Distributor Supply Chain management refers to the approach taken to deliver goods to customers. By implementing a well-structured distribution plan, the time taken to deliver products can be reduced. When searching for the most effective way to market products, companies can select one of four primary distribution channels. Tools like supply chain management software programs can be used to manage distribution channels effectively. Let’s dive into this Viindoo's blog.
What is a Distributor Supply Chain?
The manner in which businesses transport their products to customers is known as supply chain distribution. The approach taken for distribution is dependent on the financial and corporate objectives of the business. While some organizations may choose to sell their products to customers directly, others opt for third-party distributors. Formalization of the supply chain distribution plan is crucial for success.
The creation of a plan involves an assessment of various distribution options and the selection of the most appropriate for the customer base and product line. Formal distribution plans reduce the number of days taken between order placement and delivery. According to Supply Chain Management Review, businesses with well-developed distribution plans typically require only two days to fulfill orders, while those without plans require ten days. Supply chain distribution helps to balance supply and demand. An effective distribution plan should be able to handle various market changes, such as supply disruptions and increases in demand.
What is a supply chain distributor?
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What is the difference between distributor supply chain and logistics?
In supply chain management, the terms distribution and logistics are often used interchangeably, but they are not exactly the same, and transportation marketing is becoming increasingly important.
Logistics refers to the process of moving products from their origin to the location where customers purchase them. It focuses on finding efficient routes from warehouses and inventories to points of sale. It involves various processes such as materials handling, supply and demand planning, information flow, supply chain security, inbound and outbound transportation management, fleet management, production, network design, order fulfillment, and third-party logistics (3PL) management if the logistics processes are outsourced.
On the other hand, supply chain distribution is the practical application of logistics. While logistics determines how products will be delivered from the manufacturer to the point of sale, distribution actually involves the successful delivery of those products to their intended destination. For instance, if a department store orders 300 units of your product, logistics will determine the most cost-efficient way to transport those units to the store, and distribution will involve activities like inventory management, packaging, and warehousing to ensure that the order is successfully fulfilled.
The difference between supply chain distributor and logistics
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What are the four channels of distribution?
The supply chain comprises four primary distribution channels, each of which may suit one type of business and not another.
- Direct sales involve delivering products from the manufacturer directly to the customer, and this channel works well for products with a mid-range price point, affordable enough to have a broad appeal, and with an extended shelf-life.
- Brokers act as intermediaries between manufacturers and retailers and are commonly used in the food industry to sell products to grocery stores. They do not directly ship products but handle the sale contracts.
- Wholesalers purchase products in bulk from the manufacturer to sell at a higher price point through resales. As resellers, wholesale companies take on more risks if the products do not sell since buyers purchase directly from them.
- Dual distribution involves using multiple strategies to get products to customers, such as direct sales and wholesale. Franchises often use more than one distribution channel.
The advancement in technology is revolutionizing the way products reach customers. Emerging technologies are challenging traditional distribution channels and supply chain management practices, with new entrants into supply and distribution markets in various industries. The internet and the introduction of end-users into supply chain distribution are disrupting the traditional supply chain.
Successful distribution and supply chain management require a centralized hub supported by satellite chain distributors. The “new” supply chain and distribution channel has several key components, including physical logistics of moving inventory along the chain of distribution, inventory management, and identifying the real customers to maintain their loyalty despite the changes in the supply chain and distribution channel.
Four channels of distribution
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Use supporting distributor supply chain management software
Viindoo Supply Chain Management software is a comprehensive software solution that optimizes business processes, warehouse management, and inventory management while improving the process and service of delivering products to customers. It provides businesses with a big picture that helps them keep up with the ever-changing market and improve their competitiveness. Viindoo SCM integrates every module, including Purchase, Sales, Inventory, Manufacturing, Accounting, and Finance, into a single platform, making it easier for distributors to manage their supply chain.
The software's general features enable businesses to manage their supply chain comprehensively, including overall strategy planning, purchase management, manufacturing management, inventory management, sales management, and accounting and finance management. Viindoo SCM also helps businesses build an optimal and efficient supply chain by supporting overall strategy design, sales process setup, supplier network setup, and inventory management.
Viindoo SCM is designed to automate and standardize every aspect of the ERP Supply Chain, saving time and effort while improving efficiency. The software enables businesses to set rules for activating replenishment requests, automate replenishment processes, record all landed costs, and automatically create allocation journal entries to adjust stock prices. Viindoo SCM supports multiple inventory valuation methods, including standard price, FIFO, and average cost.
Viindoo SCM integrates and manages every app in one platform, enabling an open system that connects every aspect of the supply chain. It enhances logistics control, collaboration efficiency, better supply chain risk management, and responding quickly to changes in the market and consumer needs. This makes Viindoo SCM an effective tool for businesses to optimize their supply chain, improve their performance, and enhance customer service.
In conclusion, Viindoo SCM supply chain management software is a reliable and valuable tool for distributors looking to optimize their supply chain management processes.
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Hopefully, our blog can help you understand distributor supply chain management. Follow the Viindoo blog for more valuable insight and digital transformation news in the future.
What is the role of distributors in the supply chain?
Distributors play a critical role in the supply chain by sourcing products from manufacturers and delivering them to retailers or end-customers. They also manage inventory levels and provide customer support.
How can technology help improve distributor management in the supply chain?
Technology such as transportation management systems, warehouse management systems, and enterprise resource planning systems can help automate processes, improve visibility, and reduce costs.
What are some common challenges faced in the supply chain of distributors management?
Common challenges include lack of visibility, complex networks,cost pressures, and supply chain disruptions.
How can collaboration with stakeholders improve distributor management in supply chain?
Collaboration with suppliers, customers, and logistics providers can improve communication, coordination, and information sharing, reducing friction and improving efficiency.
Why is continuous improvement important in distributor supply chain management?
Continuous improvement allows for identifying opportunities for optimization, implementing changes, and measuring results. Encouraging a culture of continuous improvement throughout the organization ensures that processes are always being optimized to improve efficiency and reduce costs.