Dairy is one of the most critical sectors globally, providing millions of people with daily sustenance. But because of its complexity and constant evolution, it requires efficient and streamlined distribution management to meet the demands of both the consumers and dairy farms. As a result, the industry has undergone significant transformations in recent years to integrate technological advancements.
Despite the growing number of innovative technologies, the dairy industry continues to face numerous supply chain challenges, including low productivity, poor milk quality, and inefficient supply chain management. Surprisingly, approximately 80% of farms still rely on manual operations, often using pen and paper. There is a lack of visibility in the supply chain system, which is causing hurdles.
What the industry needs is a distribution management solution that can deliver a real-time view into the supply chain, with real-time tracking and data analytics features that will enable the dairy sector to detect potential issues and ways to swiftly overcome them in the distribution process.
What is Distribution Management Solutions (DMS)
Distribution Management Solutions (DMS) are software tools designed to optimize distribution processes in the dairy industry. They include functionalities like warehouse management, inventory management, order management, transportation management, and route optimization. With DMS, businesses can minimize waste, ensure timely delivery, and enhance operational effi ciency. Additionally, it provides a comprehensive solution for managing complex distribution networks, ensuring quick and cost-effective product delivery.
Why Does the Dairy Sector Need Technological Development?
In India, the dairy industry is tagged under the unorganized sector. In other developed countries, about 90 per cent of surplus milk is handled through the organized sector wherein India records only 40 per cent. Because it is highly unorganized, the use of technological advancements has also been minimal, resulting in challenges such as high wastage and inconsistent quality and quantity of milk for many small farmers.
While private farms opt for advanced technology solutions, most of it is for cattle management and their health and hygiene. There is no solution that maps real-time visibility into the entire life cycle of a bottle/pouch of milk, a can of yoghurt, paneer, or other dairy items that leaves the facility to reach a grocery store or the customer’s doorstep. Farms do not have visibility into returns, spillage, or even spoilage. This situation is alarming because technology is available now.
How can Distribution Management Solutions (DMS) help the Dairy Industry
Distribution Management Solutions (DMS) have revolutionized the dairy industry by effectively addressing its key challenges. These solutions have played a pivotal role in transforming the industry, enabling companies to reap significant cost and margin benefits. Amul, a renowned dairy brand operated by the Gujarat Cooperative Milk Marketing Federation (GCMMF), serves as a prime example of successful DMS implementation. By adopting a DMS, Amul has successfully streamlined its supply chain and distribution operations, optimizing efficiency and effectiveness.
Similarly, Dairy Farmers of America (DFA), one of the largest dairy cooperatives in the United States, has harnessed the power of DMS to effi ciently manage and track deliveries, optimize routes, and streamline distribution processes across an extensive network of dairy farms and retail partners. DFA’s utilization of DMS showcases the industry’s commitment to enhancing distribution operations and overall efficiency.
These examples highlight how DMS has become an integral part of the dairy industry, facilitating crucial improvements in distribution management. By leveraging DMS, dairy companies can address operational challenges, boost productivity, and ultimately enhance customer satisfaction. The widespread adoption of DMS underscores its significance in propelling the dairy industry forward.
Let’s understand some of the key areas in how DMS is helping the dairy industry.
1. Delivery Visibility: DMS solutions offer real-time visibility into the delivery process, enabling dairy companies to track their products’ delivery status. This feature ensures that the products are delivered to the correct customers appropriately, reducing spoilage and wastage.
2. Shelf-Life Management: Due to the limited shelf life of dairy products, dairy companies need to ensure that the products are delivered to customers quickly to maintain their freshness. DMS solutions assist companies in managing dairy product shelf life by prioritizing deliveries based on expiration dates, reducing spoilage, and wastage, and enhancing customer satisfaction.
3. Inventory Management: Maintaining an optimal inventory level is critical for dairy companies to meet customer demand while reducing wastage. DMS solutions assist with inventory management by tracking product movement in real time, enabling companies to maintain optimal stock levels
4. Cost Reduction: DMS solutions can help dairy companies lower costs by optimising delivery routes, reducing fuel costs, and minimizing product wastage. Dairy companies can optimize their processes and lower operational expenses with transparency and control over operations.
5. Enhanced Customer Satisfaction: DMS solutions can increase customer satisfaction by providing accurate and timely deliveries. The solution enables companies to provide customers with accurate delivery times and update them in case of delays, resulting in a better overall customer experience and increased loyalty and repeat business.
Distribution management solutions (DMS) are reconstructing the dairy sector by adding efficiency to supply chain and logistics operations. By providing real-time data and analytics, these solutions enable dairy companies to make informed decisions that improve their overall performance and achieve profitability. With careful planning and execution, the dairy sector can overcome its challenges and improve operational efficiencies. The only barrier to growth is their mindset which needs to change. For the growth of the business, technology is available.
The writer is Founder & CEO of Mr.Milkman by Ever.Ag, a Gurgaon-based cutting-edge SaaS platform for the dairy, agriculture, and F&B industries.
The article is published in the August Edition of Progressive Grocer magazine 2023. To read more such articles, subscribe HERE
