1

Brand, Operations, Logistics & Supply Chain Management

Distributor’s perspective

Concept Overview

Understanding & evaluating distribution process - A 15 minutes guided tour

2

Overview :A standard distribution company will have more or less following infrastructure to manage their distribution, administration & supply chain management.

Office (s) Warehouse (s)

Retail Shop (s)

Fleet

Network of retailers

And

3

Bank (s)

Freight Forwarder (s)

ConsultantsAuditors

Links with banks, freight forwarders, transporters, consultants, auditors who provide support to manage the distribution process efficiently & profitably.

And

4

Staff

Tasks

Sales & MarketingAdministrationFinanceCustomer ServiceCoordinationMaterial HandlingBook keepingMIS & Reports

The office/warehouse/Shop staff to manage the day to day tasks helping generate the revenue projected in the business plan & to monitor the distribution process.

To give the best results, the distribution company therefore, needs ; the tools, the experience, the marketing & sales, the infrastructure & the staff expertise - a formidable requirement.

5

Task Analysis – “Orders” Management – for a standard distribution entity:Pre-Production / Production Tasks

Pre-Production Tasks• Scheduling• Sample Ranges procurement• Preparation of Catalogue• Preparation of Order Forms• Delivery of Sample Ranges• Collection of Sales Orders• Consolidation of Sales Orders• Order Acknowledgement• Placement of Purchase Orders

Production/Shipment Tasks• Follow-up with factories on

production• Co-ordination with freight

forwarders• Arrangement for freight lifting.• Follow-up for shipping

documents• Checking shipping documents

6

Task Analysis – “Orders” Management – for a standard distribution entityPost Production / Delivery Tasks

Pre-Production Tasks• Shipment Tracking• Document Tracking• Co-ordination with Forwarder• Shipment Clearance• Customs Clearance• Confirmation of Qty Receipts• Qty, Quality Check

Delivery Tasks• Scheduling Deliveries• Pick Packing• Invoicing• Delivery arrangements/ Delivery• Acknowledgements

Stock Reconciliation• Purchase Order – Shipping

Documents – Receipts – Factory Invoices – Sales Orders – Sales Invoices – Inventory (Quantity wise & Value Wise)

7

Task Analysis – “Money” – Management – for a standard distribution entityFunds & Booking /Accounting Tasks

Funds• Collection of funds from

Retailers• Payments to factories/ service

providers• Negotiation of Documents• Reconciliation of receipts,

Payments, invoices etc.• Arrangement of finance, where

shortfall.

Accounting / Booking • Invoices

(Sales/Purchase/Utility/Services)• Payments / Receipts• Stock / Inventory• Costing• Salaries /Rents / Assets

8

Other – Management Aspects

Sales & Marketing• Retailer identification• Retailer contracts• Sales & Marketing Promotions• Exhibitions• POS / POP management• Market research• Creative inputs• Sales Agents identifications• Monitor Progress• Range Releases, Retailer

meet & follow-up

9

Apparently, All costs to implement these tasks are to be managed from

the distribution margin !

Adm

in Cost

Sales &

M

arketing C

ost

Overhea

d Cost

SupplyChainCost

Finally, you are left with cherries!!If at all…

10

A typical example of the distribution process with hypothetical values:

The above illustration is based on a typical European market where the product sourced outside of Europe with a full wholesale / retail margin applied. To realize this margin the distributor must implement all of the tasks in the order management process (detailed earlier), plus have the infrastructure to support the activity, even then a “10%”, profit for the distributor is hard to achieve.

Managing efficiently the complete supply chain and still reducing the “90%” ofthe distribution cost element is Bleach International’s role and is its “Business”.

Sr. No Distribution Chain Details

Percentage Markup Value (USD)

Valuation (Up words) $ Remarks

6 Retailer Markup   225.00% $ 3,251,796   Consumer Price

5 Distributor Margin   40.00% $ 556,774 $ 1,445,243 Distributors Income

4 Distributor Cost Transportation & Pick pack 6.00% $ 53,308 $ 888,469 Pick Pack / Service Chgs etc.

3 Brand Owner Margin   30.00% $ 214,286 $ 835,161 On Landed price.

2 Cost Additions Freight handling Chgs 2.00% $ 12,418 $ 620,875 Forwarder Handling Charges

    Freight & Shipping Chgs 5.00% $ 30,423 $ 608,458 Shipping + Documentation

    Duty 13.50% $ 78,035 $ 578,035 % Variable depends on product

1 Factory Price     $ 500,000    

11

Some basic advantages – networking/associating with Bleach International :

1. Helps you to cover and target, places & groups which are physically, geographically difficult to manage.

2. Unlike any other expensive cost cutting alternate, which has to be tested over time, Bleach provides a tailor made, real time, easy to understand, scalable still cost efficient distribution package.

3. Helps you to re-work your existing infrastructure into efficient, systematic, & focused, reducing unnecessary costs associated.

4. Helps managing the order to delivery system very efficiently and most importantly with least chances of human errors.

5. Transparent order management, helps to focus on the areas of weakness, pro-actively.

6. Helps better management of cash flow.7. Helps better returns on investment, as tax efficiency, increased sales

coverage mean more business less investment.8. Encourages better link between retailers, distributors, brand owners,

suppliers & freight forwarders, benefits general health of business enterprise as a whole.

9. Any weak links can be replaced easily (like sales agent for example) as the data is managed in central system; over-riding allocated rights on written permission, helping distribution never to loose customers.

10. Any future technology, distribution infrastructure advances managed by Bleach over time; you will be able to get it in a very reasonable cost.

11. And Many More….

12

Thank You