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Route to Market & Supply Chain Blog

FMCG Distributor Development – Drive Excellence in Planning and Logistics

Posted by Ross Marie on Mon, Jun 28, 2021

I recently shared our step-by-step approach to drive and develop distributor performance. We call this the Distributor Partner (DP) Development Programme.

I have previously shared the first Four modules:

  1. Module 1 - Producer RtM Strategy – Translate Producer RtM goals into DP capabilities/actions.
  2. Module 2 - Model Distributor - Definition of Industry & Geo-specific Best in Class distribution.
  3. Module 3 - Distributor Assessment - How to identify and rank the best DPs.
  4. Module 4 - Distributor Partnership - How to build a joint approach for sales & profit growth.

Completing Modules 1 to 4 means we clearly understand what our RtM approach is and what our ideal DP looks like. We have also assessed our current and potential future DPs against our vision of the ideal DP and have a solid foundation and partnership to build a joint approach for growth. It is time to turn our attention to improving DP Operations. This is Module 5 – Planning & Logistics.

FMCG Distributor Development – Drive Excellence in Planning and Logistics

What should we focus on to improve DP Planning & Logistics?

We are focusing on the detailed processes and standards around activities such as, inventory planning, management and ordering, including minimising theft. We are focusing on fleet management, ability for OTIF (On Time In Full) delivery, delivery routing, and how producer products are received and stored in warehouses, to name a few.

The specific areas to focus on will depend on the results of the DP Assessments in Module 3. But if the following statements can be made about a specific DP, they will be very close to the top of the pile.

Characteristics of a DP with Excellence in Planning & Logistics   

Planning & Forecasting

  • The Distributor and Producer have a joint Demand Planning process in place where information is shared in a timely and accurate manner, and well in advance.
  • Appropriate planning and forecasting tools are used by both the Distributor and Producer with evidence of shared data and decision making.
  • Distributor forecast accuracy for Producer sku's is monitored, and actions are taken for improvement.
  • Demand forecasts are under-written by staff with direct trade interaction and experience.
  • Measurement of numeric and weighted distribution is seen as a key initiative to Distributor AND Producer growth agenda.

Logistics

  • The right processes and fleet are in place to deliver in the minimum lead-time and no longer than 48 hours.
  • Adequate fleet & transport management is in place (KPI’s, procedures, people and standards).
  • Customer care is evident through continuous improvement in the delivery service, for example, delivery delays are promptly agreed/ communicated to customers, Saturday delivery service is standard and emergency delivery service offered.
  • A routing and schedule management system exists and is reviewed at least monthly.

Warehousing

  • There are documented processes in place for the receipt, storage and retrieval of stock including damages and returns.
  • Stock counting is carried out at least annually, but a monthly rolling count is preferred.
  • Sufficient forklift truck (including spare batteries) and trans-pallet equipment is in place and in well maintained order. Manual handling is minimised.
  • The Distributor operates with documented best practice processes for the storage of Producer stock (e.g., receipt, stacking, security, segregation, pest, and temperature control)

The degree to which the above characteristics apply to each DP will determine the actions that need to be taken and the individual DP plan elements that must be put in place.

Once we have completed the Planning & Logistics Module of the DP Development Programme and implemented an individual DP plan, we will have greatly improved the operations of the DP. In my next blog we will focus on further operational improvements with Module 6 – Finance & Back Office.

What should you do now?

Tags: FMCG, Route to Market, Logistica Management, Performance Improvement, Forecasting & Demand Planning, Retail, RTM, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

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