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In the conduct of performance of business of every business organization, it is very inevitable to consider different aspects and factors which show a significant effect on the business. Oftentimes, these factors are also causes of major problems and challenges that the business is facing. Therefore, it is of paramount and utmost concern that these threats be given immediate attention and sustainable solution to be able to further improve the performance of the business in terms of generating profit and improving other key performance indicators relative to business performance. One of these factors would be distribution management, the process in which the product or service flows from the point of production to the point of delivery and extends even after the service has been rendered or the product has been sold. The process of distribution management is a perpetual process and it requires a lot of effort to understand such system because of the complexities it entail.
According to Manhattan Associates, the process of distribution management, or in this case specifically channel information which forms a part of distribution management, entails a complex process and flow of procedures which extends from the supplier to the customer. Such definition, assumes the fact that distribution strategies are supposed to be looking at both perspectives of the manufacturer and the consumer because the process of delivery of services and physical products entails the major participation of both parties, so as the success measures of such process. T entails an effective management of the supply chain process and calls the need to form sustainable solutions which can help in the long-run existence and success of the business process. Oftentimes, these problems are rooted from the complaint of the customers from the service or from the experience in the organization. These complaints are also related to poor business performance which invariably affects the services which the stores fail to deliver to its target market.
It ahs been acknowledged overtime that the process of doing business, specifically dealing with the flow of supply from the manufacturer to the retailer and even to the end-users of the product, is a complex process which involves a complex series of various interactions and relationship from different parts of the organization and even to the divisions which are outside the control of the supplier - this includes the retailer and the consuming public which are also considered as essential parts of the supply chain or the distribution flow. The relationship which was built and established by the manufacturer to its set of suppliers in the market is often also the basis of the competitive edge of the manufacturing company. When considering this distribution process, it is very important that the manufacturer puts an emphasis on the activities and operations which deals on the physical movement of the products. Mossman and Norton (1965) describe this process as “the operation which creates time, place, and form utility through the movement of goods and persons from one place to another”. To summarize this description in simpler words, it only means that the successful management of an organization's distribution strategy must take into consideration both the physical distribution and the channels of distribution which are used and utilized to be able to make it possible. This should include a coordinated effort in the upstream and downstream and should take into consideration supply chain management to be able to properly formulate strategies regarding distribution (Kapoor & Kansal, 2003).
The aspect of customer service or the ability to provide the company's market with their best ability to serve has always been considered as key to their success. However, it has also been acknowledged in the business world that there is a difficulty in defining and analyzing customer service because of its relative complexities. The notion of satisfying the market is of paramount concern because it is this market which generates the revenue of the company. The aspect of customer service related to the distribution strategy can be analyzed and formulated by different perspectives. One of which would be looking at transaction elements which happens during the process of transacting and invariably affects the level of satisfaction of the customer. This may include on-time delivery and even other functions related to function such as order fulfillment and the ease of order taking (Rushtom et al, 1989).
The retailing sector, specifically, is one of the major businesses which should carefully evaluate distribution strategies especially among its vast set of suppliers. Most retailers are into fast moving consumer goods. This means that the movement of goods happens very quickly. With that, it is undeniable that manufacturers must take into consideration their supply chain management in order to be assured that they can deliver their products efficiently and that they can replenish such also as quick as they can to be bale to avoid problems related to inventory or stocks. Retailing activities include different means of purchasing such as the internet and the physical presence of the shopper in retail stores. The changing behavior of the customers and the changing environment in the economy are some of the major factors which affects retailing making suppliers more cautious of their logistical efforts to deliver (Londhe, 2006).
Product availability is one of the main tasks associated with retailing and distribution. Manufacturers must always be sure that their products are available in their major suppliers in order to generate revenue and to be bale to reach their target sales. It must be assured that there are enough stocks among major retail stores to be able to supply for the unpredictable demand. Forecasts should be carefully formulated ahead of time to be assured of enough supply in the stores. The manufacturers and retailers should be aware of the existence of the retail mix which includes storage facilities, inventory, transportation, unitization and packaging, and communications. The careful examination of this mix will assure the mafacturers and retailers that there will always be ample supply to meet the demands of the market despite the uncertainty in the demand of the consuming public (Fernie & Sparls, 1998)
The case which was presented shows a number of customer complaints on a retail shop which indicates the failure of the organization to be able to provide customer satisfaction among its shoppers. It assumes that these complaints are the main reason on why the shop fails to deliver quality service to the public. Some of the problems which were identified include long queues, out of stock of major products, lack of sales people, restricted choices, and unhelpful staff. Some of the problems which were identified are key distribution concerns and should be given immediate attention not only by the supplier but by the manufacturer as well.
As shown in the literature review, the role of the manufacturers should be carefully planned especially to be assured of the proper cyle of their products in the retail stores. The case presented showed problems which are related to the unavailability of some of the core products because such is lacking from the inventory of the retail establishment. Such can be attributed and assumed to be a result of the failure of the manufacturer to monitor the maount it was able to supply relative to the amount demanded by the public. One of the recommendations for this is the establishment of an advanced system which can be able to monitor the manufacturer's available stock in a particular retail establishment. Such technology must be able to provide accurate information regarding the quantity of available supply so that the manufacturers can be able to supply whatever is lacking to be able to close the gap between the demand and supply. An efficient replenishment system is essential so that they can be assured that once their products get out, it can be immediately replaced inside the retail establishments so that no problems will occur related to the availability of stocks. Part of the solution to this problem would be the establishment of an effective warehouse which can house enough stocks and the establishment of an effective delivery or transportation system which shall ensure on-time and accurate delivery of stocks when unavailability occurs. The availability of the drivers and vehicles are of paramount concern. It must be assured that they are always available and also effective to be bale to ensure the proper delivery of their products.
Furthermore, it must also be assured that there is a proper ordering systems. This may include the proper date and time of delivery. What should be done is that once the critical level of stocks is reached, the manufacturers must be informed so that they can be able to produce the needed quantity and that they can deliver what is lacking on the demand. A proper communication policy can also be recommended to be able to properly understand the movement of goods.
WalMart is the world's leader in the field of retailing. Its stores comprise of various global suppliers which were able to reach their target markets because of the efficiency of the retail chain. Nonetheless, it should be noted that it should not be all the efforts of the store which should be considered. The process of the manufacturer with regards to distribution management should also be understood especially in gauging the success of the products in terms of quantity purchased from WalMart. Over the decades, the management of this world renowned retailer has been active in discussing with its manufacturers the process of developing a powerful supply chain management policy because they believe that such is a major ingredient for success. Such is geared towards the ability to increase the efficiency of product flow. WalMart is said to be very tough when considering the manufacturers of the products it sells as they emphasize their nees to reduce their purchasing costs. With this, they tend to bypass all intermediaries which are not actually concerned with the actual delivery of the supply to be able to incur costs which are relatively lower. The company is also said to have real time information to be able to manage data related to its inventory of available supply. Some replenishment are done daily especially if warehouses of their manufacturers are geographically located in a convenient location.
For manufacturers who are supplying WalMart, the considerations mentioned above should be emphasized. If they would want to target this retail store, they must be assured that their prices are the lowest among any other available competitor. However, it must be noted that the manufacturer should not sacrifice its logistics costs just to be able to bring the prices of their products at a lower rate. If they plan to enter their products in WalMart, they must be able to minimize their costs to a sustainable level while trying to make sure that they will still be bale to deliver efficiently and effectively. Moreover, since the retail establishment employs a sophisticated IT system, manufacturers must be assured that they can also provide an accurate monitoring system which will alert them once they have critical stocks at WalMart so that they can ensure fast delivery and replenishment. They must also be assured that they have enough supply. Since WalMart is a leader in retailing, manufacturers must be assured that they will be able to accommodate and properly forecast the demand so that there will not be any issue or problem regarding the unavailability of their products, which as discussed earlier can lead into customer dissatisfaction therefore making them fail to reach customer expectations and the quality expected of them. With al of these, it must be emphasized that the distribution strategies of the manufacturers must be able to address the key concerns of the general buying public. To be successful, there should be proper management of stocks and the supply chain to be able to be assured that they can deliver the products in the most efficient and effective way.
Fernie, John., Sparks, Leigh; Logistics and Retail Management: Insights Into Current Practice and Trends From Leading Experts; 1998
Kapoor, Satish K., Kansal, Purva; Basics of Distribution Management: A Logistical Approach; Prentice Hall; 2003
Londhe, B. R.; Retail and Distribution Management: Theories and Cases; 2006
Manhattan Associates; Distribution Management: Control and Collaboration from Supplier to Customer; Retrieved on April 12, 2010 from http://www.manh.com/solutions/distribution-management
Rushton, Allan., Croucher, Phil., Baker, Peter; The Handbook of Logistics and Distribution Management; Kogan Page Limited; 1989