Integrated Sales & Distribution Business Intelligence – today’s luxury, tomorrow’s necessity

FMCG business managers, from the CEO down to sales supervisors, need practical tools to manage the growing complexity of their sales & distribution networks. Without the capacity to rapidly acquire (and share) a picture of what is going on, it is near impossible to drive the sales performance and cost cutting required to win in an increasingly competitive marketplace.

Integrated Business Intelligence (BI) occurs where the tools used incorporates specific functionality, analytics and market dynamics that are core to FMCG sales and distribution management – both tactical and day-to-day. Without embedding these specific needs, corporate BI offers limited operational value for the Sales and Supply Chain Directors responsible for driving sustainable growth.

What happens when there is no integrated BI?

In a recent survey conducted on supply chain information flow in British businesses (including the manufacturing, retail, wholesale and distribution sectors), it was revealed that:

• Spreadsheets and paper trails dominate, and a conservative estimate of the total cost to business in man-hours needed to manually manage this information is £77 million pa
• 1 in 2 companies says that fragmented information has resulted in missed sales opportunities, which amount to a staggering £1.2 billion pa for relevant British companies.
• 88% have found their company unable to supply peaks in demand created by sales and marketing activities in the past 12 months, and on average, 1 in 5 campaigns (22%) have resulted in an inability to supply demand.

We don’t know of any similar survey done in emerging markets, but with greater growth and more complex distribution networks, the relating losses in opportunity cost will be proportionally greater.

Pre-requisites of integrated BI for FMCG Manufacturers

The right integrated BI tool effectively controls the sales and distribution networks, while providing forward vision for future planning. However, for Asian businesses, it must usually meet the following criteria:

• Low initial cost outlay. With technology becoming more affordable, BI in the form of SaaS means no server, hosting and other costs. Users just need a web browser and pay subscription to start.
• Low cost, real time data transmission. Smart use of the internet provides the advantage of (cost effective) speed in analysis and response.
• Integration through logical workflows and processes across the sales and distribution networks, supporting operational disciplines where every step and process is traceable and measurable.
• Presentation of information in the precise formats required by the respective managers. The solution also needs to have the ability to cleanse and synchronize data that comes from multiple sources.
• Simple to use even for users with limited technical aptitude/training.
• Easily integrated with corporate ERP and distributor (in-house) systems
• Tangible ROI within 9 months.

Barriers to change

Our observation is that Asian FMCG improvements in customer service and market penetration have been extremely erratic. In part, this is because of the challenge of sustaining a focus on these issues with existing toolkits – and in some cases, existing mindsets.

Many companies are still not aware of low cost SaaS as a BI option. The top of mind solution is often standard ERP software or over simplistic connectivity tools (relying on distributor’s ability to supply template data from their own systems). The former is costly, the latter fails to deliver the visibility and control required. There is also the fear of ‘biting off more than you can chew’ in terms of the management bandwidth required to drive through the upgrade. A quality SaaS solution from a quality provider can overcome all these challenges.

To find out more about BI for emerging market, visit: http://www.lucialink.com/bi/index.php.

For queries, please email info@logisticsconsulting.asia