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A story of the first Vietnamese company to implement a distribution management system

February 07, 2021 | 22:35

"This system (Distribution Management System - DMS) has vastly improved our logistics and market intelligence (MI). It has made it far easier to detect patterns and improve efficiency", said Tan Hiep Phat Group Deputy CEO Phuong Uyen Tran.

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A story of the first Vietnamese company to implement a distribution management system
Phuong Uyen Tran and her father. Photo: Forbes

Sales is another big area my father is always keen to have visibility, over. Until the early 2010s, no one really knew what the department was up to, or whether they were selling what they said where they sai. We counteracted this oversight by implementing a distribution management system (DMS), becoming the first Vietnamese company to do so.

This system has vastly improved our logistics and and intelligence (EMI). It has made it far easier to detect patternss and improve efficiency. All our sales invoices are now put into this system.

It also helps us to manage our inventory better. As a rule of thumb, it gets prohibitively expensive to maintain inventory cover above the 90 percent mark. THP does not do this, but we do try to maintain 100 percent inventory cover for our most popular brands. It is always a work in progress. But it is unusual for us to get caught short on key lines.

My father has a massive dashboard in his office where he can monitor what is being delivered and where on a daily basis. Trucks have GPS trackers. We even upload photos of the smallest shop onto the DMS. This not only helps us check whether the signage and advertising are correct but also whether the shop even exists.

He soon realized that a number of the photos were fakes, and about a year after we implemented the DMS, we hired seventy investigators to audit the sales team. For every fraud they uncovered, we promised to pay them 50 percent of the penalty we imposed.

Within one month, they had uncovered three hundred thousand misrepresentations by various members of the sales team. The responsible person was fined the equivalent of about $10 per fraud. Some team members ended up having to repay two to three months' salary.

By the second month, the number of frauds had dropped to 30,000, then 2,500 by month three, and only 300 by month four. By this time, none of the original sales team was left. They had either resigned or been fired.

This 100 percent turnover rate was replicated twice over before we finally found a team that understood crime does not pay. My father likes to quote a famous Asian proverb: "Sometimes you have to kill the chicken to scare the monkey."

A story of the first Vietnamese company to implement a distribution management system
Phuong Uyen Tran. Photo: Zingnews.vn

Integration of technology into your business is inevitable. Determining how and what to implement is what needs to be continually addressed. My father always knew as THP got bigger it would only be able to compete with the multinationals by deploying the same or better technology. Deploying technology can and will always feel like a bold investment. If not done strategically, it can be a source of financial and operational stress. However, if leveraged correctly, it can be a strategic differentiator amongst competitors and make things more efficient internally.

In the past few years, especially in 2018, Tan Hiep Phat and Phuong Uyen Tran are among Vietnamese names in the field of business that appear the most on international media because of their stories inspiring co-startups as well as millions of consumers around the world.

That Forbes first published the book “Competing with Giants” by a Vietnamese businesswoman has help promote the name of “rich man” Tan Hiep Phat.

Afterward, in the minds of many consumers, each water bottle is not only a drink but a crystallization of the desire to overcome difficulties and the spirit of entrepreneurship, an organic trend and Vietnam of miraculous stories.

And also from this book uncovered the aspirations of Tan Hiep Phat, as Mr. Hiroshi Otsuka, President and CEO of Musashi Seimitsu said: “An unmissable insight into how and why Vietnamese businesses are quietly growing into global players.”

SOLUTION

A review of its existing decentralized Microsoft Dynamics unveiled THP’s reservations about the accuracy of the reported data, which were consolidated at the distributors’ end. With a server and client license required for each THP distributor, it also proved to be highly prohibitive cost-wise. There were also concerns with security and data integrity, as the same administrative password was used by its distributors for system access.

In 2013, THP decided to invest in a centralized platform to gain real-time visibility and accurate understanding of market demand, distributors’ sales performance and their capacity

About author Phuong Uyen Tran

Working as a powerful businesswoman, Forbes published author, Phuong Uyen Tran is a model of success in Vietnam. Phuong Uyen Tran is also a special contributor for Vietnam Times. Her writing, including “Competing with Giants" book, and her latest articles are to advise and inspire young people to start-up, overcome challenges and reach out to the world. It is the story of a little girl taking the great responsibilities for a corporation and devoting herself to society.

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