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Distribution Management Systems (DMS) are software applications that manage the core front office business activities from sales order processing, purchasing, and inventory management through to financial accounting. Unlike ERP and/or MRP applications, the DMS software application has long standing roots in distribution and therefore provides a much higher degree of functionality specific to the needs of specialized distribution companies. The business requirements of distribution-centric companies are in fact so specialized that a cottage industry of DMS applications have evolved over the years to address the challenges faced by specific market verticals and industries.
Retail distributors, wholesale distributors, specialty distributors, suppliers all basically move products to market but the software systems that are used to power these companies varies significantly. This complexity is compounded by the fact that each industry has functional requirements that are specific to the nature of the products being moved. Some examples follow to illustrate this point:
- In the automotive aftermarket industry, customers find replacement parts by providing information on the make / model / year of their vehicle. The distributor therefore requires a software system that enables a unique part to be identified by the combination of the make / model / year attributes.
- In the apparel industry, customers place orders for clothes by identifying demand quantities by a matrix of color / style / size. It is not unusual for the distributor to determine the quantity break down within the matrix because the customer places an order quantity for the aggregate sum of the product being ordered.
- In the health care industry, stringent requirements are in place for the cradle to grave lot control of products to enable rapid recovery in the event of a product recall. In fact, the unique serial number tracking of individual shipping entities throughout the supply chain is a real requirement that poses serious challenges to the companies that handle millions of shipments daily.
- Food manufacturers and distributors must satisfy product-specific code date requirements such that inventory is never shipped to a customer once it reaches a specific age. This requirement becomes further complicated when each customer demands to have their own specific shelf life requirements respected.
- For wholesale distributors that supply big box retailers, there is a myriad of customer-specific compliance requirements that must be satisfied with failure resulting in expensive fines. To further complicate matters, retailers are not consistent in their definition of EDI transaction requirements so that customer-specific EDI file formats need to be developed and maintained for sales orders, purchase orders, order confirmations, invoices, advance shipment notifications, etc.
- Industrial distributors often supply a massive catalogue of products to their customers and competitive differentiation through value added services has evolved into a fundamental business requirement for many distributors. One example of value added services is the concept of vendor managed inventory whereby the distributor arranges to automatically track, maintain and replenish a customer’s inventory. Often vendor managed inventory can require one or more daily deliveries to a manufacturing line to replenish just in time inventory and even a small mistake can adversely impact a costly production operation.
- Retailers have complex store ordering and purchasing/inventory management challenges that must address seasonality, product shelf life, support for promotional activity, push and pull store ordering cycles, restricted store ordering, fair share inventory allocation and a continuously changing product variety. The retailer’s ability to generate sales revenue with maximum inventory turns is predicated by a combination of the skills of the buyers combined with the demand planning and inventory management capabilities of the company’s software applications.
MWPVL International understands the unique distribution complexities associated with vertical markets and industries because we have worked with many companies to manage the important details that translate into their competitive advantage. MWPVL International has also cultivated a deep understanding of the software market to ensure that our clients have an understanding of which DMS applications are most suitable to their size of business, industry and market vertical.
MWPVL International works with suppliers, customers and business partners to provide trusted experience in helping companies with the following types of questions:
- Which DMS software application is best suited for our company, size of business, transaction volumes, preferred computing platform and financial budget?
- Should we deploy a specialized distribution management system or should we acquire an ERP system?
- What is the business case for investing in a DMS application? What is the total capital investment requirements including internal and external resources and what financial benefits or competitive advantage can we realistically expect to obtain from a new system?
- What are the main differences between the DMS solutions available within the existing market place and which vendors should our company evaluate based on our operating profile and industry requirements?
- Is there a structured process that we should follow when selecting a DMS application to ensure that we have done the appropriate due diligence to protect our company’s interests?
MWPVL International Inc. provides strictly unbiased advice and trusted experience in helping companies through the following efforts:
- Developing the business case and financial justification for a DMS application
- DMS requirements definition and RFP development
- Development of structured software demonstration scripts
- Vendor/solution evaluation and selection
- Software negotiation and acquisition
- Developing the project budget, plan, schedule, internal and external resource requirements for deployment
- Project Management
- Software implementation
- Ongoing support
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