In the contemporary business landscape, the Distributor Management System (DMS) has emerged as a critical component within the FMCG & Consumer Goods industry, facilitating enhanced efficiency and maximal productivity within the dealer/distributor domain. Given the extensive networks of distributors and retailers that FMCG companies engage with, spanning vast geographical regions, traditional methods of data maintenance and transfer are proving insufficient to uphold transparent transactions and glean insights into secondary sales.
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
Effective supply chain management is crucial for consumer goods companies to achieve optimal market expansion as well as to build long-term relationships with distributors. A strong distributor management system (DMS) plays an importanl role in managing every stage of the supply chain, adding significant value to the business. For FMCG companies, a DMS is essential for several reasons:
Secondary Sales Transparency: Real-time transparency in secondary sales execution is key to understanding sales performance. It informs various strategies, such as store-level investments, team performance, and the effectiveness of trade schemes.
Curtailing Pilferage: An efficient inventory management solution, combined with a powerful DMS, helps minimize costs related to pilferage and overstocking, thereby reducing working capital requirements.
Maximizing Utilization of Schemes and Offers: Complete transparency of secondary sales data ensures awareness of the utilization of offers and schemes by distributors. Real-time data integration allows companies to take quick action if offers and schemes are not being applied effectively.
Combining Business Operations: A DMS provides a centralized communication platform for distributors and the company, bridging communication gaps and integrating all business operations into a single platform.
Boosting Distributor Experience: Distributor management software enhances order management and automates claims and reward management, improving the distributor’s experience and ensuring long-term relationships.
Read More – Sales Tracker – An essential tool for your sales operations
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
Putrefiable Substance
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.
Purchasing Pattern
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.
Purchase Preference
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.
Enhanced Conveyance
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.
Seasonal Prediction
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.
Read More – Channel Sales – Definition, Pros and Cons, Strategy
Conclusion
Selecting an efficient DMS (Distributor Management System) is an important decision for FMCG businesses. They look to optimize their distribution operations and drive growth.
You can make an informed choice that aligns with your business goals and objectives by considering key factors such as operational needs, scalability, integration capabilities, customization options, user-friendliness, mobile accessibility, data security, and vendor reputation,
With the right DMS in place, you can streamline operations, enhance visibility, and unlock new opportunities for success in your distribution network.
