Supply Chain Blog

Olympic level FMCG performance or simply distributor over-stocking?

Posted by Dave Jordan on Tue, Aug 16, 2016

Wow, four years have flashed past since the London Olympic bunting was packed away and the metal polish put back under the sink. The 2016 Rio games are well and truly underway and the cauldron flame is alight for the duration.

Over 11,000 competitors from nearly 200 countries and even a refugee team have been getting up ridiculously early to sweat and train at whatever sport they excel. That is a huge number of really fit people who are focused on being in peak condition for a once in a lifetime event that might last less than 10 seconds or several hours.

Taking the 100m sprint as an example; the top sprinters will have 4 opportunities to perform. A combined window of 40 seconds to reflect all that money, time and effort that has been expended to qualify and perform to the best of their ability. What if they stumble or don’t hear the starting gun, drop the baton or worse still, get disqualified?

FMCG_INVENTORY_DISTRIBUTORS_CEO.jpgAll that planning and careful preparation to get to the final of the competition only to be disqualified for being a little twitchy waiting for the starting pistol to crack out loud. Or, sticking your foot just a millimeter into the triple jump plasticine. Hey, don’t worry, there will be another chance for you in Tokyo………

You are not in the final to perform in front of millions of people watching around the world. Nobody will see you perform and instead of your stock rising and attracting more lucrative advertising deals you will be remembered as that poor guy with the twitch or that girl with the too-big training shoes.

Cue segue. The global economy seems permanently stuck in “weak and unpredictable” performance mode with no obvious way out even for the dis-United Kingdom of Brexit. Imagine you are a yellow CEO Pac-Man (do they have female Pacs?) nibbling away at the dots and then getting stuck in a dead-end. What next, nowhere to go, panic, panic! Despite this, many CEOs will be under extreme pressure to “make the numbers”. How exactly? While all this Olympic activity is taking place is your physical FMCG stock rising as we move through the second half of the year?

Despite what sales and finance colleagues will spout, there is a limit to how much stock can you push into your trading channels and this includes International Key Accounts. Coercing (or more likely forcing) a distributor to take more and more stock may appear an easy option but it is an unsustainable action that damages your business in the long run.

At some stage a brave CEO has to say enough is enough and start a period of controlled destocking despite the effect this will have on top and bottom lines. Loading the trade does not happen by accident; you know you are doing it so stop deluding yourself and HQ and do something! Put a stake in the ground that sets the tone for the future.

You may believe that excess inventory means you will never be out of stock or off the shelves but this is not the case. The available stock will inevitably be unbalanced and just when you expect your long planned relaunch to fly out of the blocks and hit the shelf you also twitch and realise you have 9 months’ stock of the old product sitting in distributors warehouses.

What a disappointment. A waste of money, time and effort, i.e. an Olympic gold medal-sized goof and HQ is unlikely to give you another chance in a lot less than 4 years’ time.

Image courtesy of stockimages at freedigitalphotos.net

 

Tags: FMCG, CEO, Distribution, RTM Assessment Tool, Inventory Management & Stock Control

FMCG Success Story: Focus on Customers - see the Benefits

Posted by Dave Jordan on Wed, Oct 07, 2015

 Once upon a time there was an FMCG company that I will refer to as “Foresight”. “Foresight” had spent many years and many Euros creating an acknowledged slick Supply Chain.

Top class regional and global buying
  • Flexible and cost effective factory network
  • State of the art ERP
  • Rigorous S&OP/IBP with top team buy-in.

With all those important boxes ticked they must be successful…..but they were not; not even close. In their peer group they were not number 1 and top & bottom line growth was getting harder and harder. Throw in an untimely and lengthy recession and the consumption of their product range plummeted – double digit style. A significant FMCG business and quite a few personal reputations were not looking pretty.

The problem was a surprising lack of focus on the customer end of the Supply Chain. Both International Key Accounts (IKA) and the Traditional Trade (TT) were being poorly serviced.

A lot of hard work upstream was being wasted through inefficiency and frankly, ignorance. The situation had existed for a number of years but as the same malaise was common in the industry nobody could see the benefit or indeed the need for “getting ones act together”. “Last amongst equals” was hardly a motivating and compelling business proposition for an international big name player.

Seeking external expert assistance “Foresight” started out on an adventure that would change the way they approached business at the customer end of the chain.

Customer Service.   This was something “Foresight” thought it was already good at providing but critical aspects were lacking:

  • Customer Service responsibilities were fragmented and lacked clear and unambiguous leadership.
  • Customer Service personnel had received no training in the subject - nobody really wanted to take responsibility.
  • Customer Service was actually limited to issuing and chasing invoices. Proactive interaction with customers and problem solution were not in the job descriptions.

This hardly projected an image of a caring “Foresight” and this was a huge risk considering the increasing power of the retailers…. 

Route To Market (RTM). “This is under control for TT and it seems to work”, however RTM was in the Sales black box and that box needed opening and shaking up and down vigorously!

  • The Distributor RTM network had been in place for several years and was decaying and the “Foresight” sales interaction with Distributors was far from a win-win relationship.
  • Several Distributors were simply incapable and/or ill equipped to represent such a major company. Some actually did not wish to be involved.
  • “Foresight” did not know who they could rely on in their network or how large and obvious opportunities could be targeted.
  • Bonus linked sell-in was the focus and the remaining steps to the consumer were ignored at “Foresight” level and left in the hands of some indifferent distributors.

The cures were not simple or quick but they were effective and the payback was fast and sustained. What happened?

The cures were not simple or quick but they were effective and the payback was fast and sustained. What happened?

“Foresight” now operates a centralised Customer Service department looking after customer needs in a standardised and caring manner. Phone calls are answered by someone who wants to help and the customer is not passed from pillar to post trying to find someone interested in their problem. Retailers now see CS staff face to face as they proactively take steps to understand the needs of both sides of the partnership. The Retailer office was once “sales only” and off bounds to other departments but not now and the benefit is clear and significant.

In RTM, “Foresight” carried out a comprehensive assessment of their distributor network making evaluations of all aspects of each distributor’s organisation. The strengths and weaknesses of each partner are now known and understood. “Foresight” now knows where there is receiver capacity to take more responsibility and a leading role in market deployment. Similarly, they also know to tread carefully with a number of distributors who are struggling financially or simply not equipped to meet expectations. “Foresight” efforts are now focused on those areas, providing maximum opportunity and reward. The “one size fits all” approach has gone and distributors are managed as individual and important partners.

In combination these changes have transformed the business and success has been quick to materialise.  “Foresight” enjoys a leading position in its sector while competitors scrap around trying to find growth that is there but they cannot reach.

For “Foresight” at least, they really are able to live happily ever after!

Image courtesy of David Castillo Dominici at freedigitalphotos.net

Tags: Customer service, FMCG, Dave Jordan, Sales, RTM Assessment Tool

FMCG: What does S&OP bring to the party? Sales success of course!

Posted by Dave Jordan on Thu, Sep 17, 2015

During my recent travels I met with two Sales (or Business Development Directors if you’re posh) from well known FMCG companies to discuss an assessment review of their Route To Market (RTM) networks. Surprisingly, neither was interested and gave a remarkably aligned reason for the rejection. “All this does is raise Sales In and we know how to do that already”. Oh dear!

No, Nein, La, Nu, He, Nem, Không có!!! Whatever language you choose to use, this understanding of an RTM assessment review is flawed. There is no doubt Sales Directors across the globe know how to increase Sales In and frankly it is not that hard is it? You can use promotions, discounts, extended credit, BOGOF, sale or return etc, etc. Unless you are regularly working on a knife edge with out of stocks (OOS) at the Distributor, pushing Sales In does not guarantee one single extra sale, not one single piece.

Without a focus on Sales Out any stock pushed into an RTM network is likely just to sit in Distributor warehouses as there is no obvious consumer pull or demand. The Distributor is sitting on plenty of valuable stock but without a pull from the trade all this extra pushed stock is wasted. One of the key drivers for a push strategy is the alignment of Sales In targets with Sales Team bonus payments. Once the stock has moved out of Producer hands it is considered a “sale” and this is simply not true in the cold light of day. Nothing is actually sold until a consumer has handed over their hard earned cash at the till.

FMCG_RTM_SALES_UPLIFTThe beauty of an RTM Assessment is that it addresses how to achieve a Sales Out uplift and every assessment with which I have been involved has achieved such an uplift! If you get close to your Distributors and develop a lasting relationship you will be able to get more out of the market – even in this recession which seems endless.

Partnership – treat Distributors as equals as they are an integral part of your Traditional Trade business whether you like it or not. Hold regular meetings at the right levels and ensure the discussion is a real two-way process.

Planning & Logistics – do not assume Distributors know how to aggregate demand by SKU to form a demand forecast. If their forecast is more accurate then this gently ripples right back to you own factory and procurement activities.

Sales/Order Management – provide training to ensure your face to the customer is professional and competent. Ensure orders are captured promptly AND that stock is available to promise.

Finance & Back Office – is the Distributor financially sound and capital efficient? Do they recruit and retain the right calibre of people and are they rewarded fairly and sensibly?

This is just a snapshot of a what a comprehensive RTM assessment review delivers and more can be found here.

If you are struggling to make your 2015 numbers you might find that Q1 2016 presents an extremely difficult start to the year. A thorough review of your RTM Distribution network could be just what you need to make up ground in the following months.

A real uplift in FMCG sales is there for the taking!

Image courtesy of samuiblue at freedigitalphotos.net

Tags: FMCG, Route to Market, Supply Chain, Sales, RTM Assessment Tool

FMCG Route to Market – the Warehouse to Customer journey

Posted by Dave Jordan on Wed, Sep 02, 2015

Your Supply Chain has been revised, optimised, transformed or even blue sky’d – yes, honestly have been present when this was used but managed to stifle a guffaw into a cup of hot chocolate. What a smooth running well oiled machine it has become. Processes and procedures have achieved ISO standards in all areas and KPIs shine like a halo above the Supply Chain Directors swelling head.

You source competitively and you have a robust Supplier Certification process in place. Raw and packaging materials arrive on time in full and the supplier relationships are good.

Manufacturing operates like a Rolls Royce with the full raft of certification and manufacturing excellence credits. You really are producing tomorrow demand today.

Sales & Operational Planning (S&OP) is alive and kicking and has the full buy-in of all functions, even sales and marketing. The top team has a monthly love-in with the Board S&OP meeting.

A proactive 3PLP partner is in place and operates your logistics to best in class cost and standards. Stock shrinkage is minimal and even fuel and tyre consumption are routinely monitored to keen costs keen and service on track.

Your Route To market (RTM) distribution partner operates at a Customer Service Level higher than the completion with universe coverage approaching 100%. This RTM news sounds too good to be true and certainly if you are not careful it can suddenly go really bad. No, I mean really, really bad with all sorts of body parts going over each other. Let me tell you a short factual tale......

FMCG_RTM_TT_SALES_SUPPLY_CHAINThis week I joined an FMCG sales agent on his daily journey to deliver temperature controlled products to traditional trade customers. I did not know what to expect as Cecil (not his real name) chugged away from the chill of the warehouse and towards the steaming metropolis. While many tasks were completed well the overall experience was a disappointment. Here’s why.

1.The chiller unit was not working correctly so product integrity was immediately at risk

2.The van air conditioner was not working so quickly both Cecil and I looked like we had run a marathon.

3.Orders were picked in the rear of the van while the door was open for several minutes and no air curtains were present. (Picking on the move, beat that Amazon.)

4.There was space to pick in the van as space was only 20% utilised.

5.Cecil made “on the hoof” decisions on the route plan as we repeatedly passed the same landmarks including a bus stop packed with female students.....

6.The van remained unlocked while Cecil was inside the outlets making the deliveries and collecting cash.

OK, this was one spot check in a full year of RTM deployment but I am sure a majority of these observations will be present in other areas and with other sales agents. This is the sharp end where sales are made and cash collected so however impressive you Supply Chain may be it is imperative that FMCG producers regularly experience the final face to face customer experience. Far too many sales managers are sat in offices appearing to work hard while actually following the cricket/rugby/football on the internet*.

* Delete as appropriate for you.

Image courtesy of palZiyawit at freedigitalphotos.net

Tags: FMCG, Route to Market, Supply Chain, Sales, RTM Assessment Tool

FMCG Drinks Route to Market – let’s get fizzical in CEE

Posted by Dave Jordan on Wed, Aug 19, 2015

In a past life I ran the Supply Chain for an FMCG company in the 6 Gulf Co-Operation Council (GCC) countries plus Yemen in the Middle East. The Distribution model was one different legal entity per territory even for the largest market of Saudi Arabia. Within the smaller markets there tended to be one or two stock holding points which were enough to meet demand in a reasonably short Supply Chain. KSA on the other hand had stock holding points in a majority of the larger population centres.

Moving stock around Saudi Arabia as demand fluctuated was often a simple call between the Supply Chain team and the distributor first point of contact. The distributor owned the stock of course and could do as he pleased but this interaction allowed for optimum internal customer service and timely production and replenishment from the factories. This provided a degree of advance warning outside of the formal forecasting system which was very welcome.

As confidence and cooperation progressed, this flexible replenishment process was expanded to cover cross-border assistance. For example, shortages in Bahrain were quickly erased by stock transfer with appropriate paperwork from the distributor in Dammam. This was not a substitute for good integrated business planning with the distributors but when lost sales became a real possibility all opportunities were considered. Sensible stuff but not exactly rocket science!

Anyone living in or around Romania presently will have “enjoyed” a prolonged spell of very hot, dry weather and uncommonly lacking a few end of day cooling storms. All those drinks producers must be very pleased they can avoid an “it was a poor summer” comment in the annual results. Well, this is true if your products are continually on the shelf! No excuses, they must be continually present in front of consumers’ eyes at the precise time they have a raging thirst to slake.

Driving across the Hungary-Romanian border during the heat wave we discussed where to stop for food and much needed drink and decided to cross into Romania as the Hungarian road side service stations all seemed busy. Busy with many people drinking a certain drink and even as we moved on we saw branded trucks arrive to keep stocks moving.

(Aside: Sadly, you leave the good road infrastructure behind in Hungary and any form of transport moves slower in Romania, even the planes! All FMCG producers and distributors would hugely benefit from a half decent road infrastructure.

We needed drinks and the range was wide with all the big names present bar one. This was one brand you expect to find everywhere and every time. The closest you will get to an omnipresent fizzical form in a can or bottle. Shelf empty. Ah ha, the weather is so hot it will all be in the cooler. No. Not there either. (Strangely, nobody had hijacked the prime cooler space, yet......)

Having been involved with drinks Route to Market (RTM) in CEE for several years I was compelled to ask why my fizzy favourite was not available. The simple response was that the distributor did not have any stock. Ok, so why not get some from somewhere else? We can but it cannot get here until after the weekend. I mentioned that you could probably get stock from just across the border in Hungary. Lots of head shaking and nu, nu, nu.

Yes, you would need some paperwork but we are all in the EU so that cannot be difficult, can it?

FMCG_Drinks_RTM_CEE

Yes, you would need to meet labelling requirements but this type of stuff is bottled by a regional giant so both languages are usually present.

Yes, you would need some agreement on transfer pricing so competitive margin positions are roughly maintained but why ever not?

If producers do not get a serious grip on their Route to Market operations and cross-border opportunities then they will lose sales and/or someone will move in and destabilise the market with legal but “grey” imports.

A little more flexibility, pragmatism and entrepreneurship would pay huge dividends when demand is constantly high.

Image courtesy of Chris Sharp at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Dave Jordan, RTM Assessment Tool

FMCG Distribution: Route Planning & IKEA Shopping Chaos

Posted by Dave Jordan on Wed, Apr 29, 2015

Ok, I know I should not have gone there. It was Sunday and well before the live Premier League football on the TV. The weather was cold, the air was full of drizzle and as I turned off the overgrown roundabout the scale of my folly dawned; the IKEA car park was bursting at the seams. Every available legal and illegal space was taken.

There were families pouring out of cars and into the store and equal numbers trying to squash brown flat-packs of “destroy it yourself” furniture and fittings called Grunt, Splat and Twong into impossibly small cars. What do these people do about their Sunday outing passengers after they have loaded up? Do they give Granny and Granddad a few coins to take the bus home? There is no way you can fit all the passengers and the flat-pack must-haves back into some of these cars.  Maybe that is why they provide rope at the IKEA loading bay; it is actually to tie Granny and Granddad onto the roof of the car.

Oh well, I am committed so might as well join the hoards of people unable to control shopping trolleys, with absolutely no sense of direction and with varying levels of short-term memory loss. I hooked a yellow bag over my shoulder and I too became an IKEA shopper!

I know there is a science in store layout design whether it is a supermarket, a DIY store or an M&S type outlet. The store wants everyone to see everything they have available and they want it to be just at the right time when for example, the shopper has been subliminally convinced that the bright pink Plobo stool would look really nice in their kitchen.

FMCG RTM ROUTE PLANNING resized 600Oh, but the chaos this causes in an IKEA store. Being a Supply Chain chap I would make the whole store strictly one-way with nobody allowed to double back to soft furnishings or for a forgotten low energy light bulb. In fact, if I had my way I would make the floors with a defined downhill gradient and ensure trolley wheels were oiled hourly to help people on their way, through the broken furniture bargain section, past the cheap but strangely filling fast food and out into the car park. What about a small battery pack on each trolley which delivered a persuasive tingle of current if you tried to push the trolley against the traffic? Too extreme, possibly!

Think of all the wasted hours and wasted effort of moving all the way through the store then insisting on reversing the route and getting in the way of everybody else. Then it struck me. I realised where I had seen this before and why I perversely enjoyed dodging the trolleys in the IKEA shopping maze. This is what many FMCG companies suffer in their distribution route planning in Romania every single day. Wasted miles, wasted fuel, wasted time and in all that time there are customers not being served.

If your FMCG sales are struggling along and the stream of excuses for monthly gaps appears endless you might take a close look at how much time your sales people spend selling to and guiding distributors in the Traditional Trade If they have adopted the IKEA system then you may just have spotted a huge opportunity to improve your Route To Market performance.

Go and have a closer look. Get some IKEA rope, tie yourself to the roof a salesman’s car and see what some simple thought and routing logic can add to your bottom line.

Image courtesy of Stuart Miles at freedigitalphotos.net

Tags: FMCG, Route to Market, Supply Chain, Sales, Distribution, RTM Assessment Tool

FMCG Traditional Trade Distribution: A letter to the Drinks Agony Aunt

Posted by Dave Jordan on Wed, Apr 15, 2015

Dear Drinks Agony Aunt,

I have reached the end of my patience. I’m drinking too much coffee, too much beer, I smoke like a chimney, I’m not eating properly and I just cannot sleep. I have not managed to watch or play any of my favourite sports and now even my kids call me Uncle Dad as I spend hour after hour at work. At times, a short step off a tall bridge without a bungee cord does not seem such a bad idea. These drinks Distributors are killing me. Literally!

FMCG Drinks Distribution Agony resized 600The world’s greatest drinks salesman is glowing bright yellow in the sky. Consumers are literally gasping for drinks yet we cannot get our products onto shelves and into coolers. We have given the Distributors some very focused incentives and we are spending thousands on quirky TV adverts with that irritating guy with the funny hair. There is no doubt our brand awareness is right up at the top level yet we just don’t sell as much as we could and should!

When the weather is this hot, consumers want a drink when they are thirsty and not when Joe Egg the Distributor can be bothered to turn up in his smoke belching van to replenish stocks. If our product is not sitting invitingly in a cooler the thirsty masses simply take an alternative product. Consumption is immediate, I have lost a sale and this drives me madder than Brian Mad of Madcastle.

Please, please help me. Tell me what I should do before I lose even more of my hair.

Yours,

Frustrated of FMCG Drinks

......and the answer.  

Dear Frustrated of FMCG Drinks,

Thank you for your letter, which was a delight to read. Believe me; you are not alone in having such feelings and concerns. There is nothing worse than seeing the world’s greatest drinks salesman shining down and not being able to meet the demand of the thirsty masses. This frustration plus the lack of return on valuable investment can leave even the calmest of souls agitated and depressed. However, do not despair. As I said you are not alone and this is not the first time I have seen this problem. You need professional help to receive the Route To Market/Distribution therapy you need.

Firstly, you must overcome 2 important barriers. The first is that you cannot assume your existing Distribution network is entirely suitable for the job in hand. Secondly, you must look at yourself in the mirror and realise that you are not perfect either. If you can do these 2 things then help is at hand.

Using this simple checklist and guiding definitions you can take a critical look at how you manage your Distributors and how they manage your business on your behalf. Some of the questions are searching and may cause you some discomfort but this is necessary in order to accurately evaluate what is going well and what can be improved.

Do not keep this to yourself. The effective management and exploitation of a robust and proactive Distributor network is a team effort requiring buy-in from all Board colleagues and peers. Keeping this problem to yourself will only increase the caffeine/beer intake and accelerate the hair loss!

I will always be pleased to help you and look forward to your feedback on a very positive experience with the checklist. Cure the problem, do not treat the symptoms!

Yours in a soothing, calming tone,

The FMCG Drinks Agony Aunt

Image courtesy of Stuart Miles at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Dave Jordan, Traditional Trade, Distribution, RTM Assessment Tool

FMCG Shades of Greys: Parallel & Counterfeit Trade

Posted by Dave Jordan on Wed, Feb 25, 2015

Probably sitting at number two in the most popular excuses offered when FMCG sales did not happen as planned is parallel or grey trade. Without doubt greys, “passing off” and counterfeits can have an impact on FMCG sales but I was surprised how they only became significant when sales bonus targets were not achieved. Sales not going too well? Drum up a story about greys flooding the markets.

Counterfeits are simply illegal copies of quality brand names and increasingly they are more and more sophisticated and recognition is no longer a check of the bottle mould stamp or a sniff of the fragrance. Despite co-ordinated attention from multi-national companies, well equipped underground factories still exist to rip-off brand owners and consumers.

FMCG GREYS SALES RTM resized 600Passing-off an inferior product by making it appear to be a top brand is also potentially illegal but often takes time to prove a case. When a product is called Tipton Tea in a yellow box it is clearly an attempt to steal Lipton consumers who are not vigilant. However, if the tea was from Tipton how do you persuade a judge to rule in your favour if the artwork is not identical? As ever, such litigation takes time and money and even then, success is far from certain.

Back to greys or parallel trade. This is genuine product being sold in a territory for which it was not originally intended by the producer. The quality is fine, multi-lingual packs mean the instructions for use are available and in a duty free zone like the EU, stock can legally cross borders. Oh, and they are cheaper than what is normally available in any particular market. Grey sources can often be from a bona fide distributor in another country sending stock over the border with a bulk discount at month end – a sort of shifty shades of grey but not illegal!

The real problem arises when there is nothing shifty about the origin and there is no discounting or margin misbehaviour. Someone can get the same product into your market at lower cost than you can and consumers do not care whose bonus they are affecting. Instead of moaning and groaning about greys why not take advantage of this learning opportunity as someone can do it better than you can; deal with it!

Assuming the source cost ex factory and distributor margin are consistent then you should study your arrangements for transport, warehousing and specifically Route To Market distribution. Get your Supply Chain (not sales) people onto this and fix the cost to serve problem. If distributor margins are causing the greys then that is purely a sales issue, i.e. self inflicted sales pain. Get your whip and sort this out.

If you are the CEO do not be seduced or blind-folded by the sales message that their hands are tied and there is nothing you can do about greys. There is, and failure to do anything about them could cost you your job!

Image courtesy of praisaeng at FreeDigitalPhotos.net

Tags: FMCG, Dave Jordan, CEO, Traditional Trade, Sales, Distribution, RTM Assessment Tool

Free FMCG Route to Market Improvement E-book

Posted by Dave Jordan on Wed, Feb 11, 2015

describe the imageDo you need to improve the availability of your products in the Traditional Trade?

Do you know the strengths and weaknesses of your distributor network?

Do you know what really happens after your products leave the warehouse?

Is your network managed as an extended supply chain or a sales irritation?

Practical, hands-on advice to FMCG producers on how to improve distribution operations including:

  • Choosing the right distributor.
  • Importance of communication.
  • Overstocking.
  • Unrealistic demand forecasting.
  • How your business can provide proactive support to RTM deployment.

Get our free e-book & put your FMCG distribution operations back on track now!

Buy local image courtesy of Stuart Miles at freedigitalphotos.net

Tags: FMCG, Route to Market, Dave Jordan, Supply Chain, Traditional Trade, Sales, RTM Assessment Tool

FMCG Route to Market Distribution: Free Distributor Assessment Tool

Posted by Dave Jordan on Wed, Jan 28, 2015

FMCG producers are often far too ready to blame their Distributors when sales do not go to plan and targets are not met. However, it is rarely all their fault particularly if producers are not clear on what is expected.

To help Producers understand the real state of their Distributors, Enchange has released a free - yes, free - tool to guide an assessment of Distribution networks. While focussed on FMCG the tool is applicable to all sectors using distributors.

Download the tool here.

The RTM Distributor Evaluation Tool has been designed to guide your evaluation of four key capability areas:

Partnership – is the relationship a one way street or do you actually talk to your distributors? Do you treat distributors as real partners aligned with your business objectives?

Planning & Logistics – how does the distributor Supply Chain stack up? Your Supply Chain maybe a Rolls Royce but what about theirs, can it do what you want it to do?

Sales Management – how does the distributor take orders and execute them? You would be surprised (and probably disappointed) at how some major producers are represented in front of customers.

Finance & Back-Office – how well is the distributor organised? How health are the finances? Does the distributor exploit IT or is it still a pen & paper based system?

The tool is not difficult or complicated and it will not take too long to run through the various questions and benchmarking statements. The important point is that the tool is completed as accurately and honestly as possible and certainly in collaboration with the distributors. I recommend you use someone unrelated to the distributor sales function or even a 3rd party to run the process to ensure you receive a reflection of reality.

Of course, the tool is not comprehensive but it can be used to provide a reasonable guide to how your current distributor network operates. Why not try it out; you may well be very surprised by the results!

Image courtesy of Enchange at Enchange.com

Tags: FMCG, Route to Market, Dave Jordan, Pharma, Traditional Trade, Sales, Distribution, RTM Assessment Tool