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Why Distributor Management System necessary for an FMCG company?

Why Distributor Management System necessary for an FMCG company?

In the Indian economy, the fast-moving consumer goods (FMCG) segment is already the fourth largest sector. What is more interesting is that the regional/small players and rural India are going to be the two most important growth drivers for this industry and the growth difference is having a rising trend in successive quarters. 

On the other hand, an increase in disposable income in rural India, the introduction of a food security bill, direct cash transfer subsidy, and other policy supports, rural India is already contributing to overall FMCG revenue and it is only going to move up.

Advanced Distributor Management System Software (DMSS) deals with the corresponding steps within the supply chain connected to the distribution of finished products. The steps will include manufacturing, packaging, inventory, warehousing, and transportation facilities. 

Nowadays, distributor management system software in India is indispensable to manage the complete supply chain and fulfill consumers’ demands. It helps in tracking secondary sales, up-to-the end level, helping organizations streamline key factors of their channel sales from faster stock replenishment, reduction in inventory carrying costs to higher production planning.

With growth on the table and the entire pie up for grab, can an FMCG company really take the risk of avoiding automating its sales and distribution process end to end? Even though there would be multiple challenges or problems starting from multi-brand distributor issues to integration woes, the answer is ‘NO’. 

While we can have a discussion on what are the challenges and how to overcome those for some other day. Let’s focus on the key benefits a company can reap by using a Distributor Management System (DMS). We have listed down some important benefits of DMS:

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#Real-time visibility of all business data

As an FMCG company, it is of utmost importance for you to have real-time visibility of all business data from your distribution channels. If a company is not using a DMS, then it will have to rely on the offline data provided by its distributors which is neither real-time nor authentic. 

But they cannot really compromise on some of the key information such as current stock available with distributors, orders pending for fulfillment, the order being returned by the retailers, and many more. Hence, to manage your distributors smartly, a DMS is what you need.

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#Know what’s happening even in the most remote place

With the growth in revenue in rural parts of India, FMCG companies are setting up distribution networks in almost all the districts to facilitate faster product movement from manufacturing plants to the retailer. 

With such kind of volume and at times the distributor’s  remote geographical location, it becomes impossible to gain visibility on your product movement from all your distributors. 

With the help of a DMS, you will have all the data on your fingertips in real-time even for a distributor having its set-up in North-east states or in a difficult to reach remote areas in Rajasthan.

#Major support for your distributors

It’s obvious you may initially face resistance from your distributors when you share an idea of implementing DMS. It is really a solution that will be nothing but extremely helpful in terms of automating and streamlining a lot of their daily processes. Automation of processes like all kinds of goods movement, details of outstanding payments, system-generated invoicing, notification and alerts are a few examples of how a distributor’s life is going to be simplified with a DMS.

#Faster claim settlement:

Another key benefit that your distributors will get after DMS in place is better and fast turnaround time for settlement of the claim. With schemes, return, damaged receipt everything automated through DMS, distributors will always have the transparency and the company on the payables and receivables. Further with online claim submission through DMS, all the claims will be settled much faster than a manual system which usually goes through multiple rounds of iterations between both the parties.

#Good control of trade promotion and schemes

Promotion and schemes are two of the biggest drivers of the business for an FMCG company. Generally, companies spend a good amount of money on these activities. But there are two relevant questions which many times remain unanswered – 

  1. Are the benefits being passed on to the retailers? 
  2. How successful are my ongoing schemes? 

One of the easiest ways to get an answer to these questions is to implement a DMS – Distributor Management System which will ensure all essential checks and balances during the time of invoicing and will also support you with an analysis of the performance of each scheme.

#Smarter and Quicker stock replenishment

As we all are aware that for FMCG companies how critical it is to maintain the optimum stock levels at different touch-points such as distributor, retailer, stockiest, etc. As a Distributor Management System (DMS) gives you exact visibility on stock, expiry date, batch number, return, etc. at distributor points, you can get alters in advance and you can plan replenishment much earlier than otherwise.

#Smart production planning

Ideally your Distributor Management System (DMS) should be integrated with the demand planning module of your ERP application. Once the integration is done, your ERP system’s production planning engine will have essential information on the current stock level, orders pending for fulfillment at your distributor points. Finally, this integration will ensure smart production planning resulting in less or zero wastage of your production resources.

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#Process Standardization

Finally with one system in place for all the distributors, as an organization, you’ll be able to ensure all of your desired processes associated with distribution are standardized and most significantly, as all the parties involved are bearing on one system only, there’ll be just one version of the reality which is able to remove the unnecessary back and forth at the time of any conflict.

#Better Inventory Management 

With information about sales and stock provided to you in real-time, systematic inventory management will become seamlessly easy. Further, it aids you in making better business decisions concerning the demand and provides the products in the market.

#Complete Visibility on Secondary Sales Execution

FMCG companies earlier had to attend for the collection of data about secondary sales execution from the distributor. With the demands of DMS, companies will have complete visibility of the secondary sales execution in real-time.

#Increase Efficiency with Reduced Cost of Operations

Distributors can now avoid investment in workstations and human resources. Furthermore, it reduces the revenue loss to the company by cutting off the extra costs on pilferage & damage.


Each product in the manufacturing company goes through various stages to reach its final destination. Once the product is ready, it is delivered to the consumer through a wholesaler and retailer system. In the supply chain Distribution Management System (DMS) handles the corresponding steps associated with the distribution of finished products. 

These stages include manufacturing, packaging, inventory, warehousing, and transportation facilities. The whole process ensures that there are no errors in the types of products that need to be delivered and does not confuse the time and amount of delivery. All of these processes require proper communication, transaction monitoring, and pricing.

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