In today’s business world distributor management system has become an important part of the FMCG & Consumer Goods industry to drive efficiency and deliver optimum productivity in the dealer/distributor landscape. Every FMCG company do business with thousands of distributors, who further deal with millions of retailers spread across a huge geographical area.
It becomes tough to maintain transparent dealings and obtain insights about secondary sales with obsolete ways of maintaining and transferring data. With evolving advanced technology, integration of distributor management systems has become crucial for inventory management, getting complete visibility on secondary sales execution and insights about schemes and trade offers.
Importance of Distributor Management System in FMCG
Tatic management of the supply chain is critical for consumer goods companies to ensure optimal market expansion as well as to build long-term relationships with the distributors. A robust distributor management system supports managing every stage of the supply chain to add larger value to a business on its route to market. Moreover, for FMCG companies it is a significant necessity due to the following reasons:
Secondary Sales Transparency: Transparency of real secondary sales execution is key to knowing exactly what the status of sales execution is, and it also gives input to various strategies such as investments at the store level, the performance of the team and also the effectiveness of trade schemes.
Curtailing Pilferage: Better and an efficient inventory management solution with a powerful distributor management system helps companies to minimize costs on pilferage and also on working capital in case of overstocking.
Maximizing utilization of schemes and offers: Complete transparency of secondary sales data gives awareness of the utilization of offers and schemes by distributors. By integrating data in real-time, companies can take quick actions if the offers and schemes are not being applied by the distributors.
Combine business operations: As DMS provides a centralized and unified platform of communication for distributors and the company, it bridges and combines the communication gaps and integrates all the business operations in a single platform.
Boost distributor experience: Distributor management software provides organized order management and automated claims and reward management, improving the distributor’s experience and thereby ensuring long-term relationships.
Basic Challenges Associated with Current Distributor Landscape
One of the major challenges for FMCG companies while introducing a distributor management system to their distributors is that they are resistant to adopting DMS software since they typically deal with products from multiple brands. To add to that, many distributors prefer to go for using conventional tally or excel for reporting secondary sales to companies.
Let’s take a closer look at the challenges to infer solutions.
- Multiple DMS for various brands: A distributor deals with numerous brands in a business. For each brand, if the distributor starts to incorporate a separate DMS software, then he will have to spend time and human resources managing them. Thus, this will definitely be time-consuming and laborious for the distributors.
- Using traditional tools: For distributors, this process is more convenient to update and maintain data of every brand in a single system like tally or excel, but it incurs the cost of time for companies as they have to wait for days to get the data and act on the insights.
- The inefficiency of distributors to allocate resources: For small distributors due to budget constrain or other issues, they may not have the resources to set up a workstation and a human resource just to maintain a DMS.
The solution to all these challenges lies in the deployment of powerful DMS Software which caters to the versatile requirements of the distributor landscape. Consider a scenario where a distributor is using excel or tally to account for secondary sales data, a simple tally plugging can help brands pick up the required secondary sales data without any interference to the distributor.
Factors that affect DMS
Even during a proper distribution management system, time is important when you are dealing with sensitive and perishable products like medicines and food products. In case of delivery even the slightest delay in shipment can cause your stock to get damaged and unsellable, leading to financial loss in the business.
An effective distribution management supports improved customer service by considering the buying habits of the prompt customers as the demand and supply in sales has a direct influence on the distribution patterns. In such a case tracking them can support your plan appropriately.
Though there is an organized distribution management system, a manufacturer’s or retailer’s demand can diversify accordingly which can affect the distribution system in your business.
With robust distribution management, one must utilize the most out of every delivery which means making sure that your trucks are complete to their optimum capacity and that they are on the correct routes for delivery on time.
The goals and challenges of your company are that certain stocks sell better at specific periods of times. Hence, there’s a need to consider what product mix will be of best use.
Guide to Choose your Best Distributor Management System
Today in the market there are several FMCG distributor management system providers, it can be tricky and challenging for you to choose the best DMS that actually helps you manage your supply chain based on distribution nuances. For your business below are a step-wise guide for choosing the best distributor management system.
- Check your distributor and retail landscape: It is critical to determine a DMS based on the problem areas in retail landscape visibility and complete visibility of DSR activities. In your business, if distributors are spread in different corners of your state or country, you must choose a DMS that provides cloud integration.
- User Friendly: For distributors using DMS must not be too complicated. Always keep in mind the ease of deployment and use when choosing a robust DMS. A cloud-based/mobile DMS software proves effective.
- Gauge adoption challenges: Adoption challenges such as integrating DMS for multiple brands, distributors blocking their minds to use existing practices of data entry and lack of resources for adopting DMS should be addressed while choosing a DMS for your organization. Also, you must look into the DMS features so that you can be sure that it fits well with your current distributor landscape.
- Check Online Reviews And Attend Free Demos: With proper product demos, you can see the system live in action and check the fitment specific as per the brand requirements. Once you’ve decided finally about a particular DMS software, do not purchase it until you can view some positive reviews or case studies of that DMS online.
A powerful distributor management system in FMCG helps companies to focus on strategizing for business growth rather than spending hours managing the supply chain.
Additionally, an efficient DMS provides necessary insights about inventory, secondary sales, the performance of distributors, response to offers and schemes etc. which aids important decision-making in the companies.