7 Ways A Distribution Management System Boosts Business Profits

7 ways DMS boosts business profits

In the dynamic landscape of the CPG (Consumer packaged goods)  industry, the efficiency of a company’s distribution network emerges as a key factor in its success. A traditional approach to supplier network management can hinder growth, leading to slowdowns and financial losses.

But, choosing a Distribution Management System (DMS) moves a company forward, giving it a tech advantage that makes it stand out from the competition.

The right Distribution Management Software can improve distribution workflows, making the supply chain work better and solving issues like overstocking or shortages. Having real-time access to information within the distributor network is a must. These benefits allow a company to operate at its true potential, regardless of its size – be it a small, medium, or large enterprise.

Here is why, in this article, we’ll explore the ways a DMS can boost your business in a profitable direction.

1) Demand Forecasting

A Distribution Management System (DMS) ensures transparent inventory visibility at distributor points, aligning inventory movements with sales and orders.

Crucially, DMS aids companies in creating demand forecasts, utilizing the forecasted data for a proactive approach to managing stock levels and meeting customer demands.

This streamlined process, facilitated by DMS, becomes a key driver in enhancing overall profitability.

2) Better scheme management

DMS facilitates the automation of scheme creation and application, providing a straightforward process. It helps in tracking secondary schemes, those passed through distributors to retailers.

Significantly, DMS enhances transparency, offering companies a clear view of market activities. Simplifying scheme management, DMS ensures that the budget allocated for secondary schemes intended for retailers is effectively passed on to the retailers.

3) Handling Distributor’s Claims

Building on scheme automation, DMS efficiently extends to claim automation. At month-end, distributors can generate both scheme-based and non-scheme-based claims, offering a clear overview. Once raised properly, the company can ensure a streamlined payout process.

This automation reduces claim conflicts, providing substantial time savings and transparency. DMS stands out as a crucial tool, elevating efficiency and clarity for all stakeholders in claim management.

4) Pricing Control

DMS enables companies to control product pricing effectively. It ensures that distributors, during retailer billing, cannot modify product prices, safeguarding against market price manipulation. DMS facilitates setting varied prices and margins, based on different areas, products, and batches.

Additionally, it enables grouping multiple SKUs under a parent code for accurate reporting, considering subtle packaging or volume changes.

With every bill, DMS guarantees correct product pricing for each retailer, providing reliable pricing control.

5) Preventing Stockout or Overstocking

DMS grants visibility into distributor inventory, facilitating analysis of each product’s stock and movement. This allows the creation of norms and processes to prevent stockouts.

Simultaneously, it identifies instances of overstocking, where excessive distributor investment is tied up. DMS allows businesses to take prompt actions, ensuring a balanced approach to inventory management and preventing both stockouts and overstocking scenarios.

6) Orderly Payment Collection

DMS simplifies order management for distributors, it helps them convert orders into bills based on available stock.

It enables tracking outstanding and receivables, allowing easy marking of payment collections against receivables.

With DMS, the payment collection process becomes straightforward, contributing to an organized financial transaction system.

7) Automated Tax Compliances

DMS acts as an ERP system for distributors, allowing seamless generation of Tax and GST reports. The reports are exportable in a Tally-compatible format, promoting easy adoption and ensuring the success of the implementation.

Wrapping Up

In the CPG industry, where time is money, an efficient Distribution Management System (DMS) becomes the key to saving both. It’s like having a well-organized remote control for your entire sales process.

The more you sell, the more money you make, paving the way for a brighter future for your business. A reliable DMS isn’t just about efficiency; it’s about creating a super-smooth sales and delivery system, making business dealings comfortable for everyone involved.