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How to Reduce Costs & Increase Cash Flow for Distributors with an Auto Replenishment System
by Harshit Bora
Auto Replenishment System (ARS) is an inventory management process which helps in maintaining the desired levels of inventory at the customer end without hurting the freshness of goods and cash flow of the customer. We achieve it by setting up norms (inventory level) for every customer-SKU combination and replenishing the customer based on their sales.
The Indian retail market is highly competitive. It is, therefore, imperative to service retailers regularly to gain a competitive edge. While distributors and brands aim at improving customer loyalty continuously by offering good service, they struggle to reduce costs to stay competitive. An Automatic Replenishment System can play an important role here. Bizom’s ARS helps in reducing inventory, out-of-stocks, expiry returns and the amount of time spent in placing manual orders. Bizom’s ARS help in increasing stock availability, cash flow for distributors and efficiency in depo-distributor operations.
1. Improve Range & Stock Availability
ARS system helps brands increase the range at the distributors without piling on unnecessary stocks. It also helps increase the availability of all desired inventory and consequently reduces stock-out situations by 85%.
2. Enable the Sales Team To Focus On Market Operations
The main task of the sales team is to focus on servicing the retailers without worrying about supply. When you take off the supply part from the salesman’s mindset, we have observed that their productivity increases by 30%.
3. Improve the Freshness Of Inventory
Increased availability of desired goods at times can lead to some stocks becoming dead stocks. Bizom’s ARS gives brand owners real time visibility of the stocks at the most granular level. It also doesn’t let salesmen order goods on basis of his/her discretion which have often led to staleness of stock. ARS helps organizations reduce expiry returns by around 40%.
4. Lower Inventory Costs With Optimized Allocation
ARS helps distributors to reduce the investment in stock by allowing them to place orders repeatedly as per the norms. This helps distributors to rotate their capital and increase their ROI effectively. Bizom’s ARS solution allocates stocks to the distributor as per the stock norms and availability of the stock at the depo/warehouse. This reduces the discretion that is generally used by the depo managers.
5. Optimization Of the Logistics System
50% of bills are cut at the depo/warehouse in the last week of the month. This puts tremendous pressure on logistic operations. With ARS, last week’s billing skew improvement will lead to the optimization of logistic operations as well as fund rotation for the distributor.
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