SYSPRO traditionally had a file-based data store like GlobalShop and QuickBooks, but now in the last 2-3 versions, they have migrated to a SQL-based data store. With this datastore, now SYSPRO can be reliably used by slightly larger distributors. For these reasons, SYSPRO lands at #10 on our list of the top 10 distribution ERP systems.
9. Infor® Distribution SX.e
Infor® Distribution SX.e is a much larger multi-entity product and competes with the likes of S/4 HANA and Oracle ERP in the upper mid-market segment. While there are several niche manufacturing solutions in the upper mid-market, SX.e may be the only solution in the distribution space that can provide deep distribution functionality out-of-the-box for larger, global distributors.
Just like Infor LN and CloudSuite Industrial, Infor® Distribution SX.e is pre-integrated with Infor’s WMS and integrated supply chain solution Nexus to make it a complete solution suite out-of-the-box that can offer extremely rich functionality for larger distributors.
Distribution businesses have different needs compared to manufacturing such as vendor rebates, raw material fluctuations with quick updates to pricing and costing, omnichannel capabilities, and robust kitting functionality. And Infor Distribution SX.e has rich support for all of these features without requiring custom development as you would need on top of other larger products such as SAP S/4 HANA or Oracle Cloud ERP. For these reasons, Infor SX.e lands at #9 on our list of the top 10 distribution ERP systems.
8. Epicor Prophet 21
Just like Infor® Distribution SX.e, Epicor P21 is widely popular among industrial distributors with companies with complex business models such as retail, distribution, light manufacturing, and value-added services. However, while Epicor P21 may be as deep as Infor Distribution SX.e product with its operational functionality for distributors that have domestic operations, it’s not as globalized and localized as Infor® Distribution SX.e. But Epicor has been building global functionality as part of this product.
Epicor P21 has a simpler designer for customizations that may be easier for smaller distributors to pick up than Infor‘s designer, which is designed for companies with more complex customization needs and ideally suited for companies with slightly deeper development backgrounds and needs. But Epicor’s designer will be limited with the options you might have to customize.
Unlike its other legacy platforms, such as Eclipse or Vision, Epicor has a clear direction for the P21 product to move and advance to a cloud-native Kinetic platform. Additionally, unlike other vanilla distribution products such as SAP Business One or Microsoft Dynamics 365 Business Central, Epicor P21 will have much richer operational functionality for industrial distributors. These include electrical, HVAC, and plumbing. Still, it may not be as globalized and localized. For these reasons, Infor SX.e lands at #8 on our list of the top 10 distribution ERP systems.
7. SAP Business One
SAP Business One has been one of the most adopted distribution software in the on-prem setting. But SAP Business One cloud is not as well adopted just yet due to the missing add-ons and partner-provided functionality.
Like SYSPRO, SAP Business One has deep inventory features such as rich support for UOMs, planning for complex distribution centers and Supply Chain, and deep distribution resource planning (DRP) functionality. However, unlike SYSPRO, SAP Business One is also one of the most localized and globalized platforms in the small distribution software category and may be more globalized than Infor Distribution SX.e and Epicor P21.
Unlike most distribution software, SAP Business One doesn’t offer WMS functionality out of the box even for smaller distribution operations and relies on vendor-provided add-ons. On the other hand, most newer breeds of distribution ERP systems like Acumatica, NetSuite, or Rootstock natively pack several rich WMS features. These features include batch/wave picking, license plating, and cross-docking. They also offer a cloud-native mobile app pre-integrated with the core ERP. For these reasons, SAP Business One lands at #7 on our list of the top 10 distribution ERP systems.
6. Microsoft Dynamics 365 Business Central
Like SAP Business One, Microsoft Dynamics 365 Business Central is a distribution product in its core with its support for advanced features such as automated bin allocation and putaway. In addition, the Microsoft Dynamics 365 Business Central also offers globalized functionality for large distributors that prefer and can afford to integrate best-of-breed WMS solutions with the core ERP.
Like NetSuite and Acumatica, Microsoft Dynamics 365 Busines Central’s new design is a rearchitected, fully-migrated cloud-native codebase. As a result, it can offer much richer best-of-breed integrations with other apps in the Microsoft portfolio, such as Microsoft Dynamics 365 CRM.
While Microsoft Dynamics 365 may be richer in its core distribution and finance functionality for global distributors, it might not have the last mile functionality required by the industrial distributors. Epicor P21 and Infor Distribution SX.e offer such functionality at a much deeper level. For these reasons, Microsoft Dynamics 365 Business Central lands at #6 on our list of the top 10 distribution ERP systems.
5. Oracle Cloud ERP
Like SAP S/4 HANA and Microsoft Dynamics F&O, Oracle cloud ERP targets companies with more than 10-20 entities. It has richer cloud-native operational functionality than SAP S/4 HANA and MS Dynamics F&O.
Oracle Cloud ERP prepackages one of Oracle’s strongest TMS systems and its WMS. However, while Oracle has stronger operational cloud-native ERP and TMS functionality, its commerce and CX platform is not as rich and modern as the products in the SAP portfolio.
Unlike SAP EWM, which is designed initially for large OEMs with large BOMs and SKUs and quality requirements, Oracle’s TMS’ and WMS’ design is suitable for high-volume industries. As a result, and for these reasons, Oracle Cloud ERP lands at #5 on our list of the top 10 distribution ERP systems.
4. Microsoft Dynamics 365 F&O
Like SAP S/4 HANA, Microsoft Dynamics 365 F&O targets companies with more than 10-20 entities. It has richer cloud-native operational functionality than SAP S/4 HANA as of today.
Unlike SAP S/4 HANA which would require app-based integration and might struggle with the source of authority, It is also natively integrated through a database replication layer. It integrates with several best-of-breed products in the Microsoft portfolio, such as Microsoft Dynamics 365 CRM and Microsoft Dynamics 365 Commerce.
Unlike Infor Distribution SX.e and Epicor P21, Microsoft Dynamics F&O might require companies to build the last mile functionality that industrial distributors need. As a result, and for these reasons, Microsoft Dynamics 365 F&O lands at #4 on our list of the top 10 distribution ERP systems.
3. SAP S/4 HANA
SAP S/4 HANA targets distribution companies with more than 10-20 global entities. And these companies require far more global financial control than smaller distributors with a couple of branches in the US.
Even some smaller distributors may have entities in countries that require complex localization such as Brazil and India. These countries’ localization needs are difficult to implement because of their complex VAT and tax structures. They are so complex that products such as Infor Distribution SX.e and Epicor might not be able to support them natively and might require another add-on or another ERP to support the needs of these countries.
SAP S/4 HANA prepackages SAP EWM, the best-in-class solution for WMS and TMS functionality. SAP S/4 HANA can also offer superior options in its portfolio for best-of-breed integration, such as SAP Success Factors for HCM, Ariba for P2P, and SAP Hybris for omnichannel commerce. But since SAP solutions don’t integrate as well as other competitors, such as Oracle, Microsoft, and Infor, the customers need to have the internal capabilities to integrate these products.
SAP S/4 HANA is behind in its cloud-native capabilities compared to other products in this category, such as Microsoft Dynamics 365 F&O and Oracle Cloud ERP. But overall, SAP S/4 HANA is still a very strong solution for distributors. For these reasons, SAP S/4 HANA lands at #3 on our list of the top 10 distribution ERP systems.
2. Acumatica
Like NetSuite, Acumatica is among the top three cloud-native products and Sage Intacct. And Acumatica is targeted at companies with a few legal entities with limited multi-entity functionality needs. While Sage may be targeting some of the DTC brands after its acquisition of Brightpearl, it will be very hard for them to match the core distribution functionality provided out-of-the-box by NetSuite and Acumatica and win deals in the distribution space.
Unlike legacy vendors such as Infor Distribution SX.e and Epicor P21, Acumatica doesn’t have as global capabilities as of today and may require partner-built add-ons to support the last mile functionality for industrial distributors such as Electrical, HVAC, and plumbing. Acumatica‘s core design of supporting branches with a balance sheet or without a balance sheet makes an ideal solution for companies with several locations nationally or in a couple of countries.
Acumatica has a cloud-native mobile app and deep WMS functionality offered as part of its core, such as wave and batch picking, native UPS and FedEx functionality, POS, native integration with Shopify and BigCommerce. However, while Acumatica can support various feature sets required by smaller distributors, it lacks other richer WMS functions offered by similar products in its category. For these reasons, Acumatica lands at #2 on our list of the top 10 distribution ERP systems.
1. NetSuite
Unlike Acumatica, NetSuite is among the top three cloud-native solutions born in the cloud. NetSuite has richer globalized and multi-entity functionality that makes NetSuite a versatile solution of various sizes. NetSuite and Acumatica are fairly comparable with their rich UOM support at the item and item category level that other smaller ERP systems might not offer. In addition, they both have support for matrix inventory for companies that might carry inventory in various shapes and sizes. The matrix inventory is helpful for industries such as Apparel, footwear, and accessories.
NetSuite also has richer WMS capabilities with support for item families, shelf-life management, and auto-populate expiry dates for lot-controlled items. While NetSuite is an excellent solution for B2B and B2C distributors, it might require add-ons for process-centric industries. These industries could include food and beverage distribution and other industrial distribution verticals such as Electrical, HVAC, and plumbing.
Although NetSuite can work with companies with several global entities, its main target is SMB distributors with not as large globalization needs as their larger peers such as Oracle ERP Cloud or SAP S/4 HANA. NetSuite may also not have as deep last mile functionality as Infor Distribution SX.e and Epicor P21 for industrial distributors and may require add-ons to support these industries. For these reasons, NetSuite lands at #1 on our list of the top 10 distribution ERP systems.
Conclusion
Distribution businesses are natively different. Their need for the planning cycle and how they structure distribution networks are entirely different. While you might feel that most manufacturing ERP systems might be able to support the needs of a distribution organization, they will never feel as natural. And your employees might end up performing most of their planning on a spreadsheet or a siloed add-on that will be a bottleneck to your process scalability.
So next time, if you are evaluating a distribution ERP system, pay attention to the fine line and select the right-sized distribution ERP system for your company.
