The Power of D is moving products through the distribution channel effectively and efficiently. Manufacturers can maximize this power by avoiding some common problems. Freight delivery delays, mislabeled products, missing or misapplied bar codes and goods damaged in shipment bog down the distribution channel. Many of these problems are preventable and result in millions of dollars each year in unnecessary expense to both manufacturers and distributors.
Make it Easy
Distributors are most effective when manufacturers have systems in place that make moving products through the channel mistake-free. Here are four key areas of importance to distributors.
Easy ordering: Recent surveys conducted by pet industry associations indicate that more than 90 percent of manufacturers and distributors either accept electronic orders now or will in the near future. If you’re not there yet, you should be moving in that direction.
Accurate Shipments: Resources wasted sorting out improperly packed or labeled shipments add unnecessary cost to the distribution process.
Good Fill Rates: Shipping orders complete allows the distributor to keep inventory levels lower while facilitating more desirable inventory turns.
On-Time Delivery: Receiving products on time ensures that distributors’ shelves remain stocked. That means no empty shelf space at the retail locations where consumers are looking for your products.
Getting Your Products to Market
Shipping and receiving are at the core of the manufacturer-distributor relationship. If products cannot get from the manufacturer to the customer in good condition, with proper identification for billing and inventory, then the channel breaks down, sales are lost and costs skyrocket. Here are some suggestions to avoid common shipping problems.
Use reliable carriers. Distributors are managing inventory levels more closely today than ever before. Delays in shipping often lead to out-of-stock situations for distributors and their retail customers. Contract with reliable common carriers that have a good track record on timely deliveries. Unreliable carriers lead to lost sales for manufacturers and distributors. Shippers have to look at more than just price when deciding which carrier to use. Go with the best, not the cheapest.
Use better packaging. Use product packaging and master packs that maintain their integrity throughout the channel. That way, the product that ends up on the retailer’s shelf is in the same condition as when it left your facility.
How the products are shipped is as important as packaging. Pallets that are shrink wrapped with corner molding help protect what’s inside better than unwrapped skids. And don’t skimp when buying pallets either. Cheaply made skids can snap, damaging product and adding cost for the distributor if boxes have to be unloaded by hand.
Use proper identification: Mislabeled and poorly labeled cartons create problems because of the impact it has on the distributor’s warehouse management, inventory control and accounting. These problems are the easiest and least expensive to remedy.
How cartons are labeled is of critical importance. Improper use of bar codes and lack of standardization in identification are the costliest mistakes manufacturers can make because of the repercussions throughout all aspects of the distributor’s business.
Where cartons are identified is almost as important as how they are labeled. Carton identification must be on the perimeter where it is easily seen without unnecessary handling.
A best practices task force comprised of members of the Pet Industry Distributors Association and the American Pet Products Association developed the Pet Industry Guidelines for Product ID, Labels and Shipments (GPID). The guide is a comprehensive, how-to guide to standardizing product and packaging identification. There are real channel cost savings available to every organization that uses the guide to standardize package identification and communication throughout the pet product channel.
The more you can work with your distributors to make your relationship more efficient – through proper packaging, reliable shipping and good fill rates – the more you will drive cost out of the channel and get your products to market faster. Then, you’ll feel the full force of the Power of D.