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 and replenishment management throughout the whole supply chain. The most effective solution for better distribution business efficiency is DDMRP (Demand Driven Material Requirements Planning) and its demand driven model.
DDMRP helps dealing with inaccurate forecasts and replenish goods and package materials due to the actual consumption:
- What should be ordered?
- How much?
- Where should inventories be located?
- Allows an accessible and “transparent” process control
DDMRP significantly increases the availability of goods, not by increasing safe stocks, but by optimizing the supply chain, which leads to an overall decrease in inventory. Customer service time is reduced, customer loyalty is increased, turnover is accelerated, and the need for storage space is minimized.
The required product is always avaliable, and inventory is minimal.
What we offer for distribution inventory management
Running diagnostics and revealing “bottlenecks” in inventory management
Organize a seminar training on DDMRP methodology for the managers and leaders involved in inventory replenishment management
Creating the system of dynamic buffer management, that takes into account actual sales and demand fluctuations
Automating inventory replenishment management with Replenishment+ system
Providing methodological and technical support
The Replenishment+ system is designed to automatically calculate the required inventory level for each SKU, at any storage point, in accordance with the actual fluctuations in demand. Replenishment+ is a software, built on a method to model, plan, and manage supply chains to protect and promote the flow of relevant information and materials. Read more about the capabilities of the Replenishment+ system 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.
- Service level increase up to 97-100%
- 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 ROI.