Six Ways to Make Your Distribution Channel Tech-Driven

Distribution, one of the key elements of the marketing mix, plays a strategic role in a complex value chain that decides the future of brands. This is the reason that most organizations are serious about connecting the dots in their supply chain and optimizing the distribution network. They are constantly striving to address distribution challenges. Common problems like poor channel performance, operational inefficiencies, delayed solution offerings and information silos can result in lost sales, higher operational costs and a negative impact on margins and shareholder value – undoubtedly an undesirable situation.

To get over these challenges, organizations need to lay greater emphasis on technology-enabled distribution operations rather than simply squandering time in managing things the traditional way. MarketsAndMarkets' research points out how organizations are steadily working towards modernizing their distribution arm. According to the report, the Advanced Distributed Management System (ADMS) market is estimated to grow from USD 687.2 Million in 2016 to USD 1,788.4 Million by 2021, at a Compounded Annual Growth Rate (CAGR) of 21.1% during the forecast period.

In my opinion, keeping the above observations in perspective, six types of tech tools can prove to be effective for any distribution channel, thereby giving a fresh lease of life to distribution operations. These tools are already proving their worth by helping large organizations in India and globally streamline their distribution operations.

1.    Field Force Automation
Effective use of field force has always been a challenge, which if addressed appropriately, becomes a true differentiator in a globalized competitive market. Organizations are constantly working towards enhancing their overall efficiency and streamlining operations. This has boosted the demand for integrating field force automation solutions into their existing systems. Technavio’s research predicts the global field force automation market is set to grow at a CAGR of close to 13%.

Field force automation systems aid organizations in collecting field sales and services information in real time using smart and mobile devices. Also, the adoption of SaaS-based or cloud-based automation systems, capable of handling core service functions such as scheduling, parts, contracts and collaboration, has steadily increased over the past few years. Today these systems are more versatile and allow many field service tasks to be done from virtually any mobile device. With this functionality, organizations and customers can track reports, signoffs, work orders, voice of customers, competition mapping, manpower productivity, etc.

2.    Partner Management
In order to reduce financial overheads and the hassles related to maintaining a direct sales organization, most organizations rely on partner network comprising integrators, distributors, regional resellers, dealers, LFRs and many others. But enhanced sales performance only results when partners are adequately managed, trained and incentivised. Hence, a good partner management system is recommended. Unlike a CRM system, a partner management system helps partners to sell on your behalf and pitch your products more convincingly. Modern partner management systems often come embedded with easy-to-use, web-based self-service tools, and information and resources to assist resellers. It can also be enabled to manage partner registration and on-boarding, ensure accounting transparency, share product information, impart training and capture voice of partner (along with resolution close looping).

3.    Forecasting
A forecasting software helps predict demand for products and services, enabling organizations to improve production scheduling, inventory management, logistics, and financial planning. There are tools that can be deployed stand-alone or integrated into the existing ERP system. A completely automated forecasting tool helps customers in realizing their true sales potential, and helps in minimizing loss of sales due to inventory issues. Organizations can ensure that the forecasting systems they choose achieve higher accuracy, since the system has to help them in maintaining channel hygiene across. It will allow them to focus more on sellouts.

4.    Scheme Management
One of the key factors for a healthy channel management is scheme management. Having active promotions and loyalty programs are inevitable for the success of a brand through its partner network. Organizations can deploy a scheme management tool which can support a wide variety of promotional offers and which can, at the same time, be managed and controlled. There are scheme management tools that efficiently handle scheme calculations and communications in the partner network. These tools bring transparency to the system with least discrepancy in the entire scheme disbursement module.

5.    Pricing
While scheme management, partner management and forecasting can transform the distribution arm, a pricing management system can do wonders by maintaining the entire pricing structure, especially in case of e-commerce distribution management. This system helps organizations to set the right price and synchronize with global pricing, thus, maximizing profits. The right pricing tool can give wings to the sales strategy and add up to the profits. Sophisticated pricing tools monitor and compare prices across platforms thereby enabling and helping sales teams maintain a competitive edge.

6.    BI and Analytics
A critical step towards implementing tech-enabled distribution includes the usage of data analysis. Leveraging big data and converting it into actionable information to grow sales is fast becoming critical. The BI and analytics tools keep organizations informed about customers, prospects, business partners, suppliers, partners and competitors. The good news is that, unlike in the past, the new BI tools can manage, handle and analyse enormous amount of data and hence augment sales.

A BI engine, considering the supply chain and distribution network, should take into account the key factors – seasonality, demand, market growth, category growth, and brand performance, etc. A host of new-age BI tools drill down information at the national, regional, state, city and town level for every product thereby offering accurate insights into performance and in forecasting.

In essence, the deployment of these key tools helps utilities minimize their outage costs and increase the production efficiency through real-time monitoring and communication. The demand for distribution management systems has increased tremendously across all verticals. With the deployment of these tools, organizations can stay focused on reducing the leakages, cutting down on wastage of resources and increasing sales.

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The writer is Joint President - Consumer Distribution business, HCL Infosystems Ltd.