Food Distribution Software

The wholesale food distribution industry presents a variety of unique challenges, particularly regarding transportation, supply chain traceability and storage requirements. Frozen food distributors face concerns that are entirely different from those encountered by fresh produce or seafood distributors, and full-line food service distributors may face virtually all of those concerns.

For this reason, highly specialized solutions have evolved in this market niche. Software that works for a distributor of snack foods may not work for a distributor of fresh foods. We’ll look at the different types of solutions on the market to help you make an informed decision.

Here's what we'll cover:

What Is Food Distribution Software?
Common Features of Food Distribution Software
Evaluating Food Distribution Software

What Is Food Distribution Software?

Food distributors don’t just use one type of application in the back office—they use many. As such, the term “food distribution software” isn’t so much a name for a software category as it is for a diverse group of applications that assist with everything from ingredient costing (for food distributors that are also involved in manufacturing) to dynamic expiration date calculations based on data from sensors installed in refrigerated trucks.

Essentially, software applications for food distributors fall into the categories of supply chain management (SCM) software. Food distributors have the option of purchasing standalone applications for different supply chain needs, or investing in an ERP system, which includes various SCM applications along with other standard business applications like CRM and HR modules.

In particular, food distributors should consider investing in a distribution ERP system. ERP vendors have specialized their solutions around a variety of industry verticals, e.g., manufacturing and retail. Distribution ERP systems are pared-down solutions that eliminate modules distributors won’t need while adding flexibility in areas like order management and warehouse management.

Moreover, food distributors in industries dealing with fresh and highly perishable foods should examine ERP systems focusing on food traceability, i.e., tracking inventory as it moves from one link in the supply chain to the next.

These systems ensure that your inventory can be tracked upstream, back to your own suppliers, and downstream to the retailers’ shelves where it ends up. The FDA mandates that you at least be able to track inventory one link up or down in the chain in the case of a recall, but end-to-end traceability can inspire consumer confidence and help with damage control in a devastating recall scenario.

We provide a more thorough explanation of the technological requirements for and benefits of supply chain traceability in our report on lot tracking with distribution ERP systems.

Companies focused on the consumer packaged goods industry might be interested in exploring CPG software options.

Common Features of Food Distribution Software

The supply chain applications with which food distributors should be particularly concerned are warehouse management, transportation management and order management.

Food distributors should look for these features when evaluating SCM applications or ERP suites:

As part of a broader enterprise resource planning (ERP) suite, top food distribution software can also oversee the general ledger and accounts receivable, providing real-time reports of order entry, purchasing and pricing levels. As we’ve seen, an ERP system will also be necessary to ensure end-to-end traceability with regard to lot numbers, expiration dates etc.

The FDA is currently at work on defining traceability standards across the food industry, so now is the time to get a jump start on competitors by investing in an ERP system up to the challenge.

Evaluating Food Distribution Software

Like most industries, food distribution has been directly affected by globalization and economies of scale, not to mention environmental concerns. So although international exporting and importing in today's advanced systems is easier than it ever has been, a trend toward “locally sourced” operations has encouraged more organizations to shift into these arenas. Food distributor software provides businesses with the advanced functionality needed to manage the specific complications of international distribution networks—as well as more effectively reorganize through decentralization and the growth of regional food hubs.

Regional operations can particularly benefit from the ability of automated systems to help with increasingly complex tasks. Since these systems are expensive and the market is highly competitive, new products are seeking to capture business from smaller sources, offering specific functionality at more affordable prices.

Specific questions to ask when evaluating food distribution ERP software include:

• Do you need an on-premise client/server deployment, or are you looking for a cloud deployment?
• Will you need a system that offers reverse logistics for returns management?
• Can the system manage the unique regulatory compliance for your particular market?
• If your organization distributes to manufacturers, will the system provide the necessary kitting and assembly functionality?
• Are you involved in manufacturing as well as distribution? If so, what level of ingredient traceability do you need from your solution?