| Case 6: A wire manufacturer primarily selling through channel
Illustrative Scenario: Regular sales of around 60 SKUs through channel to consumers
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Before |
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After Distribution Solution
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- The customer placing order every month
- Customer also required to give two months of forecast
- Huge push at the month-end
- Average 60 days inventory at Distributors end and 45 days inventory at Retailer end
- Sales focus on primary sales
- Rampant stock-outs
- Regular bickering from distributors to increase margin
- Rationing during season
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- No more orders
- Forecast only if channel expects any institutional order and during season
- No more push, supply only based on consumption.
- Inventory down to an average of 15 days at Distributors end and 10 days at Retailer end
- Sales focus only on secondary and tertiary sales
- Stock-outs below 2%
- Increase in sales by 40%, profits of the company doubled. Further increase in price by 5%
- No more quota pressure on sales people
- No more rationing
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