Each and every product that we reluctantly use in our lives has to go through a certain process and has its own way of embellishing itself as a product or a service. Just as a life cycle of a living being, these products, too, have a life cycle of their own, and it is carried out systematically and methodically throughout and distributed to the end customers through various parties.
Hence, this process or system is known as a distribution management system. A distribution management system implies the management process of distribution among various parties such as manufacturers, distributors, pre-sales, van-sales, merchandisers, retailers and finally to, the end-customers. And if this distribution system is mismanaged, it would create a lot of conflict inside a business.
So, keeping aside the negatives, let’s check up on why your company ideally requires a proper distribution management system.
13 Reasons why your company needs a distribution management system.
Here are 13 reasons why your company requires a distribution management system:
1. Systematic and methodical
The foremost thing that might leap into one’s mind when a distribution management system is considered is that it is pretty much systematic and methodical, and yes, it is! When it is a business or a certain organization, it is vital to have a system which is well-organized in order so that the retailer or whoever the end-customer, too, becomes satisfied.
Suppose the distribution management is not systematic, methodical or not highly organized. In that case, the complete business system might collapse because it’s in the hands of the distribution management system to distribute the products or the services among the needed end-customers. But, on the other hand, if it goes out of hand, it might not be the case.
2. Increases productivity
Just imagine that your company does not have a distribution management system.
Then, how would you answer the following questions?
- When should we hand over the products to our customer base?
- How long will the stocks be lasting, and should we consider distributing them?
- Where are we going to store all these products?
- Which customer ordered this product?
- Where is the location that we need to deliver this product?
It’s a whole mess, isn’t it? Unfortunately, we will just have to sit by and stay confused for an ample amount of time with these thoughts; hence time put in to make a revenue is wasted, and productivity becomes null.
Nevertheless, having a distribution management system will encounter these questions and increase your productivity as well as save your time in the most efficient way. It would not be a mess anymore to figure out the right answers productively.
3. Satisfied customer base
“It takes months to find a customer, seconds to lose one”-Vince Lombardi.
And now, this implies how tactful it should be, how hard it is to retain a fully established loyal customer base, and how important the customers are to whatever the business; if there are no customers, you’ve got no business to deal with.
A satisfied customer base has many factors to consider. Yet, convenience and how easily the product can be purchased are among the most important aspects that could satisfy your customer base.
Let’s consider an example. Visualize that you are the customer of one of the best face wash products, and you can buy it from the nearest store from your premises, also, think that there is no shop near or an online method to buy that particular product, and it’s too far. In the second instance, you would try to skip to the product near your hands rather than go far just for that product, isn’t it?
As you can observe, customer satisfaction through customer convenience is of utmost importance, and that is one of the key benefits which you achieve through a distribution management system.
4. Products do not go to waste
It is important as a business to provide the best products to the customers and ensure that the products are not expired in the distribution process.
If there is no proper distribution management system, stocks might be in excess or may even get expired since there is no appropriate way to analyze them.
Yet, having a proper distribution management system will help you to analyze which products are out of stock, which products need to be stocked, the amount that needs to be stocked on a specific day, and even getting it delivered to the right people without getting the products expired.
5. Proper financial management
If there is no proper financial management, there will be no long run for a business. Yet, if your company has a distribution management system, it will contribute to productivity, as it was mentioned previously. In turn, this will save time for unnecessary tasks, and even the manpower would be much lesser.
Furthermore, since it is highly doubtful that products will go to waste when having a distribution management system, not having a waste of products would also help in managing the costs as an asset to the company rather than not having a distribution management system.
6. Increased risk mitigations
Identifying viable future risks that a company might face is an important aspect for a business if it needs to grow and enhance in criteria of distribution.
Identifying the competitors, facing natural disasters during the distribution process, and if there is a problem that the products are not being delivered to the right customer could also be resolved through access to a proper distribution management system. In this way, future risks can be mitigated effectively and consciously in the most appropriate and ideal way.
7. Inventory management
Having proper distribution management counts for having easy access to manage inventory which is required for the product to be much more effective and concise.
An ideal inventory management system would be able to fill in the gaps in a business following up with an automated system of inventory administration which will help the business or the organization in future cost estimates, the delivery time and even tackle the analyzing of data more precisely without being a burden.
8. No bulk of products.
What if the retailer or the consumer has to take up a lot of space to store a bulk of the same product in their shop premises? Would that be ideal or not? Yes, it just does not seem to very ideal. The shop is a shop, not a storage house. And this is another reason that you need to have a proper distribution management system. When the business comprises a proper distribution system rather than no distribution management system at all, the retailer or consumer will not have to be worried about storing a huge bulk of products in their shop and making the place a huge mess.
Through this system, they would be able to store just a few amounts from the same product because when the stocks are about to go out of stock, there will always be a method to restock the products if you have a distribution management system.
9. Managing orders
Managing orders accurately is one of the important tasks which a business needs to possess cautiously. Having a distribution management system to manage the orders will help you to avoid losses that you may incur.
It will prompt sales and prevent you from missing out on specific sales from which you might get huge profits. Moreover, you will not have to worry about early or late order placements or not sticking to tight deadlines. And all this is because of one whole system of distribution management system.
10. Organized monetary assets
What do you think is the ultimate goal of a business? Yes, no matter what goals are in the step-by-step process, by the end of the month, it is about the business gaining profit and revenue.
Through a distribution management system, just as much as financial management will be possible, it will be easier to organize the company financially as well. It will not be much of a burden since the revenue will be added to the systems then and there.
11. Collaboration with different parties
Having a mutual relationship with the other parties, which is to be involved or already involved, is crucial for the growth of a business.
In order to maintain this relationship and to collaborate mutually with the business parties, such as the manufacturers, suppliers, merchandisers, retailers, and end-consumers, a strategical and methodical way is required. And one of the best ways to encounter this is to have a stable distribution management system.
12. Accurate report analysis
Since everything is well organized from the start-up when the distribution management system is included, it will be much more precise and accurate when it’s time to analyze the business reports throughout the months, days or years. This will also, in turn, help in business forecasting, directly contributing to the enhancement of the business.
13. Minimized flaws
Last but not least, all these aspects will lead to minimized flaws which again contribute to the growth of the organization or the business.
We hope that you got a deep insight into why you need a distribution management system integrated into your business through reading simplr’s article. And to know in detail about distribution management systems, read “what is distribution management system” on Simplr!