Distribution Management Systems (DMS) are software applications that manage the core front office business activities from sales order processing, purchasing, and inventory management through to financial accounting. Unlike ERP and/or MRP applications, the DMS software application has long standing roots in distribution, and therefore provides a much higher degree of functionality specific to the needs of distribution companies. The business requirements of many distribution-centric companies can be so specialized that a cottage industry of DMS applications has evolved to address the challenges faced by distributors.
Retail distributors, wholesale distributors, and suppliers all move products to market but the software systems that are used to power these companies can vary significantly by industry vertical. This is because each industry has functional requirements that are specific to the nature of the products being moved. Some examples below serve to illustrate this point:
- In the automotive aftermarket industry, customers find replacement parts by providing information on the make / model / year of a vehicle. The distributor therefore requires a software system that enables a unique part to be identified by the combination of make / model / year attributes.
- In the apparel and footwear industries, customers can place orders for clothes by a matrix of color / style / size. It is not unusual for the distributor to determine the quantity break down within the matrix because the retailer places an order quantity for the aggregate sum of the product being ordered.
- In the health care industry, stringent requirements for cradle-to-grave product lot control must be supported to enable a rapid recovery in the event of a product recall. In fact, the unique serial number tracking of individual shipping entities throughout the supply chain can be a requirement that poses serious challenges to the companies that handle millions of shipments daily.
- Food manufacturers and distributors must satisfy product-specific code date requirements such that inventory is never shipped to a customer once it reaches a specific shelf life. This requirement becomes further complicated when each customer demands to have their own specific shelf life requirements respected.
- For wholesale distributors that supply big box retailers, failure to support is a myriad of customer-specific compliance requirements can result in expensive non-compliance fines. To further complicate matters, retailers are not consistent in their definition of EDI transaction requirements so that customer-specific EDI file formats need to be developed and maintained for sales orders, purchase orders, order confirmations, invoices, advance shipment notifications, etc.
- Industrial distributors often supply a massive catalogue of products to their customers and many of these items are non-stock SKUs. Competitive differentiation through value added services has evolved into a fundamental business requirement for many of these distributors. For example, an important value added service is vendor managed inventory whereby the distributor automatically tracks, maintains, and replenishes a customer’s inventory for each customer site. Often vendor managed inventory can require one or more daily deliveries to a manufacturing line to replenish just in time inventory and a small mistake can adversely impact a costly production operation.
- Retailers have complex store ordering and purchasing/inventory management challenges that must address seasonality, product shelf life, support for promotional activity, push and pull store ordering cycles, restricted store ordering, fair share inventory allocation, and a continuously changing product variety. The retailer’s ability to generate sales revenue with maximum inventory turns is predicated on having sophisticated demand planning / forecasting capabilities.
MWPVL International understands the unique distribution complexities associated with vertical markets and industries because we have worked with many companies to identify the important details that translate into their competitive advantage. MWPVL International has also cultivated an in-depth understanding of the application software market to ensure that our clients know which DMS applications are most suitable to their size of business and industry vertical.
MWPVL International works with suppliers, customers and business partners to provide unbiased consulting services that address the following types of questions:
- Which DMS software application is best-suited for our company, size of business, industry vertical, preferred computing platform and financial budget?
- Should our firm deploy a specialized distribution management system or an ERP system?
- What is the economic business case for investing in a DMS application? What are the total capital investment requirements including internal and external resource requirements? What financial benefits or competitive advantage can our company realistically expect to obtain from a new system?
- What are the main differences between the commercial DMS applications available within the market place? Which vendors should our company consider evaluating based on our operating profile and industry requirements?
- Is there a structured process that our company should follow when selecting a DMS application to ensure due diligence and to protect our interests?
MWPVL International provides strictly unbiased consulting services and trusted experience in helping companies with:
- Developing the economic business case and financial justification for a DMS application
- DMS requirements definition and RFP development
- Development of structured software demonstration scripts
- Vendor/solution evaluation and selection
- Software negotiation and acquisition
- Developing the project budget, plan, schedule, internal and external resource requirements for deployment
- Project management