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Route to Market & Supply Chain Blog

FMCG Distribution: Producer & Distributor Route Planning Chaos

Posted by Dave Jordan on Fri, Jul 23, 2021

As a general rule, buildings are usually numbered in a structured, sequential way. Numbering usually commences with building 1 at the end of the road which is closest to the city or town centre. Odd numbers on the left and even numbers on the right increase until the end of the road or where the road changes names. Simple.

fmcg-route-dj-in-post2In many countries longer roads and inter-city highways are identified by the number of km or miles from the respective city centres. A simple logic of everyday life which should make postal and product deliveries easier, you might expect. Not everywhere, however.

Let us take a close look at the road on which I live. The road gets off to an inauspicious start with houses 43A and 2 opposite each other. After a short distance of regularity it all starts to fall apart, and horribly. The odd numbers jump from 7 to 15. House number 9 appears much farther down the road opposite number 34 and next to number 19. Houses 27 and 29 are nowhere near 28 and 30 and to cap it all, a new house has been built between 24 and 28 and what number does that have? Fancy a gamble on 26? No, not actually an even number, it is 37, of course.

This road must have the highest incidence of free of charge dial-a-pizza transactions in CEE let alone in Romania. Throughout the day you see the various pizza/burger/grocery motorbikes criss-crossing the road trying to find their customers. Our Arabic “dial-n-deliver” order never arrives hot so we rarely have to pay for the weekend treat before a quick blast in the microwave does the trick.

The buzzing motorbikes of rapidly chilling fast food (or thawing frozen goods) compete for road space with trucks from furniture and DIY stores and huge courier delivery vans. God forbid if anyone ever needs an ambulance or a fire engine - at least the fire engine could aim for the flames and smoke, I suppose.

Think of all those incidents of repeatedly poor customer service, excess cost to serve and real lost, never to be repeated sales. Not forgetting the negative impact of incurring the cost of producing a pizza and not concluding the order to cash process. Is that reminiscent of your Customer Logistics/Route to Market distribution performance?

I have been looking at RtM logistics recently and only last month I found this in a big name FMCG drinks producer:

  • No route planning of producer deliveries to regional distribution centres.
  • No onward route planning to distributors.
  • No route planning of distributor deliveries to outlets.
  • No route planning of distributor sales calls.
  • No route planning of distributor cash collection calls.

You can imagine exactly the same chaos and cost/time inefficiency as my local road on a busy day. No wonder the company in question is struggling to maintain share in the peak summer season and this share is extremely difficult to claw back once lost. When it is hot and humid you need a drink, now – whatever the brand – and not when the producer gets its act together.

Sorting out a sensible route plan for distribution to warehouses and customers is not rocket science. With a decent map you can do it on a piece of paper or you can use one of the customised IT packages that make decisions using post/zip codes. Even the IT package will not be perfect and inevitably you will see some wasted trips and km as clients change orders or delivery days and don’t forget the weather challenges.

If you read this and think your set up is “one of the best” then perhaps the “best” you are comparing yourself against is not actually very good at all. Solving this does not require huge funds or resources but it is a rare growth opportunity directly under your own control. So, why not do something about it? 

Alternatively, you could also employ Dora, our post delivery lady. Doamna Dora is the only person who understands the numbering "logic" in our road. Indeed, when she was on holiday recently, a man took her place and he is still listed as missing in action 12 months later.

Read more articles on Supply Chain Excellence and Route To Market on our website where you can also subscribe to our updates.

Finally, feel free to use any of our contact routes including Live Chat, if you have any questions about how the Enchange Supply Chain House can assist your journey to supply chain excellence.

 

Tags: Dave Jordan, Supply Chain, Logistics Management, Distribution, Transportation, RTM

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