Supply Chain Blog

FMCG Route To Market – Ignoring it is Madness

Posted by Dave Jordan on Tue, Oct 25, 2011

We are now into the final quarter of the year. Very few companies will be cruising along nicely and looking forward to the year-end results. If you did not review your Route To Market Distribution network and tasted sustainable success then some would describe this as “madness”!

With due reference to the original lyrics by Madness Reaching salestarget

FMCG, Pharma too
Salesmen not sure what to do
Stretching targets to be met
No sales bonus do they get.
Distribution is a mess
Though some do try to impress
What we try always fails
What’s to be done to raise sales?

Oh, what poor sales we had
With our sales team going mad
Then we found a tool
Showing how to change the rules
What poor sales we had
Distributors weren’t all bad
Now we know the ways
To raise the volume of their sales.

Investing in a full review
Use a tool to check, we do
Evaluating every one
A short project and it’s done.
Now we know who’s good and bad
Focussed effort can be had
Helping them achieve their best
Soon to take share from the rest.

Oh, what poor sales we had
With our sales team going mad
Then we found a tool
Showing how to change the rules
What poor sales we had
Distributors weren’t all bad
Now we know the ways
To raise the volume of their sales.

Now we win in RTM
Competitors, all of them
Struggle now to make the grade
Thanks to changes that we made.
Route To Market, sorted out
We know what it’s all about
Work with partners; win the cup
Back on track and sales are up.

Oh, what poor sales we had
With our sales team going mad
Then we found a tool
Showing how to change the rules
What poor sales we had
Distributors weren’t all bad
Now we know the ways
To raise the volume of their sales.

Route To Market, Route To Market, Route To Market
Route To Market, Route To Market, Route To Market.

I hope you enjoyed singing along. You might also like to tune in to these other supply chain creations:

 

Image credit: HikingArtist.com


Tags: FMCG, Route to Market, Dave Jordan, Humour, Traditional Trade, Distribution

Who’d be an RTM Distributor for a Blue-Chip FMCG Company?

Posted by Dave Jordan on Wed, Oct 12, 2011

Well, I would think long and hard about such a decision! Would you want the hassle and the lack of recognition and reward?

An FMCG distributor’s lot is not always a happy one. Frequently and unfairly blamed for not reaching targets, yet the fault often lies elsewhere. Unless you have a major and well established distribution company then it is always difficult to get the producer principals to see your point of view – even if you get the unlikely opportunity of a forum to put your position across. The old adage “I treat people the way I like to be treated” does not really apply in distributor management.

Traditional Trade in ScopeI appreciate that Traditional Trade (TT) distribution has all but vanished in some developed markets but in others it is still the backbone. Yet, companies are prone to pander to global and regional retailers under all-consuming contracts and ignore the much more flexible and co-operative distributors. IKA give salesmen a hard time so they seem inclined to pass the grief on to distributors. This sounds a little like someone who is getting berated at home taking it out on colleagues at work and for no apparent reason. At the very least they are kicking themselves in the foot. 

IKA’s are like huge ocean liners and take an age to be persuaded to change direction and do something different. With distributors you can theoretically make useful changes with a telephone call. Distributors are (usually) flexible and the bottom line is they are also in it to make money so why not help them? They are not in the game to hold producer stocks that have been loaded to make the month/quarter/year end results. They are not in it to act as a smoke screen for producer capital inefficiency. And they are certainly not in it to take the blame for producer salesmen for mistakes and poor decision making.

Having studied a number of producer-distributor operations, particularly in CEE I consider those at biggest fault are Sales Directors. Of course, poor distributor management may well be at the level of local sales resource but the overall Route To Market activity responsibility is at the top table. If Sales Directors with sizeable TT markets feel they need to focus on XYZ international retailer then they are exposing their companies to huge risk in the TT area. Make no mistake; it is highly likely your distributors are being mismanaged at best and abused at worst.

If Sales Directors believe everything they hear about how poor and indifferent distributor partners are then that is an alarm signal. The only way to silence that signal is to get out and about with distributors directly, i.e. cut out the middle men and make some unannounced visits. I am absolutely sure they would reap huge benefits from just making personal contact; pressing the flesh and listening first-hand how distributors can help increase sales.

To paraphrase a popular bra company advert; “believe it or not but distributors know more about traditional trade than you do”.

 


Tags: FMCG, Route to Market, Dave Jordan, Traditional Trade, Distribution