If a main objective of fight for a share of the FMCG market is increase in cost of the company, then a main objective of fight for efficiency is increase in operating profit. It is reached due to maximizing revenues (ability to sell more production at higher prices), and due to minimization of an account part (management of expenses — on raw materials purchase, production of a product and its distribution on all chain: production – distribution — outlets – the end user). You should use a specialized software for this purpose bpmonline.com/crm/sales-distribution-management-software.
By means of the distributive system of work of distribution production companies can achieve not only stability of presence of a product at key segments of retail, but also to minimize expenses:
on freezing of money in excess stocks of goods on all sites of a distribution channel: production — distribution — retail;
on freezing of money in illiquid positions of goods.
Also by means of the distributive and touch system of distribution production companies can predict load of the production lines more precisely.
To operate the movement of a product you need an ability to operate outflow of goods from each site of a chain of distribution of a product. Those production companies which are capable to operate systemically movement of goods on a distribution chain try to obtain the maximum effect.
How to define to what site of a chain of distribution of a product the production company operates movement of goods? If producer is capable to see shipments of a product only from the warehouse, then he operates movement of goods to the distributor. If he is capable to see shipments of goods from the distributor, then he operates the movement of goods to outlets. If the producer is capable to see dynamics of sales of a product from outlets, then he operates the movement of goods to the consumer.
Traffic control of a product to the distributor
Actions of production companies which are capable to see the movement of goods only to the distributor are concentrated on how to load warehouses of distributors the range of goods to execute sales volume. Actually the distributor is perceived as an outlet.
In such production companies it is possible to observe how the head of sales department presses area managers on implementation of the plan. If the trade department isn’t able to implement the plan, the distributor can “merge” production to other regions or say that sales plans are unreal.