Distributors encounter the following common problems
Assortment often lacks goods/stocks that are in demand and at the same time, there is a large share of low-turnover goods lying as a pile of nonconvertible stock.
Suppliers dictate their terms and in order to survive the distributor has to defend their positions against imposed sales plans and product assortment, payment terms and deferrals, etc.
Warehouses are overstocked, but there is a lack in working capital, as large total reserves freeze funds.
Food distributors constantly face the problems with products returns and write-offs, and they are always tempted to blame someone else for that. However, if you once blamed the client, there could be a problem with the next batch of goods sold to the same client.
The company suffers losses as expired goods are written off or sold at give-away prices.
Inefficient transport use: to save on logistics, delivery is executed only when vehicle is loaded to the hilt. As a result, sales suffer.
How can distributor run a profitable business?Request a demonstration
The key function for distribution is an effective inventory management throughout the whole supply chain. The most effective methodology for inventory management is TOC (Goldratt’s Theory of Constraints) and its tool called the Dynamic buffer management (DBM).
DBM algorithm allows to avoid forecasts, and replenishes stocks according to the actual consumption:
- What should be ordered?
- How much?
- Where should inventories be located?
In-demand goods are always on hand with minimum inventories.
What we offer
Running diagnostics and revealing “bottlenecks” in inventory and assortment management
Holding a seminar training on Theory of Constraints methodology for the employees involved in inventory management
Creating the system of dynamic buffer management, that takes into account actual sales and demand fluctuations
Automating inventory management with ABM Inventory system
Providing methodological and technical follow-up
ABM Inventory is designed to calculate automatically the required stock level for each SKU at each stock location in accordance with actual demand fluctuations. Stock –M Inventory management algorithm is based on the Dynamic Buffer Management (DBM) method. Read more about ABM Inventory features here.
- Decrease in surplus level in the system by 30-60%. Release of operating assets.
- Reduction of unsaleable goods, write-offs, oversell volumes.
- Lost sales reduction by 30-60%. High level of goods availability minimizes lost sales, client’s loyalty increases.
- Minimum investments are required since the automated system is implemented within short timeframes, works according to SaaS scheme (system as a service), and provides quick return of upfront costs.