6 WAYS TO TELL YOUR BUSINESS NEEDS A DISTRIBUTION MANAGEMENT SYSTEMIf you ever felt like Chris, you know you need a Distribution Management System.
Chris is the CEO of a small and successful FMCG company, yet Chris is unable to break through the inefficiencies to propel to the next round of growth.
The success of most companies dealing with physical goods sometimes almost exclusively depends on the reach and efficiencies of the distribution system and Chris’s situation is no different.
With over 200 salesmen across the nation, handling over 20 SKUs, each in charge of multiple distributors, Chris has been struggling to overcome some problems inherent in distribution.
1. Order Planning & Scheduling: Chris does not have a view of the total orders that are in the pipeline and what quantities of each SKUs should he manufacture or discontinue for the next quarter. He could use the past history and do an estimate, yet that may not be an accurate estimate. If only there was a more efficient solution that would allow him to have a view of the aggregates of orders from all retailers, rolled-up through his distributors. The mismatch in order planning is more pronounced as Chris’s company manufactures in small batches and quantities manufactured could fall short of actual demand. Currently, the system is neither transparent and whatever visibility is available is actually historical. His distributors have also been demanding a daily view of the SKU movements at the retailers end. Better transparency could help the distributors do better credit and finance management.
2. Locating Sales Team: Early on there was a dedicated sales team that helped him achieve success as a small enterprise. With growth came in a whole new bunch of salesmen. He needed better monitoring, to ensure that the sales team is always on the field, appointing distributors and identifying retailers, converting more orders. On multiple occasions the irate retailer has directly called up the company’s helpline number complaining about delay in deliveries. Chris wished he had a solution to easily locate the closest (to the retailer) salesman so that the salesman could be directed to address the concerns of the retailer. This required not just knowing the location of the salesmen, but also do better route-planning.
3. Paperwork: Each part of the network (from salesmen, retailers, distributors and other agents such as C&F) does a lot of unwanted activities such as paperwork in terms of daily field reports, appointment letters, order taking, delivery reporting, claims filing, etc. This amounts to inefficiencies, where the salesmen could have spent an additional hour on the field every day instead of than filling up daily reports. In one instance, a key bulk order was missed in the paperwork as the salesman had misplaced the order copy. The problems with manual paperwork were multiple.
4. High Data Costs: Since data logging is carried out manually in the traditional way with no centralized view, it is expensive getting a more current and realistic view of the business. Today, salesmen call up their reporting manager informing them about the key visits daily. Then managers call up the distributors to take a stock of their current capacities. The problems and expenses of manual data collection are best explained with the following two examples.
• When a Distributor from Zone 2 needed a urgent orders to be fulfilled, it took a whole 2 days for each salesman from Zone 1 to reach out to every retailer for current overstocking and took each retailer to do a physical stock taking to fulfil the order. The retailer had to bear cost of paying overtime to his employees to stay overtime and do the physical stock taking, and was not particularly happy to spend. Wish he had a real-time view of stocks available with each retailer from Zone 1 (or any zone for that matter).
• Another time, a bulk order came from a distributor on the last day of the quarter. The order went through the regular paperwork trail which actually proved to be late in Chris’s planning.
5. Manual Systems: Distributors were manually logging deliveries: Chris needed to plan better with real-time information and reports about the stock with the distributors and retailers. He wished he could also capture, modify & re-order stock and view in-transit details as well.
6. Trouble Proving Returns & Claims: Chris needs to manage and track the return of goods as well as the announcement of schemes and discount claims. Manage salary and subsidies and find data about claims on price change, schemes, discounts, etc. Currently, there is no single-view to ensure that there is transparency and control in the system to avoid frauds.
Distribution management irrespective of the type of business is the backbone of goods moving across multiple constituents. Each party benefits from transparency and moving into a more digital environment in managing stocks, order placing, paperwork, claims management, etc.
Imagine, Head office receives overall as well as detailed reports. The distributor is allowed to view the reports for their Sales Team and connected retailers. This helps in detailed analysis, better planning and introducing corrective steps on real time basis.
Each day, thousands of CEOs and key stakeholders responsible for Distribution face similar challenges across the globe. So, if you are feeling a bit like Chris, we recommend you learn more about the OBOPAY Distribution Management System (DMS)
OBOPAY DMS is a one-stop solution to manage the distribution model of your business. The system has a portal and an app, allowing owners to manage their large stock units, streamline payment records, measure performance to enhance the efficiency.