Distributor Management Systems (DMS) are fundamental to the route-to-market strategy of any consumer goods company. A comprehensive distributor system software is necessary for businesses to flourish, improve their service, and satisfy their customers. It streamlines the entire logistics and supply chain by managing the distribution network, including forecasting, transportation, warehousing, and delivery.
As an integral part of the logistics and supply chain, DMS impacts the overall economy of the manufacturers and retailers directly. Here are 6 top factors that influence logistics planning and distribution management.
Customers need several different items, each sold or used at a different pace, and may vary based on factors like seasonality and economic changes. Besides these, other variables like sales promotions at the retailer or seasonal inventory built by the manufacturer make forecasting even more difficult.
Any retailer or manufacturer would wish to have enough inventory to sell or keep production running smoothly. Stocks arriving before you need them or arriving late to your warehouse can be detrimental to the business. It can lead to a loss in sales and dips into customer acquisition costs, or on the flip side, leads to increased warehouse costs or losses if products have a short shelf life. These customers wish to hold as little stock as possible without running out. Hence forecasting the product mix is an integral part of the equation and should not be guesswork.
The main objective of distribution management is to effectively execute operations of fully loaded trucks on regularly scheduled routes on time. Some uncertain circumstances, like extreme weather events and temperature changes, can harm supplier assets, leading to service delays or temporary shutdowns. It can result in loss of business, contracts, and customers.
An effective distributor system must adapt and create projections and planning around the climate to ripple throughout diverse supply chains and should strive to maintain the optimal inventory with the suppliers. With this, you can keep the inventory management costs at a reasonable level without excessive safety stock.
Customers would quickly jump to another brand when they do not find your product on the shelf. Running out-of-stock would be the last thing a manufacturer might want to hear as a reason for poor sales numbers. Information on the go and effective communication are crucial for a sales rep, and they must ensure a proper flow of information. Distributors should have access to real-time sales information to replenish inventories automatically. Transparency in the distribution network helps to anticipate customer needs, adjust stock levels and plan deliveries.
Planning & Measuring
From forecasting, procurement, inbound freight management, warehousing, and inventory control to order processing, load consolidation, delivery schedules, and backhauls, consumer goods companies must measure every element of their business, and distribution management systems come in handy. Cycle time, cost analyses, on-time deliveries, accurate order fulfilments, and safety measurements should be areas of focus. Create a solid plan for every situation and ensure you get input from every staff for realistic planning.
Training and Commitment
Please keep in mind that training your employees to execute features of a distribution management system does not limit them to explaining and demonstrating a function. Your team must understand the logic behind doing their job right and the potential ramifications of poor performance to the company’s future. For superior distribution management, you have to empower any new staff with the aspects of their job and be able to make intelligent and independent decisions.
Implement the right tools
Leverage inventory management and warehouse management software to optimize space within a warehouse. By efficiently using and maximizing the existing space, companies can reduce the expensive expansion and create more efficient inventory placement. Intelligent routing software can help distributors optimize vehicles and drive costs. Fleet optimization is a substantial cost driver for a successful distribution management firm.
Successful Distribution Management
Making informed decisions, optimizing every single process, and striving to improve performance are crucial factors for a successful distribution management software. An excellent distribution management system will try to resolve fundamental questions like what, when, and How much by properly handling data, forecasting, and inventory management.
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Published by March 14, 2023 by Ivy Mobility