Distribution management is crucial for a company’s capability to productively attract customers and operate successfully. Executing it effectively requires streamlined management of the complete distribution process. This is where the role of the Distributor Management System comes into play.
Additionally, thousands of distributors operate in emerging countries, thus creating billions of potential transactions. As a result, FMCG firms today must constantly keep an eye on a distribution network of this size while juggling multiple channel partners for supervision.
To plan their go-to-market strategy, FMCG and consumer goods firms need complete visibility into secondary sales execution, with accurate data regarding inventory and use of schemes and offers. But how do businesses manage marketing while reducing expenses?
The answer is straightforward: Distributor Management System is used by leading businesses all over the world.
What is Distributor Management System?
DMS (Distributor Management System) is a precise secondary sales management tool that aids in streamlining and organizing the distribution of goods through distributors. A robust tool, the FMCG distribution management system aids businesses in effectively mapping out the business processes, including inventory, logistics, purchase and sales order management, supply chain management, and many analytical tools necessary to carry out distribution operations.
Distribution System’s Function in Supply Chain Management
For FMCG & consumer goods companies, distributor management is crucial for market penetration. The Distributor management system aids in the digitization and automation of the sales process, which includes inventory management, secondary sales execution, evaluation of the use of schemes and offers, and buy and return management for a company’s secondary sales operations.
The importance of a Distributor Management System
Real-time data visibility
Real-time data analysis of all distribution channels is beneficial in many ways, including providing sales analytics, stock-out scenarios, stock movement, improved procurement planning, scheme management, etc. Those without DMS rely on the offline data their distributors give. This information is not entirely authentic or current. As a result, real-time benefits are lost, and distributors are given power.
Immediate claim resolution
Distributors can settle claims more quickly online with the help of the distribution management system because they receive updates immediately. Many issues, like refunds, damaged receipts, schemes, and other issues, can be resolved promptly with the aid of DMS. All parties are aware of the receivables and payables, and transparency is upheld at all levels.
Stock replenishment becomes extremely accurate, resulting in less damage to goods and, ultimately, more profits, thanks to distributor management software’s precise and real-time data on the stock, expiry date, batch number, returns, and other factors. Analytics can also be used to forecast the need for restocking and make appropriate plans for it.
Improved administration of promotions and programs
Promotions and schemes significantly impact the profitability of your business. However, there have always been some challenges because it can be challenging to tell whether promotions and programs are reaching the stores. Knowing the advantages of a specific promotion or strategy is another difficulty. You receive all of the accurate information in real-time with the aid of distributor management software.
Workflow standardization for distribution
All parties involved in distribution at all levels use the same system, which is called a distributor management solution. As a result, there is only one version of the facts and the truth, which is unquestionable. This streamlines all the procedures and cuts down on the time required for them.
Benefits of Distributor Management Systems Compared to Conventional Systems
Complete visibility on secondary sales execution:
Previously, FMCG firms had to wait for the distributor to collect data on secondary sales execution. Companies can have full real-time visibility over the execution of secondary sales with DMS.
Better Inventory Management:
When you have real-time access to information about sales and stock, efficient inventory management is seamless and straightforward. Additionally, it helps you make wiser business judgments regarding the supply and demand of the market’s goods.
Distribution companies may now operate more efficiently while spending less on labor costs and workstations. Additionally, eliminating the additional costs associated with theft and damage lowers the income loss to the organization.
When all of your business operations are running smoothly, the time that is saved can be used to strategize, plan, and come up with new ideas for how to maintain or improve your place in the market.
Now that we know the procedure’s advantages, let’s examine the various difficulties businesses encounter when implementing a Distributor management system.
The Obstacles in Adopting a DMS
The most significant obstacle a brand confronts when deciding on a Distributor Management System for its secondary sales activities is that distributors are unwilling to embrace the DMS software provided by the brand, leading to incomplete visibility of the secondary sales data.
Reasons? Today’s distributors support working with several brands and numerous items from the same category within their core competencies. However, a distributor that uses a DMS software from one brand cannot use a different program for each brand they distribute for because doing so would necessitate the usage of an additional resource each time.
They decide to employ a single management/accounting system for all the brands they work with, such as DMS from a large brand or any other accounting software. Receiving and compiling data from distributors becomes challenging for the FMCG company. Additionally, there is a strong likelihood that the distributor would have to wait until the end of the month if there is no cloud integration.
It is simpler for distributors to use a cloud-connected single management system since they can continue to enter data using Tally or other programs. In contrast, the data of the particular brand is merged into their system. Additionally, it provides a complete insight into secondary sales for the FMCG industry and helps with inventory management by preventing overstocking and understocking.
Most distributors use different data entry systems, which presents another difficulty in integrating DMS. For recording secondary sales execution, they have been using Tally or any other comparable system for years. As a result, most distributors are hesitant to utilize any other DMS software.