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Custom ERP for FMCG Distributor

Replacing a legacy system with a custom ERP for complex distribution chains.

FMCG & Distribution
2024
8 months
Overview

This large FMCG distributor managed hundreds of SKUs from dozens of principals, distributed to thousands of outlets through a multi-warehouse network across several provinces. Their legacy ERP system was over a decade old: slow, difficult to customize, and maintenance costs kept increasing every year. But replacing an ERP is not a light decision. This is the operational backbone that, if mishandled, could cripple the business. We were asked to build a custom ERP that fits their way of working, not the other way around.

Why Custom, Not Off-the-Shelf?

This question always comes up and rightfully so. Before deciding to build custom, we evaluated several ERP solutions available on the market. The result: none fit. FMCG distribution businesses in Indonesia have unique characteristics rarely accommodated by global ERPs: tiered discount schemes that differ per principal, complex return systems, varying credit terms per outlet, and the need to operate in areas with unstable internet connectivity. An off-the-shelf ERP would require so much customization that costs would exceed building from scratch, with greater vendor dependency risk.

Distribution Business Complexity

Multi-warehouse with different stock allocations

Each warehouse had different stock allocations based on coverage area and demand patterns. Inter-warehouse transfers had to be smooth without losing visibility.

Hundreds of SKUs with different rules

Each principal had their own business rules: minimum order quantities, tiered discount schemes, return policies, and varying payment periods.

Field salesmen with limited connectivity

Sales teams operating in rural areas needed the ability to input orders and check stock even when internet connectivity was unavailable.

Legacy migration without downtime

Operations could not stop for even a single day. Migration had to be done gradually with zero data loss and minimal disruption.

Solution Architecture

Multi-warehouse inventory engine

A centralized inventory system with per-warehouse allocation capability, real-time transfer tracking, and automated reorder points based on historical demand.

Configurable business rules engine

A rules engine allowing per-principal business rule configuration without coding. Admin can set discount schemes, minimum orders, and return policies through the interface.

Offline-first mobile app

A mobile app for salesmen that operates fully offline. Data automatically syncs when connectivity is available, with intelligent conflict resolution.

Phased migration strategy

Migration done per module, per warehouse. Starting from the smallest warehouse as pilot, then gradually rolled out to the entire network with parallel running at each phase.

Development Timeline

01

Business Process Deep Dive (Month 1)

We deployed our team to warehouses, joined salesmen in the field, and sat with the finance team to understand every nuance of business processes. This documentation became the development blueprint.

02

Core Module Development (Months 2-4)

Development of core modules: inventory management, order processing, and invoicing. Each module was intensively tested with real data from daily operations.

03

Mobile App & Offline Capability (Months 3-5)

Parallel development of the mobile app for salesmen with offline-first capability. Testing was done in areas with the worst connectivity to ensure reliability.

04

Integration & Reporting (Months 5-6)

Integration of all modules, development of reporting dashboard, and connection with existing accounting systems.

05

Pilot & Rollout (Months 6-8)

Pilot at one warehouse for 1 month, evaluation and refinement, then gradual rollout to the entire network with training and support at each location.

Results After Full Rollout

35%

Reduction in dead stock

98.5%

Inventory accuracy (from 92%)

50%

Reduction in IT maintenance costs

2x

Order processing speed

Biggest Lesson: The System Must Follow the Business

In many ERP implementations, businesses are forced to change to follow the system. We reversed this paradigm. Our system was designed to follow how the business operates, with flexibility to evolve as business needs change. The configurable rules engine means that when a new principal with different business schemes comes on board, the admin team can accommodate it themselves without waiting for developers. This is not just technical efficiency, but business autonomy.

A good ERP does not feel like new software. It feels like the way things should have always worked.

Feedback from the operations manager after 1 month live

Outcome

An ERP That Became a Competitive Advantage

After full rollout, this distributor gained more than operational efficiency. They gained a competitive advantage. The ability to onboard new principals in days (not months), real-time stock visibility across the entire network, and a sales team that can operate anywhere without connectivity constraints. IT maintenance costs dropped 50% compared to the legacy system, and more importantly, the system can grow alongside the business without requiring major overhauls.

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