Why is a Distribution Management System necessary for companies?

      Because of the sheer magnitude of a country's population, companies all over the world benefit from having large market potential. This is further enhanced by the presence of a well-established distribution network that connects the organized and unorganized sectors of the economy. Because it operates on a low margin & high volume basis, every manufacturing company searches for different methods to reduce costs, expand into new markets, and raise revenue to remain competitive. The manual management of the entire distribution network becomes more challenging for manufacturers when dealing with such a large volume of output and a large number of channel partners.

The manual process is carried out in the following manner:

1.      The company's dedicated executive will coordinate with Regional Distributors (RD) on a daily basis to track sales and inventories, which will typically be done over the phone or through the mail.

2.      The information will be provided by RDs in accordance with their availability and convenience.

3.      Manual entry of data into the system is then completed by a company representative before being sent to management for review and corporate decision-making.

 

The aforementioned procedure is time-consuming due to the large number of RDs it must cover, and it results in a significant amount of time, money, and resources being wasted.

For this reason, the use of Distribution Management System is a viable solution. In layman's terms, DMS enables manufacturers to maintain complete control over their distributed distributor network by integrating with their accounting system to make prompt and effective business decisions.

There are a variety of Distributor Management software available on the market, each with its own distinct application and features; nevertheless, before selecting one, it is important to conduct a thorough study of the benefits it provides. Consider the following list of short- and long-term benefits that businesses should consider before making a decision to invest:

 

1.    Immediate Benefits:-

 

      I.        Product Linking and SKU Mapping:

There is a potential that the item code at the manufacturer's end and the item code at the distributor's end will differ. A DMS should provide the manufacturer with the ability to automatically recognize the difference, align it with distributor data, and map the SKU appropriately.

    II.        Comprehensive Control over Distributors' Activities:

A good DMS system will provide you with complete control over your distributor's MRP, item alteration, ledger alteration, backdate entries, negative stocks, reorder levels, and other related operations.

   III.        Management of inventory:

An ideal DMS should assist manufacturers in avoiding circumstances when they run out of supply, so ensuring that no business is lost. In addition, it provides them with the ability to watch stock movement from distributors' end, visibility of damaged and undamaged products, and the ability to maintain the minimum necessary stock across various distributors.

   IV.        Sales Force Automation (SFA):

Every organization is on the lookout for sales force automation software. Consequently, an effective DMS software should provide integrated sales force automation to authenticate sales executive visits, track secondary and tertiary sales, monitor the brand presence, evaluate market rivalry, and do other tasks such as market research.

 

2.    Benefits in the Long Run:-

 

      I.        Targets Vs. Fulfillment Measurement:

Using a Distribution Management Software, you may develop a better sales strategy and acquire more accurate estimates by displaying targets vs fulfillment.

    II.        Increased Productivity:

Organizations can save a significant amount of time by automating various channel procedures such as order processing and real-time communication of distributor sales. This time can then be used for other productive tasks rather than being wasted on coordination and follow-ups.

   III.        Channel Management:

One of the traditional requirements of a good DMS is the ability to track specific channel partners' success by tracking their sales data. This results in firms being able to make better decisions and give price concessions to specific distributors in order to increase sales.

   IV.        Sustainable Distributor Ecosystem:

       Accurately tracking secondary sales would assist you in facilitating seamless distributor claim management           and scheme management. It will also enable businesses to accomplish faster stock replenishment, resulting        in a happier distributor eco-system as a result of the increased efficiency.