6 Ways for Manufacturers to Optimize Their Distributor Network & Keep Them Engaged

For manufacturers across various industry verticals and sizes, it is an on-going struggle to ensure that their distributor network works seamlessly.

However, many manufacturers are still stuck with legacy systems and manual, paper-based transactions with their distributors, having absolutely no clarity of how their distributors are performing. This also results in a serious lag when it comes to managing the distribution order cycle.

To keep the distributor network lean and agile, it is important to optimize it from time to time with continuous improvement. And technology plays a very important role in taking the distributor management to the next level. With the right digital tools and technologies, manufacturers can drive a transformation in their distributor management with less dependency on manual efforts, real-time updates, and an optimized supply chain.

From the time a manufacturer receives an order to actually executing the last-mile delivery to the distributor, every step can be optimized to amplify the business impact.

Let’s talk about some common challenges faced by manufacturers in managing their distribution network:

  • Unorganized sales order management: Manufacturers don’t always get real insights into how the orders from the distributors are being managed or changing.
  • Lack of key insights into distributor performance: Manufacturers have no idea of which distributor is influencing the demand of which product and how. Many distributors still follow the traditional approach to managing demand, which results in piling up of dead stock.
  • Poor inventory management: In the absence of real-time inventory tracking software, manufacturers are left with poor inventory churn ratio and slower inventory turnover movement.
  • Longer claim management: For manufacturers with a vast network of distributors, the claim management ends up consuming a lot of time. Dealing with distributors over the phone and in-person takes away a lot of effort. 
  • No insight into demand fluctuation and market trends: The insights into demand fluctuations can help manufactures plan for seasonal changes or promotional strategies. However, gathering such insights often proves to be difficult.

With advanced technology solutions in the form of distributor management tools, manufacturers can improve every aspect of their distributor network for greater efficiency and productivity. Optimizing the supply chain network results in multiple benefits such as – it helps in maintaining just-in-time inventory levels based on market demand thereby enabling optimal usage of distributors’ warehouse space, maintaining the right stock levels, choosing the right transportation modes, and deciding the right warehousing strategies.

Let’s understand how the right distributor management solution can help manufacturers in keeping their distributors happy and engaged:

Automating Order Management

By giving their distributors a solution to manage their orders, manufacturers can play a great role in simplifying the cumbersome order management process. While distributors can change and update their orders at a click, it also gives manufacturers a complete idea of the orders coming in and any changes thereof. Distributors are sure to enjoy this flexibility without indulging in extensive phone calls or emails. It also helps manufacturers get complete visibility into primary and secondary stock and secondary sales.


Real-Time Insights

An automated solution helps the manufacturers, as well as the distributors, get access to real-time order updates. They can track order journeys in real-time, which helps in increasing their engagement in the buying process. Any delays, cancellations, or important updates are provided in a timely manner, without any missed information. Distributors can get better insights into market trends allowing them to make quicker business decisions. They can also get complete visibility into the visits made by their field force, helping them optimize their workforce management. 

Inventory Management

An automated solution enables distributors in better planning of their inventory. Effective insights into inventory levels help them plan better regarding their orders. With a better Inventory Churn ratio, they can achieve faster inventory turnover. For manufacturers, this helps in better production planning. The best part is that distributors can update their inventory without any intervention, which gives them more time to focus on crucial business aspects.

Returns Management

When managed manually, distributors cannot track returns easily. They lack the visibility against the current status of each order returns in real-time. Because of such lack of visibility, the stock is not updated, and returns are not credited to the dealer account in a timely manner. With an automated solution, return management becomes easy for the distributors. If there are any claims to be raised for return or cancellation, it can be done immediately through a mobile app, without delaying it any further. This ensures the stock is replaced or replenished in time so that the supply chain remains unaffected.

Information Flow

A technology tool enhances transparency in the system. By giving their distributors a digital interface, manufacturers can greatly optimize the flow of information between the two parties without any hiccups. All the order related planning and upgrades can be updated in real-time, which makes it easy for the two parties to collaborate. Everything is recorded in a central place, which saves a lot of time and effort on both ends.

Dynamic Pricing

By giving their distributors a system to offer dynamic pricing to their retailers, manufacturers can help them roll out targeted schemes. An automated solution can capture a lot of data points related to the distributors as well as the retailer demographics and buying behaviour. This enables the manufacturers and retailers to forecast the right demand and make manufacturing plans in accordance, as well as zero down on the right pricing model.

Conclusion

Using the right technology solution, manufacturers can get real-time stock status, ensure seamless order processing and execution, process more orders, better manage their production, easily distribute and fulfil for multiple products/brands/SKU, and get a single view of all orders from multiple sources.

It plays a great role in optimizing the overall supply chain. By giving their distributors the right technology tools, manufacturers can redefine the way they approach their business goals – staying on top of market trends and focusing on newer revenue streams. Most importantly, an automated tool empowers a single view of the entire distributor network channel that helps in making key business decisions.

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