DMS – The Missing Tech Piece in the Indian FMCG Puzzle

Introduction

DMS or Distribution Management System is essentially a software that sits between a FMCG manufacturer say Britannia Industries Limited (one of India’s leading food companies with a 100 year legacy) and an FMCG retailer say 37 Krishna Super Marche (a highly successful departmental chain in North India).

Interestingly, the mainstream media (online or print) doesn’t talk alot about the entity that is the custodian of this software and has been supporting the Indian FMCG ecosystem since its inception – the FMCG distributor (includes super stockist and sub distributor as well). Peri CRM has been working with these outstanding business owners for many years now and offers them a simple, usable, efficient and adoptable software that makes their lives easy, improves inventory turnaround, order management, delivery management and overall business health.

Why important?

A FMCG company is as good as its distribution” because once the manufactured goods are shipped to a central depot and then sold to a distributor, the company has little control other than doing follow ups and asking for dispatch data from the distributor. A DMS plays the vital role of digitizing inventory, sales and more in this indirect, less controlled channel from the FMCG company’s perspective.

Indian distributors can be categorised into these three types:

  1. Exclusives: These are entities who exclusively work for a FMCG brands, mostly large conglomerates and adopt the precise systems, processes and proprietary IT systems developed by the company. For e.g. a distributor of Colgate would not keep another brand in same category and will work 100% as per company guidelines. These entities are outside the purview of this discussion.
  2. Organised: These are entities who work with 1-5 FMCG brands, understand the importance of adhering to company’s processes and take proactive measures to upgrade themselves in terms of manpower, fleet, accounting, audits and technology with a long-term business association in mind.
  3. Unorganised: These are entities who have an assortment of FMCG brands and are happy to manage stuff manually, do other daily grind themselves and want to remain out of the complications that processes, data and technology bring.

Once GST regime was launched in India, almost all the organised distributors and small percent of unorganised shifted to GST-compatible accounting packages. Some bought/upgraded to Tally, procured packages like Marg, Busy and other capable solutions. The others however have been sitting on the fence and avoiding the transition.

The next logical shift of these organised distributors is to adopt a full-fledged DMS package which can be integrated with FMCG company’s ERP, can handle complex inventory scenarios, integrate with Sales automation solutions and give them a mechanism to service orders and track dispatches. And close-loop the process by integrating with their existing accounting packages.

Tangible Benefits

There is some scepticism around the adoption of DMS by distributors. Allow us to shatter the myth

Distributors are excellent businessmen who evaluate an opportunity in terms of business returns. We believe there hasn’t been enough serious conversations around DMS where a company shows the value-proposition and tangible business benefits of adopting a DMS. Once that happens and there is a clear ROI calculation for reference, no distributor would have a reason to deny implementing a DMS.

And next 5 years or so, India will be going through a technology revolution which is sure to give a boost to the nation’s economy, companies including FMCG, middle-men and support partners like distributors and the end-consumer.

DMS must come to the mainstream and the day is not far when it would become a norm for every distributor to adopt an accounting package and a DMS to begin operations. The low-cost, highly flexible and agile options like Peri DMS are supporting this shift and working with distributors spread across the 2000+ Indian cities to realise tangible business benefits like:

  1. Onboarding: to align master data between the company and the distributor like product master and retailer master without any discrepancies.
  2. Live transactions: to help get periodic (say every night) transactional data like pricing, schemes, dispatches from the company so that distributor is always informed.
  3. Transparency: to be able to discuss the same numbers without worrying about correctness.
  4. Control: to be able to have control over one’s defined roles & responsibilities and not be dependent.
  5. Increased sales: to get live view of market orders and service them based optimally so that there is no sales loss.
  6. Cost savings: to reduce the inventory carrying cost due to better visibility of slow moving stock, about to expire stock, committed but not delivered stock and more.
  7. Stronger engagement: to be able to engage on meaningful discussions like market penetration, competition threats, geo-expansion and more without getting into monthly petty issues.

Peri’s Advantage

As a company, Peri’s motto is to make lives of FMCG stakeholders easier through technology which is best-in-the-class and user-centric. Peri DMS has been designed by our experienced consultants alongwith FMCG experts who have been struggling with DMS adoption for years. The product has attempted to solve the day to day challenges of working in FMCG supply chain and give a solution which is:

  1. lovable & adoptable: because there is no point in having a fancy software that on-ground people dont like using.
  2. agile & super easy: because time is of essence in FMCG industry and the workforce is maturing to technology solutions.
  3. SAAS with service: because for so long service has been a missing element in SAAS platforms which result in poor implementation and junk-in junk-out.
  4. beneficial with ROI: because technology should result in tangible benefits like 2 hours reduction in data entry time, 10 more orders a day getting processes, 50% more accurate deliveries and 15 days of increased cash flow due to better inventory and collections management.
UI

Struggling to get validated secondary sales? Or Suffering from a high distributor churn?

Peri consultants can help prepare a DMS implementation project plan with clear return on investment (ROI) and work with your sales team to conduct a pilot project.


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