ERP for Food Distributors: Key Functionality

As a food distributor, selecting an ERP (whether that’s for broadline serving foodservice and local retailers, or you’re importing product for national retailers, or as a food brokerage managing inventory), your business processes require a breadth of functionality.

For that reason, you should consider an ERP tailored for food distribution, rather than food processing, or process manufacturing ERP software in general.

Distribution ERP vendor checklist

Because your business operates on razor-thin margins, and you face extra pressures such as rebate programs, freight costs, and inventory turns, you need the right ERP system to keep your business moving...Literally..

Here are some key functionalities that, as a food distributor, you should consider for your ERP vendor checklist:

• Accurate inventory management and real-time visibility to quickly and easily correct inventory levels, so you can maximize cash flow and profitability. 
• Mobile-based order taking for real-time, device-agnostic order entry by customer service reps, route drivers, or customers (including integrated EDI and API-driven connections to e-commerce and trading partners).
• Smart buying and demand planning through purchasing planning engines and machine-assisted forecasting that use sales and buying history to reduce overstocks and stockouts. 
• Forecast accuracy using your sales and buying history, with tools for seasonality, promotions, and statistical forecasting.
• Vendor performance management including quality issues, shorts, lates, supplier scorecards, and automated supplier corrective actions.
• Integrated warehouse management including support for RF handhelds, barcode scanning, voice picking, and slotting optimization across multiple DCs or cross-docks. 
• Complete pricing management: Think contract pricing, customer-specific pricing, quantity breaks, penalties, start/end dates, promotional pricing, and integrated rebate management for complex distributor agreements. 
• Logistics and transportation management: Route planning and optimization, TMS integration, customer delivery windows, and management of third-party logistics providers or your own truck fleets.
• Cost visibility and landed cost management:  Show actual costs, overhead allocation, and markup; tie landed costs, duty, freight, and buying costs back to individual SKUs and shipments so your accounting and customer margins match reality. 
• Food safety and regulatory compliance with bi-directional lot and batch traceability across the supply chain, embedded recall tools (fast traceback and one-click recall reporting), allergen tracking, and audit trails to support FSMA, GFSI schemes, and customer audits. 
• Cold-chain and sensor integration: The ability to ingest IoT temperature and humidity logs for perishable loads and link them to lots and shipments for proof of cold-chain compliance. 
• Integrated financials and food distribution accounting: AR/AP, revenue recognition, branch accounting, lot-level COGS, margin reporting by customer/route/product, bank & payment integrations, and audit-ready financial controls. 
• Reporting, analytics, and dashboards: Operational KPIs (turns, fill rate, OTIF), customer profitability, landed-cost reporting, and exception alerts; many modern systems embed analytics and, in some cases, machine learning to spot anomalies. 

Key takeaways

Considering this kind of highly specific functionality, recognizable to anyone in the food distribution business, can be key to whether or not your new ERP system will deliver a strong ERP ROI and help you squeeze the most out of your thin margins.