Importance of distribution system for the modern companies is difficult to overestimate. Before each company that turns out any products, emerges a question: how to organize delivery of goods to the final manufacturer? If the firm wants to organize all network independently it will lead to big expenses, but if it uses the help of the distributor — it will lose control over the ultimate prices. Absence of reliable distributors, loyal to trademark or the manufacturer, can make useless all work on increase in demand for already turn out goods or on market promotion of new ones.
For the companies-manufacturers possessing own distribution network, as well as for the companies-distributors, the main objective – maximum cost saving on the process of finishing goods to the end-consumer upon condition of product quality preservation. Especially it is important for the companies-distributors that draw income at the expense of difference in prices of purchase-sale. Rise in price of deliverable under the conditions of the market will lead to loss of merchandise appeal delivered by the company, therefore for growth of profits it is necessary to reduce costs on delivery, storage and disposal of goods. Hence, creation of optimum distribution system that reduces costs as much as possible is the primary goal for such companies.
Along with high importance of the given direction, our advisers also notice that it is one of the most areas of concern. Most frequent problems at the enterprises working in sphere of distribution:
- there is no correctly built drain-management;
- there is no well-defined division of functional responsibilities in the company;
- absence or obsolescence of employee incentive programme (motivation of employees);
- the bad organization of interaction with logistical operators;
- high degree of a proneness to conflict in collective;
- non-uniform work load of staff.
And it’s by no means all problems. The distribution inefficiency leads to that stocks of goods being in great demand are in short supply in a warehouse, and their replenishment occurs too slowly as delivery occupies too long term. At the same time the warehouse is hammered with a large quantity of unnecessary goods, and if this warehouse else is not yours — the cost price of goods that became dusty anyway grows at the expense of costs for rent of the warehouse areas.
The bad organization of interaction between departments leads to that there is no accurate differentiation of zones of responsibility of departments that leads to constant conflicts. Departments of purchases, logistics, sales and accounts department can't find common language, everyone looks after own interests.
As an example it is possible to put a case from practice of our advisers. One company-distributor of perfumery and cosmetics which management complained of low efficiency of the operation of their company addressed to us. Clients who started to work with the company, refused cooperation in a short time that led to heavy losses, and in due course company position was only aggravated.
Had carrying out the analysis of operation of the company, had having a talk with employees, our advisers revealed following problems:
- absence of the uniform approach in working with clients;
- zones of responsibility of employees aren't differentiated, functionality of each employee isn't accurately defined;
- inadequacy of the functionality of implemented IT system to needs;
- absence of mutual understanding between departments, management and managees.
Our advisers had differentiated employees’ duties and responsibilities, had developed the process establishing standards of work with the client, have made the technical project on completion of information system (business automation), have picked up the company-executor. The given actions had led to conditions stabilization, long-term relations with clients had started to be built, differentiation of responsibilities and functional duties had led to considerable reduction of conflict situations in collective, to adjustment of work of departments and the company as a whole.
For effective distribution system construction CONCOL company offers following services:
- construction of distribution network;
- working out of an optimum nomenclature directory;
- organization of working processes with wholesale and retail clients (consulting logistics);
- working out and optimization of price-lists, principles of a price policy, principles of loyalty (discount);
- management of product mix;
- estimation of sales efficiency and training in estimation process;
- sales forecasting and training in forecast;
- process organization «Management of a debt receivable»;
- technical job setup on working out reports in information systems.
Qualitatively organized distribution – your essential competitive advantage. If you want to build a distribution network, or to optimize already existing, contact our experts by phones:
(495) 763 28 63
(499) 145 74 77
Or by e-mail info@concol.ru
