Introduction
Van Sales or Ready-Stock Sales has been a common and successful distribution model for the Indian FMCG industry. Simply putting, van sales is when a company by-passes the typical order cycle of its supply chain and delivers products directly to the retailers, while on-the-move using various transportation vehicles commonly called as vans.
Who Uses This Model?
Theoretically, any FMCG company can deploy the van sales distribution model in a particular scenario, say a particular geography or a particular supply chain partner who prefers ready-stock. However, it is most common for FMCG companies with product verticals like bread, milk and poultry, where ready-stock is the default model of operations. In addition to this, van sale model is opted purely for the distribution efficiency as well, in verticals like aerated soft drinks where few brands enjoy majority of market share.
Let us understand the relevance of van sales on two fundamental aspects of a consumer goods company:
Perishable products: Van sales makes sense when the products have a limited shelf life and the replenishment has to happen regularly i.e. daily or every alternate day. In such cases, brands who can supply the latest or freshest stock, in a disciplined manner gets preference of a retailer.
Minimal differentiation: Van sales is efficient for products where the differentiation is minimal so that the number of SKU’s to be loaded in each van are handful and the focus is on volume. Also, with limited variety, the decision time of a retailer can be managed, and van’s movement can be consistent.
Why During COVID?
As India and the world fights the COVID pandemic, FMCG is proving out to be the lifeline business vertical for the country, more important than even banking or communications. Because food and beverages are perhaps the most valuable short-term assets for humans, with useful life ranging from a few days to a few months. Let us look at why van sales automation is the need to the hour during COVID:
Pre-COVID: Many FMCG companies with van sales or ready-stock model used to rely on printed booklets or a rudimentary notebook for order taking and cash collection. Data was entered manually and compiled at day-end by supervisors or line managers. Demand and supply mix used to be balanced and neither retailer not distributor used to fuss about having digitized details of the transactions.
During COVID: Three important aspects relating to the interaction between a delivery van and a retailer changed during COVID:
- Time: What used to be a leisurely exchange now became time bound because of the limited window given for deliveries, more market demand and pressure to service as many stores as possible and obviously the stressed atmosphere.
- Space: Due to the social distancing guidelines, many aspects about the physical exchange changed that led to a change in the perceived space. Focus went on delivering the products with minimal physical contact, and things like exchanging papers and pens, talking on mobile phones to double check rates and discounts got side-lined.
- Accuracy: Due to the constrained time and space, accuracy of the interaction between the van driver and retailer became important, because both parties knew the margin of error was low. Things like optimal stock replenishment which can sustain till next delivery, precise requirements for the next delivery, reasonable returns from previous orders and collection ledger took centre stage.
Post-COVID: Experts are already predicting a new world order post COVID. We believe that the SOPs (standard operating procedures) adopted for van sales distribution may get relaxed post COVID, but a lot of elements and best-practices shall be retained.
How Can Peri Help?
Peri can give you a product that works, that will be adopted by your sales representatives, supervisors, van drivers and helpers. The implementation will not be a painful exercise for your backend or MIS teams. Peri’s consultant will act as your business partner, friend and advisor at all stages, available 24 by 7 over calls (WhatsApp, Zoom or Skype). And most importantly, Peri’s senior management will take full ownership and accountability to ensure success of the automation initiative.
Below is the 5-day implementation process, specially designed for the COVID lockdown:
Day1: We will give you a demo application, very close to your actual business process. This will be explained to your core team over call and handed over so that you can do dry-run, testing and acquaintance with the application.
Day2: Peri’s consultant will work using screen-share with your MIS team to prepare core master data. This includes core setup, employees, products, pricing, schemes and suppliers. This was normally done independently, but often led to delays which we can’t afford during this crisis.
Day3: We will pick 1 depot and upload its stock as on today. We can be liberal here and inflate the stock in case data is not available. This gets corrected at month-closing. We will pick 1 champion user, and enter Day 3’s actual data as a parallel entry to test the integrity of the system.
Day4: We will do a train-the-trainer Zoom/WhatsApp call and explain the entire process to line managers and give them their respective platform access. they will also be given FAQ’s both text and video snippets.
Day5: Supported by the line managers, we will go-live with top business territories and hand-hold the users by taking queries over WhatsApp groups.
Together We Will !
As a technology partner of Indian FMCG companies, Peri wants to render full support and give confidence to all stakeholders out there, that we will sail through this crisis together and come out as a stronger business vertical. That operations and business will not be affected during this crisis due to information exchange. Let us work together to digitize, standardise, automate and make the van-sales process simpler, faster and more efficient.
One Comment
Ridha Fathima A M
Thanks for the article on FMCG Van Sales Automation.Looking forward for more articles like this.