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Top 8 Benefits of Distribution Management System 2024

Suppose you are an entrepreneur and have established a business with a large retail sales channel; however, to your dismay, you are finding that your sales channel is not performing up to the mark and lacking efficiency.

The biggest problem is, that you are not able to find out the reasons for your sales channel’s reduced efficiency. Your overhead costs are going high and ROI is getting lower day by day. You are frantically searching for a solution, but not finding any suitable one.

Now it is our pleasure to inform you that certain software systems are designed to solve this particular retail sales channel management challenge of yours. This article will shed light on the benefits of using this sort of system that will show you the way to find a suitable solution that fits your requirements best.

The first direction is very simple, to solve your retail channel/distribution sales-related challenges, you need a distribution sales management system or retail channel management system software. 

The Distribution Management System (DMS) manages and monitors the entire distribution sales network, including activity monitoring of the field sales team, order collection, delivery management, inventory management, and payment collection. 

You can maximize your profit by using such a system to plan and manage your entire retail/ distribution sales channel.

Why Do You Need to Understand Distribution Management

What is a Distribution Management System?

The distribution management system is one of the major functionalities of the Sales Force Automation System. Salesforce Automation (SFA) applies to a software system for sales control and managing your business strategy.  The sales force automation system is divided into two main functionalities-

  • DMS (Distribution Management system): To cater to distribution / retail sales channel management needs; and

  • CRM (Customer Relationship Management): To cater to direct sales channel management needs

CRM (Customer Relationship Management) is a system to help the direct sales process that manages all customer communications across all segments and channels from a single platform. 

CRM system helps the business by providing the facilities of staying close to your customers.

On the other hand, the Distribution Management System (DMS) is a platform that is easily able to manage your whole retail channel management system step by step. 

In a distribution sales setup, your products move from central warehouses to regional depots to dealers to retailers; DMS automates this whole process. DMS also automates the sales team visiting process to optimize their performance at all steps of the sales team’s journey.

Distribution management involves various activities of the supply chain process namely packaging, warehousing, distributing, and delivering along the whole logistics chain. 

The distribution management system is a crucial part of any company that deals with retail sales; namely retailers and wholesalers. The DMS system is designed to increase your business efficiency and productivity in your distribution channel.

Why Do You Need a Distribution Management System?

Distribution management is important for a business’s commercial success and corporate sustainability. The larger a company or the higher the amount of stock features a business has, the higher it will require to efficiently manage the distribution method. 

Most growing businesses want to optimize their distribution management process to gain a competitive advantage in a tough business environment.

The distribution management system gives advantages to all interested companies, i.e. companies, wholesalers, and retailers. They don’t have to bother regarding problems like late or first orders position, slow delivery, including missed deals.


Top Benefits of Distribution Management System

Distribution involves different activities such as inventory packaging, transportation, warehousing, and supplying to different stakeholders. It also involves supplies administration, along with the plan, warehouse, store location planning, and the integration of sales information.

Here are some of the benefits of the Distribution Management System:


1. The Distribution Management System is Convenient for the Customers and Retailers 

The distribution management system guarantees that purchasing is available for every retailer. A manufacturer can easily help the retailer pick from various names of available stocks easily and more efficiently. 

Having a good DMS solution means that the manufacturer can more efficiently identify the gaps in the current inventory level at distribution houses and retailers and take action to fill up those gaps proactively.

By using a good distribution management system software a business can provide full satisfaction to its retailers/ distributors by making it easy for all the parties to do business. 

The distribution management system is very convenient for manufacturers and helpful for significantly controlling the whole retail channel system of a business.

Using a good DMS solution also ensures that the customers never have to leave empty-handed from the retailers due to the non-availability of stocks. 

By using such systems, a manufacturer can more easily predict the sales flow of each retailer and offer customized promotional offers for each segment of customers. 

Create a dealer plan

2. Manage dealers more effectively and efficiently

All retail-based businesses require a Distribution Management System that satisfies their particular type of needs. For example, distributors in the food business require the expiry date code for any stock to understand the validity of usage for each product/ batch. 

By using DMS anyone can simply store and examine all data associated with the sales teams, wholesalers, and retailers and make data-based decisions to optimize their sales operations.

Businesses find a DMS fairly simple to operate and it results in decreasing the manpower needed, conserving time and money, and also considerably decreasing operating expenses. As a result, it dramatically reduces processing time and management costs. 

As productivity gains, your return on investment (ROI) improves as the cost of managing your sales channel decreases, and the productivity of your sales team increases if you can properly plan and implement a DMS in your business sales channel

Inventory monitoring

3. Easy Inventory Monitoring Process By Using DMS

A good distribution management system software provides automated inventory administration. A business can simply monitor inventory at different distributor warehouses by using this system. 

This is very beneficial because businesses that use the distribution management system can more quickly decide on which products to send to which warehouses as per the latest demand and gap scenario. The businesses will also get-

  • Perfect order forecasting

  • Real-time product data

  • Data-driven analysis of the supply and demand forecasting

Having a good DMS in hand, the product flow forecasting efficiency will be much higher and the possibility of a mismatch between supply and demand in the distributor/dealers’ houses will decrease by a significant margin.

4. Improve the Efficiency Day by Day with Distribution Management System

With DMS software distributors and retailers are benefiting from the time reduction of order and delivery and transparency of transactions. The delivery of inventory is executed more efficiently, as the correct amount of items required can be ordered at the right time. 

Giving a distributor and retailer the comfort to do business with you motivates them to purchase your products repeatedly, which leads to better revenue and profits for your organization.

As your company and business grow, with the added workload to manage your distribution channel, you may need to hire new resources to manage the channel operations. 

However, DMS software can handle this workload easily without needing to increase the headcounts, which will directly impact the daily efficiency of your business operations. 

Apart from reducing the workload of your team, this system will improve workplace comfort and provide your team members enough space to run for other priorities too.

5. Overcome the Extra Cost

As mentioned in the previous point, by using good distribution management software you simply can reduce the extra costs of your business. Your business incurs a lot of costs to hire and retain the extra people as your business grows. 

Using good DMS software saves you from that cost by optimizing your headcounts and reducing workloads by automating the process.

Distribution management software can save an organization a significant sum of cash by eliminating the requirement of engaging extra resources to keep track of sales and inventory.

This system will also reduce the workload of people to accurately forecast and plan the business operations, further reducing the headcount which otherwise would require engaging a number of human resources to manage. 

Thus a rightly implemented DMS software manages to overcome the extra costs of a business that involves retail channel management.

Save your time

6. Save your Time with a Distribution Management System

The distribution management system will not only save money but effectively save time as well. This system helps your company from losing time on common tasks that could be quickly automated such as inventory and accounting.  This system also enables you to concentrate on different areas that require more value for you.

A distribution management system can streamline your methods, and help save your time. However, the management has to smartly pick the right solution that fits their business requirement.

7. Accurate Visit Report and Order Management

Upon setting up warehouses and distributors in the required areas, the next important task is to connect the retailers with the distributors and subsequently deliver the products to retailers. 

As per the standard distribution process, the SR (sales representative) collected orders from retailers and shared the information with the distributors. The distributor’s delivery associate then transports the products to the retailer outlet.

A seller has to visit a number of designated outlets to collect orders and meet his daily targets. However, the problem lies in the method of how the SR chooses to visit the retailer outlets. 

Quite frequently, the SRs choose the outlets that are more comfortable for them to visit irrespective of whether the outlet has any potential to place an order that day.

A smart distribution management system combines multiple automated processes to monitor the activities of the field-level sales team. It also enables the SRs to collect orders much faster than the usual pen and paper-based systems and report the sales on the go. Using this system also saves them the time and hardship of accumulating all the sales data and reporting them through manual counting. 

Increase business accuracy

8. Increase your Business Accuracy

A rightly implemented Distribution Management System enables businesses to place orders and subsequently predict the future order flows from a particular retailer, dealer, or zone. This accurate forecasting will optimize your revenue, profit, and profitability. 

Using this system will enable you to make data-based decisions based on exact sales and delivery data up to specific numbers and minutes. This will help you to make optimized uses of your resources that will lead to further business efficiency.

The Distribution Management System will save a lot of time and money for your business. Using this system will benefit the full value and all the stakeholders starting from manufacturer to distributor to retailer.

distribution management system Wrapped up 

Everyone believes that time is money, and a smart distribution management system can save both time and money. This is a system that can provide you with a systematic way to control your whole sales channel. The further you sell, the higher profit you make, which suggests a greater future for the business.  Having a strong distribution management system is also essential for companies to increase market competitiveness, create a super-efficient sales and delivery channel, and increase stakeholder comfort in doing business with you!

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