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:

#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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#Stay Well-Informed, Even in Remote Settings:

With a constant surge in revenues in rural areas of India, FMCG companies are trying to elevate their distribution networks to encompass almost each district. Such expansion targets to regulate the effective transferring of products from manufacturing facilities to retailers.

Although, given the considerable volume and frequent remote geographical destinations of distributors, managing visibility over product motion from all distributors can possess a significant hindrance. Conveniently, a Distribution Management System (DMS) delivers a solution. With the support of a DMS, you can come across real-time data effortlessly, even for distributors working in the North-eastern states or in remote and difficult areas of Rajasthan.

#Empowering Your Distributors:

Naturally, when implementing the idea of integrating a Distribution Management System (DMS) to your associated distributors, you may come across beginning obstacles. Irrespective, this technology provides substantial advantages by automating and streamlining several aspects of their routine operations.

Tasks such as detecting several goods movements, maintaining outstanding payments, creating system-based invoices, and getting notifications and alerts are just a few examples of how a DMS can significantly ease a distributor’s regular responsibilities.

#Efficient Claim Resolution:

A pivotal benefit that distributors will highly cherish upon the integration of the Distribution Management System (DMS) is a rather more smooth and expedited process for managing claims. The DMS automates the maintenance of schemes, returns, and damaged receipts, ensuring that distributors constantly have clear insights into the company’s payables and receivables.

Furthermore, with the ability for online claim submissions with the help of the DMS, all claims can be resolved much more rigorously as compared to the conventional manual system, which frequently includes multiple rounds of back-and-forth interactions among both 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.

Conclusion

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.