ERP Selection for Industrial Distribution - How to choose well (and why your partner matters)

I’ve spent most of my career inside multi-branch distributors—the kind with counter sales in the morning, jobsite deliveries in the afternoon, and a spreadsheet of price exceptions that never dies. If you’re starting an ERP selection for industrial/wholesale distribution, here’s how I frame the decision with executive teams and why the implementation partner’s industry IP is as important as the software logo on the box.

The four truths of distribution projects

1. Inventory is the business - You need to see it, move it, value it, and promise it accurately—across branches, DCs, vendors, and customers—without adding labor.

2. Margins are made in the details - Rebates, special-pricing agreements (SPAs), freight recovery, and contract pricing will make or break the P&L if your ERP can’t support them natively.

3. Speed wins - Counter and inside sales teams need search that just works, quotes that turn into orders without re-keying, and one-click fixes for the ugly edge cases.

4. The partner’s playbook matters - Several modern ERPs can run a distribution business. The difference is the partner’s experience, templates, and accelerators—the “how” they bring on day one.

   
   

Capabilities I test in every selection

Warehouse & fulfillment

• RF/WMS - directed putaway, bins/locations, cycle counting, replenishment, pick/pack/ship (wave, batch, load planning)

• Stock vs. direct (drop-ship) on the same sales order, with clean shipping docs and invoicing

• Transfers & inter-branch replenishment logic; cross-dock and back-order handling

• Shipment consolidation, carrier rate-shop or TMS integration, proof-of-delivery (POD)

Sales & customer experience

• Counter sales speed - scan, search, add—no hunting through 10 tabs

• Inside/outside sales - quote→order conversion, revision control, win/loss, tasks

• Product search with attributes, alternates, supersessions, and substitutes

• E-commerce/PIM hooks (images, attributes, rich content) and punchout support

Pricing, profit & rebates

• Contract pricing/SPAs with accruals and claim/chargeback automation

• Matrix pricing rules and net-price explainability (sales must trust the number)

• Vendor and customer rebates, freight/accessorial recovery, restocking fees

• Margin “guardrails,” what-if pricing, and credit/rebill that doesn’t wreck AR

Purchasing & planning

• Min/max, EOQ, seasonal forecasting, vendor calendars, lead-time tracking

• Vendor EDI (850/855/856/810), ASN receiving, blind receiving when needed

• RTV/RGA flows that don’t strand cost or inventory

Returns & service

• RMAs and vendor returns linked to original documents

• Kitting/assemblies and light manufacturing (where applicable)

• Rental and field service (if your model includes equipment)

Finance & credit

• Clean AR cash application, unapplied/short-pay handling, dispute/collections

• Credit hold rules that reflect your risk posture; batch processing and release workflows

• Inventory valuation (standard/average/FIFO), landed cost, and audit-ready postings

Analytics

• Branch/DC KPIs - turns, OTIF, fill rate, lines per order, freight recovery, revenue per headcount

• Exception lists (e.g., delayed invoices, orders on hold, negative on-hand) surfaced on a home dashboard so people act, not hunt

If a prospective solution can’t show these in your context—multi-branch, multi-UoM, and hybrid stock/direct—keep evaluating.

Why the partner’s IP is a big deal

On paper, many ERPs “do” the bullet points above. In real life, time is lost inventing what a proven industry playbook could provide:

• WMS configurations that already know a branch/DC layout, label formats, and pick strategies

• Prebuilt pricing/rebate templates and SPA claim files

• Credit/collections workflows tuned for high-volume AR

• Data migration kits for items, branches, contracts, and open orders

• A testing suite for core order-to-cash and procure-to-pay that catches regressions before your people do

Ask partners to demo their IP, not just the software. If they don’t have a library of role-based training, process maps, and cutover runbooks from prior distributors, that experience will be paid for on your project.

How I run the selection (and avoid “demo theater”)

1. Discovery & priorities - Write down the outcomes that matter (e.g., “reduce counter transaction time by 30%,” “achieve 99.5% invoice success,” “cut receiving touches”). Rank five must-haves.

2. Scripted demos - Vendors follow your script. Mine typically includes:

   • Quote→order with contract/SPA price and stock + direct lines

   • Pick/pack/ship with wave and shipment consolidation; POD capture

   • Purchase plan→PO→ASN receiving; cycle count; transfer request

   • Credit hold workflow and mass release; cash application with a short-pay

   • Credit/rebill and RMA/RTV tied to the original sales/purchase docs

   • Counter sale speed test (barcode + search + one “oops” correction)

3. Partner deep dive (parallel) - Review their industry accelerators, team CVs, and referenceable stories. Insist on a delivery plan that names the people and the playbook artifacts you’ll get.

4. Proof where it matters (option) - One time-boxed mini-proof for a non-negotiable (e.g., SPA claim, transfer planning, or WMS label flow).

5. Program plan & TCO - Phase the rollout (pilot + waves), define data conversion scope and responsibilities, and set a monthly release rhythm from day one. Include change-management and a branch enablement plan—train the job, not just the screens.

Red flags I watch for

• Search that drags or returns noise—counter teams will abandon it.

• Pricing that can’t explain why a net price happened.

• WMS that needs heavy customization to match a basic branch/DC.

• Partners who can’t show prior distribution cutovers with similar branch counts.

• “We’ll figure out rebates later.” (You won’t like the “later.”)

The short answer you came for

There isn’t one perfect ERP for industrial distribution—several are good fits. The difference between good and great outcomes is the partner and a selection process that proves capability against your flows, not a stage script.

If you’d like the demo script, a scoring model, or a neutral read on partner IP, I’m happy to share what’s worked for other distributors. No sales pitch—if the content is useful, you’ll know how to reach me.