Whenever I visit a distributor, I always make sure I pay a visit to the warehouse manager and invite him to show me anything he believes we could improve. If possible, I would ask one of our logistics managers to come with me, provided they can share the same language. Try it if you have never done it before. You will discover the impact of the cost savings policies your company implements without necessarily realizing that the cost is actually only being transfered elsewhere.
Distributors quite rightly represent themselves as a bank and a conveyor belt between the Vendor and the Channel Partner; a direct extension of the Vendor, so when we change the way we package or ship something, we should remember that our logistical extension is going to have to cope with it. They also need to operate efficiently so we should always make sure that our decisions aren’t at the cost of our Channel and that we are always doing what is best for them. Here are just two real life examples:
- No more packing list! Distributors across Europe started complaining that we were omitting the pallet packing list, costing them additional time to work out what had been delivered. our logistics center confirmed they were being applied as per the procedure…in fact, the new packer in the Dutch warehouse (lots of warehouses in the Netherlands) was 2.10m (6ft 8in) tall (lots of tall people in the Netherlands) and was simply slapping the label on the top of the shrink wrapped pallet where about 1% of the world’s population could see it. A change to the procedure solved the issue.
- Finding the colors. I was once told by an angry warehouse manager that they had to open every carton of 8 toner cartridges they received -and they received pallet loads of them every week- each box taken out for the staff to know which color they were to receive in their system.
- This didn’t seem to make sense until I found that our logistics center was actually re-using old cartons to ship mixed sets of toner.
- We then found that the cartons had been designed in such a way that once opened, you had absolutely no way of knowing which color was in each box since the markings on the boxes were on the wrong face of the box.
- Of course, the mixed cartons were never marked as mixed,that would have been far too simple.
- Finally, we discovered that rather than recommending or enforcing standard quantities (of 8), we were letting our Partners order free multiples. In our western culture, people tend to order metric multiples of 10 or dozens -never multiples of 8. So we always ended up with a mixed carton.
As a result of the strong relationship we built with the logistics teams of our Partners, our Brand became synonymous of ease to do business with. This invariably got back to the senior management of the distributor who would then use their influence to increase their sales of our products. It became a real win-win situation, reducing both our and their cost of doing business.