Distribution Company Business Process in Indonesia

The product distribution model has 3 levels, namely:

• Manufacturing,
• Distributors
• Retailers.

Distributors buy products directly from Manufacturers and sell them to Retailers. Therefore, distributors need a selling price strategy to generate sufficient margins and an effective promotion strategy to increase sales.

Distribution companies typically have the following business processes:

• ORDER TO CASH
  Order to Cash in distribution companies consists of 2 schemes: a) Taking Order and b)     Canvassing. The Taking Orders Scheme has the following process sequence:
  Sales Call → Taking Order → Sales Order Approval & Credit Verification → Delivery Order → Loading to Vehicle → Sales Shipment → Sales Invoicing → AR Collection → Collection Receipt.
  Note: At FMCG distributor companies, AR Collection is usually done simultaneously with Taking Orders when Salesmen make Sales Calls to customers. For delivery of goods to GT (General Trade / Traditional Market) customers, Sales Invoices are usually printed earlier and function as a document for handing over goods to customers.
  The Canvassing Scheme has the following process sequence:
  Replenishment to Vehicle → Sales Canvassing → Sales Invoicing → Collection Receipt.

• PROCURE TO PAY
  Procure to Pay in distribution company has the following process sequence:
  Purchase Request → Purchase Order → Receiving → Supplier Invoice Verification → Payment Run → Release Payment.

In addition to the two business processes above, distribution companies need inventory management, sales prices, and promo & claim management to have the economic stock-on-hand quantity, minimize bad-stocks, calculate claims to principals accurately, and generate better margins.

Orlansoft has the complete solution for distribution companies ranging from Orlansoft SalesMate, Orlansoft DriverMate, Orlansoft Numbering, and Orlansoft ERP application products.

Orlansoft Sales Price & Promo makes selling prices and applicable promos easy. End-users only need to enter the order quantity, then the selling price, regular discounts, and promos will be calculated automatically. This feature will eliminate the risk of miscalculating sales invoice values, due to the manual entry of selling prices, regular discounts, extra discounts, and bonuses.

Orlansoft Promo Claim makes it easy for end-users to get claim reports to principals for every running promo code. Every promo in the form of extra discounts or item bonuses on sales invoices is always posted to the System Generated GL Journal and the company’s financial reports, eliminating the risk of end-user negligence in billing promo claims to principals.

Orlansoft Empty Container automates transactions for receiving and dispensing empty containers such as empty bottles, crates, & empty gallons to make it easier to monitor the number of empty containers for each customer.

Orlansoft Lot & Shelf Life helps end-user warehouses only accept products from suppliers that meet the permitted shelf life and only issue products with the allowed shelf life when sending goods to customers so that the risk of bad-stock in the distributor’s warehouse is minimal.

Orlansoft Collection Run, integrated with Orlansoft SalesMate, makes it easy to validate cash received by Salesmen when making Sales Calls. Handling cash collection results from the salesman to the cashier at the branch office or depot can be done in less than 1 minute per salesperson.

Orlansoft Multiple Entity and Multiple Site provide features that make it easier for companies to replicate business processes quickly so that the preparation & implementation of the system for opening a new branch office or depot requires 1-2 weeks only. The Orlansoft Multiple Entity features also provides financial reports for each branch office with real-time branch office performance reports.