When we talk about Distributor Management Solution, we focus mostly on processes related to order and billing. For example, how primary and secondary order placement process will be automated, how all kind of schemes can be defined in the system and applied during billing, how invoicing and payment process can be streamlined, how claim settlement can be more transparent etc. An important aspect that we often miss is how the solution can help in improving logistics operations process. For most of the industries and distributors, logistics plays a very crucial role and at the same time it is not at all simple to manage. Complications exist due to multiple factors such as wide range of SKUs, product expiry, multiple or very large sized warehouses, vehicle route determination, excise mandated documents etc. Lack of automation in that operation not only results in lot of manual overhead and cost escalation but can also put a distributor under significant legal risk.
In some of our previous blogs we spoke extensively about why Distributor Management System is crucial for managing a large-scale channel sales operations, especially for FMCG industry. While some challenges and resistance are imminent like they are in any other software implementation, in order to sustain a good business growth (or to achieve the same) and plug all the leakages in your distribution network, sooner or later you have to adopt a robust solution.
In one of our earlier articles (Link) we discussed in details why a Distributor Management System is must for an Indian FMCG company irrespective of its business volume. While for a large player, an automation of distributor operations would help in cementing its position, a budding company would find it as a useful ammunition to achieve the desired growth. However, we also briefly mentioned in that article that a DMS implementation is not a very easy task and could meet with many challenges which, if not handled properly, could lead to eventual failure of the entire implementation. And we all know what it means if an IT initiative fails in any organization. It’s not just about the money spent or wastage of time invested by senior leadership, in most of the cases such failures trigger a blame game within the organization which probably drains more energy out of the entire team for nothing.
The fast-moving consumer goods (FMCG) segment in India is already the fourth largest sector of the Indian economy. While the last fiscal year saw a decent 11% growth in this sector, according to IBEF reports, the sector is poised to grow at 27% CAGR for next few years. What is more interesting is that the regional / small players and the rural India is going to be the two most important growth drivers for this industry. According to retail sales data of the FMCG sector provided by market researcher firm Nielsen, while the top 50 firms contributed to 60% of revenue in the calendar year 2018 with a healthy 10.6% growth, the smaller companies grew by a much higher 18.5%. What’s more interesting is that the growth difference is having a rising trend in four successive quarters. On the other hand, increase in disposable income in rural India, introduction of food security bill, direct cash transfer subsidy and other policy supports, rural India is already contributing to 45% of overall FMCG revenue and this figure is only going to move northwards.
Sales Force Automation solutions, initially pioneered by a few large FMCG companies, have now caught the imagination of a large number of small and medium enterprises across industries. The adoption of Sales Force Automation (SFA) solutions is now faster than ever before. Along this journey, more and more SFA solution providers have entered the market. Sales Force Automation itself has evolved and expanded into quite a wide topic – with different use cases and many different possibilities. Accordingly, now, the large number of SFA players in the market are generally equipped with some of the many different things that an SFA solution can possibly offer. Despite SFA entering this new realm of possibilities that look to maximize how it can benefit team productivity and the company in general, large number of companies are still confined to a very traditional and narrow use case of SFA – attendance and sales management.