Route to Market – Increase Outlets in Service
Increased outlet penetration generally increases sales, market share and market control, over the long-term.
The Client Change Rationale
There exist +600 thousand active outlets in the country and the company is servicing directly 30 thousand of them. The client wants to establish an outlet penetration program where at least 400 thousand new outlets are put into direct sales and service over period of 3 years time.
Every local market has its uniqueness that drives the need for designing of various sales, marketing and delivery services systems aimed to maximize the service levels at the lowest possible cost proposition.
For many companies to drive competitive advantages, direct route sales systems to customers and consumers is a vital part of their services systems design. Having control over direct sales to customers and consumers creates competitive advantages through better control at the point-of-purchase. This includes controlling the delivery service levels, service frequencies, and service quality and product availability. Furthermore, better control over new product introductions, building stronger customer relations, cash-flows streams and stronger sales mix control and order picking and packaging quality, to name few. Planning the distribution services is a dynamic task to undertake and the process takes into consideration multiple factors that call for generating the right balance between service levels and costs. Strongly built distribution system creates competitive advantages through generating a balance between perceived value added services at justifiable costs.
TPC-Consulting helps its clients to design and develop the most effective and efficient sales and delivery services system. When planning the direct sales and services the objective is to design effective and efficient sales and delivery systems that support execution of the point-of-purchasing marketing strategy. In general customer demand at outlet level drives the distribution system design. In other words, all the firm orders generated by sales must be delivered to customers or consumers within a pre-set timeframe and guidelines. In a pre-selling system there are two separate universes of services systems that correlate or mirror with each other, they are; “the sales route system” and the “delivery route system”. What the sales routes and delivery route system have in common is the “call day”. In other words; what sales are selling today must be delivered tomorrow, that is if the lead-time from order to delivery is 24 hours. Thus, planning of the “call day” is the core to design and develop the optimal route planning structure. Moreover, the basic rule in a pre-sales route planning system is to start with optimizing the distribution route system and after that transform the call day back to mirror the daily sales routing system. In that case the sales and distribution routes are route planned as being two optimized systems – aiming for optimization of the distribution system as the core planning target.
When designing and developing the most effective sales and delivery services systems then all major cost and services factors must be addressed and planned for. One must take into consideration the constraints, barriers and the external operating factors such as; infrastructure, distances, traffic, road network, product characteristics, flexibility, regulations, restrictions and geography, for example.
In difficult and costly service areas then effective and efficient delivery solutions must be designed and developed. This means developing practical distribution methods that overcome high cost as a result of servicing these areas or outlets. Constraints and bottlenecks could be associated with having to adapt to specific service requests from customers, to overcome traffic congestions or, to comply with city time restrictions, for example. The constraints must be spotted and a practical resolution assigned to overcome excessive delivery and services costs. Lowering distribution cost might require adding new distribution centers, cross-docks, fast flows, swap bodies, night delivery services or by servicing the largest customers directly from the production plant, for example.
TPC-Consulting Core Modules and Content
- Infrastructure plan
- Market and services assessments
- Sales and services systems design
- Organizational structure design
- Rerouting sales and distribution and route balancing
- Kick off and contingency planning
Training and coaching is an essential part of designing and developing the most effective and efficient route to market sales and services systems.
Big part of TPC-Consulting assignments is associated with designing and developing new sales and services systems for its clients, both in established and developing markets. Based on the many years learning and experiences the confident levels for successful change transformation is high. The learning in rerouting and reorganizing sales and services has increased sales and market share for the companies involved.