Over the past few months, we’ve given you tips from our latest eBook called Advanced Issues in Redistribution. Simply click the icon above if you’d like to download your free copy. Otherwise, read on and we’ll recap all of the material covered.
This is the final installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
Along with decades of work in the foodservice channel, I’ve also had the opportunity to work with manufacturers, distributors and wholesalers in the janitorial and sanitation (jan-san) supply channel. Like their foodservice counterparts, jan-san manufacturers and distributors are working to figure out how best to use wholesaler redistribution to optimize supply chain costs and customer service.
While I have no hard data to back it up, my experience is that the jan-san channel has a much higher preponderance of small orders being shipped from manufacturers to distributors than the foodservice channel. And I think it’s also fair to say that many jansan manufacturers and distributors have been slower to embrace the concept of wholesale redistribution than their foodservice brethren.
So we worked with the Sanitary Supply Wholesalers Association to create an Excelbased model that helps distributors calculate the impact of turns, inventory levels, and ROI as well as price when making their sourcing decisions. And at and ISSA Interclean convention, we showed distributors how to gather the pertinent data and use it to help answer the “direct or wholesaler” question.
This is the ninth installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
I’m occasionally asked to throw out a figure for a “typical redistribution program.” The fact is I’ve yet to see a typical program, because the allowances are based on each manufacturer’s cost and price structure.
In addition, the final negotiations between manufacturers and redistributors often involve some “horse trading” which has no relationship to either party’s costs. That said, there are some rules of thumb which generally hold true.
This is the eighth installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
If you’ve been reading Foodservice Marketing Insights for a while, or have worked with me, you know that I am a believer in redistribution. I have seen very few foodservice businesses that cannot be helped with a well-designed redistribution program. Done properly, redistribution supports, complements, and extends your marketing and logistics strategies. That said, there are always risks which need to be recognized and managed, so they don’t become pitfalls. When redistribution goes bad, Finance, Supply Chain, and even Sales people begin to question the wisdom of participating, casting a dark shadow over the program and limiting its effectiveness.
Here are three risks to watch out for:
This is the seventh installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
Of all of the relationships in our industry among manufacturers, distributors, operators, and brokers, perhaps none requires more of a commitment than the relationship between a manufacturer and a redistributor. Why is this?
This is the sixth installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
It seems that in the foodservice world, there are those who “get” redistribution, and those who still don’t “get it.” Despite the success of Dot Foods and other redis, and Sysco’s move into internal redistribution, I still hear naysayers who are convinced that redistribution adds unnecessary steps and costs to the foodservice supply chain.
But it’s also fair to say that even people who have committed to the redistribution concept (including yours truly) sometimes struggle to make a clear economic case for a redi program. This is often a result of less-than-adequate accounting systems which do not reflect the cost avoidance side of redi as clearly as they report the cost of the redi allowance.
So just for today, let’s set aside the dollars and cents arguments for redistribution, and present some analogies. With what can we compare redistribution?
This is the fifth installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
Remember the days when we tried to understand the concept of redistribution? When we first started to think about the total cost to fulfill orders of various sizes, and see if redistribution was a feasible alternative? Or when we worried about losing the relationship with a distributor if he elected to buy through redistribution?
This is the fourth installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
It should be obvious to you by now that I’m a “redistribution geek.” Over the past two years, I’ve published a couple of books, led several seminars and workshops, and written these monthly commentaries about a subject that leaves a lot of people glassy-eyed. The truth is…
This is the third installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
A few weeks ago, I was asked if my redistribution projects always result in launch of a new program. The fact is, not all of them do!
I have had several experiences where despite the good faith efforts of a manufacturer and redistributor, the two parties could not come to agreement on a new program. It is sometimes the case that a manufacturer has a very low-cost network, and cannot rationalize increasing his cost by embarking on a redi program.
For instance, some manufacturers ship all of their customers from multiple producing plants, without putting product into regional mixing centers. This forces the distributor to place multiple orders, receive multiple shipments, and pay multiple invoices for a single supplier’s line. In addition, the distributor is unable to take advantage of bracket pricing breaks or volume discounts because his shipments are fragmented.
There is no question that a redistribution program would be highly valued by the distributor, but it is hard for the manufacturer to justify increasing his cost to serve existing business. Unfortunately, the link between “doing something that impacts your customer” and “seeing the business result” is usually lost in time and the complexity of our business (see feature article below).
This is the second installment of Advanced Issues in Redistribution which can also be downloaded from our free eBook library.
It usually starts when you offer a special price to a special set of distributors on special items. The deal is intended to be confined to a certain geographic market (often a large metro area) and/or to distributors and jobbers who serve a niche channel (such as mobile caterers or ethnic restaurants). It’s a strategic decision to gain or hold onto a chunk of volume that is heavily dependent on low prices.
Your special price (plus any sheltered income or allowance programs) provides a low net cost to these customers; often significantly lower than your published prices. And while the deal enables you to reap the niche-market volume, it can get these distributors thinking about other “opportunities” which may not be in line with your overall strategy. You may well learn that your special-priced products are being sold not only to operators outside the niche channel, but also to smaller distributors who do not qualify for your deal. Your “special customer” has become a “guerilla redistributor!” So what’s the problem?
