Out-of-stock continues to be a challenge for consumer goods companies across the globe, making distribution one of the most critical aspects of their supply chain. A study indicates that a typical consumer encounters one out-of-stock out of every five trips they take to a store, leading to a loss of sales and loyalty. Retailers often try to tackle this situation by increasing safety stock, thereby increasing their expenses.

Consumer goods companies have to take care of many factors of distribution management like managing inventory, tracking store visits, claims management, supplier management, and more. With the complexity of emerging markets where there are thousands of distributors and millions of retailers, Distribution management transactions could go into billions. Consumer goods companies are continuously required to monitor their distribution network and secondary sales and track these transactions of vast magnitude, owing to evolving consumer behavior, increased competition, and several other factors.The key to complete visibility of secondary sales, inventory, and promotion for consumer goods is a Distributor Management System (DMS), and CPG companies rely on it to get the right products at the right place at the right time.

Let us first understand the advantages of a modern cloud-based Distribution Management System over traditional sales and supply chain management.

Is Real-Time Secondary Sales Visibility Possible With Your Current System?

Consumer goods companies earlier relied on data collection from distributors or legacy DMS to sync data to the central system to see what’s happening in the field. Cloud-based Distribution Management Systems (DMS) can provide complete visibility into field operations in real-time.

Does Better Inventory Control Translate Directly to Better Business Decisions?

With sales and inventory information available at their fingertips, consumer goods companies can exercise better inventory management and make informed business decisions about supply and demand in the market. Supply and demand decisions are grounded in current market reality rather than periodic snapshots. Restocking is triggered by actual inventory movements rather than scheduled review cycles. And the working capital efficiency gains that come from holding less safety stock without increasing stockout risk become achievable for the first time when inventory visibility is genuinely live.

Is Your Technology Infrastructure Cost Appropriate for the Scale of Your Operation?

Cloud-based DMS eliminates the infrastructure investment that on-premise or legacy systems require — servers, heavy storage, maintenance overhead, and the IT resource cost of managing physical infrastructure across multiple locations. For consumer goods companies operating across complex, geographically dispersed distribution networks, the cost reduction from moving to cloud infrastructure is material — and the freed capacity can be redirected to the commercial and analytical capabilities that drive revenue rather than the infrastructure maintenance that merely sustains operations.

Is Time Spent on Manual Processes Preventing Strategic Work From Getting Done?

With all your work and processes streamlined on the cloud and information available on demand, you save a lot of time utilizing it to strategize, analyze, innovate and plan to gain better market share for your brands.

Since we now know the benefits of Cloud-based distribution management systems over traditional or legacy systems, let’s look at how Cloud-based DMS can transform your route-to-market strategy and help you achieve sales and supply chain optimization.

How Does a Cloud-Based DMS Transform Route-to-Market Strategy?

Are You Monitoring Channel Performance With Enough Granularity to Improve It?

Evaluating the performance of a distribution channel is crucial to understand if the investments made in those channels are giving the desired ROI and which ones are weaker and need more push. With a cloud-based modern Distribution Management System, you can choose to analyze millions of field transactions and decide on performance metrics to monitor and improve the performance of your different channels. While channel evaluation can be on numerous metrics, you should keep the key performance driver in mind while analyzing channel performance.

Is Your Trade Promotion Management Generating Genuine ROI or Just Activity?

Consumer goods companies have to handle complex trade promotion activities daily, and most of their investments are in trade promotions. A modern cloud-based Distribution Management system will support trade promotion management and help you with advanced capabilities to manage a closed-loop trade promotion planning. With the ability to analyze transactions and built-in analytical capabilities insights, a DMS enables integrated trade promotions management for better commercial decisions, planning, profitability, and a better ROI on trade spending.

Is Order Management Automated Enough to Keep Pace With Distribution Volume?

A cloud-based Distribution Management System automates the order fulfillment processes from order acceptance to shipment, capturing, managing, and processing sales orders, allowing consumer goods businesses to oversee sales effectively. With the Order Bulk allocation feature, distributors can take orders for large volumes of SKUs or Product Units and process them instantly. Order management offerings of a DMS can include purchase order generation, invoicing, and order management analytics. You will be able to send customizable invoices directly from the platform and deliver correct billing without compromising the accuracy of your financial records.

Can Your DMS Handle Stockouts Intelligently Rather Than Just Flagging Them?

What if you could automate order allocation across different pack sizes of your product? Sounds interesting? Well, modern Distribution Management will allow you to achieve just that. Gone are the days of poor inventory restocking or missed SKU replenishment, leading to stockouts and missed sales opportunities. When a particular SKU or item has run out in the inventory, a DMS can allow you to replenish the order with the same SKU but a different pack size. For example, you can process orders of 1 Ltr water bottle with 500 ml bottles to ensure your brand is available in stores and a supply disruption doesn’t lead to empty shelves.

Is Your Reporting Infrastructure Giving Decision-Makers What They Actually Need?

Without the right metrics and data, it is impossible to run your business intelligently. Reporting feature within a cloud-based Distribution Management System allows you to develop custom reports according to your organization and its requirements. Some standard report types include Order reports, Collection reports, Debit note reports, Credit note reports, and Invoice reports (available as a part of the suite).

Tracking key metrics of sales reps and channels helps identify your best performers and evaluate the performance of your sales teams for better insights and analytics.

—
A cloud-based Distribution Management System can be a game-changer for your secondary sales. It allows you, your distributors, and sales reps to monitor or perform field operations from anywhere over both mobile & desktop. It can integrate seamlessly with your sales force automation (SFA) or Direct Store Delivery app to work as a central system providing real-time information into field execution. It also facilities better collaboration and communication between sales reps, supervisors, retailers, managers, distributors, etc.