Distribution Best Practices

Proven Distribution Leading Practices to Adopt

  • Best Practices (#132) / Distribution / Channel Design & Management

    Best Practice (Good)
    Set up quarterly (or bi-yearly) meetings between product managers and engineers with field channel management partners. Allow channel partners to ask questions about product specifications, development methodology and manufacturing processes.
    Typical Practice (Bad)
    Allow only channel managers to interact with channel partners and hold meetings with partners on an ad hoc basis, based on channel performance, product changes or launches.
    Benefits: Improves the product knowledge of distribution channel sales force teams, and reinforces the competitive advantages of the company’s products with channel partners. Also gives product managers and engineers insight into the channel management and sales processes.
  • Best Practices (#133) / Distribution / Channel Design & Management

    Best Practice (Good)
    Implement a triangulation method for developing forecast models, using data on seasonality, cycles, sales funnels, supply or production constraints and crowdsourced information to produce the most accurate forecasts.
    Typical Practice (Bad)
    Allow a small group of demand forecasting staff members to develop forecast models using historical demand data and seasonality trends to inform model generation. Update forecasting models yearly to improve accuracy.
    Benefits: Although no model will be accurate every time, using additional sources, such as crowdsourced information, can improve accuracy and increase model flexibility by providing additional adjustable variables.
  • Best Practices (#134) / Distribution / Third Party Logistics Management

    Best Practice (Good)
    Create lasting partnerships with third parties such as customs brokers, freight forwarders and other third-party logistics (3PL) providers for large-scale, high-distance shipping operations (especially international operations). Choose 3PL partners based on a combination of expertise.
    Typical Practice (Bad)
    Set up shipping facilities across regions globally to control the transportation of company goods and services, and use third-party logistics services sparingly. When a third party must be brought in, focus on low-cost solutions.
    Benefits: Developing relationships with regional 3PL providers allows clients to take advantage of distributors with substantially more experience in their particular region or area of operation. Developing these relationships also mitigates risk by transferring partial responsibility to third-party logistics providers.
  • Best Practices (#135) / Distribution / Third Party Logistics Management

    Best Practice (Good)
    Require third party logistics providers to offer real-time visibility of their cargo and fleet, so that delivery schedules can be tracked more accurately, allowing for additional flexibility when determining the next day's/week's shipping schedule.
    Typical Practice (Bad)
    Rely on third party logistics providers with manual delivery processes to track orders and coordinate shipments for the next day. Typically, updates on delivery status can only be obtained manually through communications with fleet drivers.
    Benefits: Real-time cargo tracking increases third party logistics providers' accountability, provides additional intelligence for distribution planning and eliminates unnecessary communications with fleet drivers/managers.
  • Best Practices (#136) / Distribution / Logistics Health & Safety

    Best Practice (Good)
    Establish an ongoing training program that relays to front-line staff any changes in health and safety procedures as a result of new company or government compliance standards. Hold quarterly meetings with front-line staff to discuss health and safety to identify potential improvements.
    Typical Practice (Bad)
    Communicate the company, government and product health and safety procedures/standards only during new employee training and promote safety with posters and memos placed throughout the facility.
    Benefits: The company will have all necessary information about their products. As such, there will be no need for rework as data analysts will not have to gather product information that should have been entered in the first place.
  • Best Practices (#137) / Distribution / Logistics Health & Safety

    Best Practice (Good)
    Place first aid kits strategically throughout the facility based on the number of workers in a given area and which areas have historically higher incident rates than others. Check first aid kit supply levels monthly and replenish them as-needed. Organize regular first aid courses and make sure the staff is aware of certified staff members in the event of an emergency.
    Typical Practice (Bad)
    Make first aid kits available in designated areas within the facility, available for staff to use in treating minor first aid issues. Check first aid supply kit levels on an ad hoc basis and resupply when needed.
    Benefits: Holding safety and first aid-related training ensures that the workforce is aware of potential workplace hazards and that they are adequately trained to respond to incidents. Placing first aid kits strategically throughout the facility reduces the amount of time needed to retrieve first aid kits in the event of an emergency.
  • Best Practices (#138) / Distribution / Fleet Management

    Best Practice (Good)
    Perform a yearly life-cycle analysis of fleet assets to determine optimal vehicle replacement time based on depreciation, maintenance cost, overhead, fuel consumption and resale value.
    Typical Practice (Bad)
    Replace fleet vehicles on a case-by-case basis, taking into account total maintenance costs over the life of the vehicle and the cost of maintaining that vehicle versus purchasing a new one.
    Benefits: Provides a standard timeframe for vehicle replacement and reduces fleet maintenance costs by improving technology related to vehicle safety, fuel cost and maintenance frequency. Using this strategy can also improve the resale value of fleet assets that are being phased out.
  • Best Practices (#139) / Distribution / Fleet Management

    Best Practice (Good)
    Implement a fleet gas credit card program for drivers to refuel their vehicles, restricting usage of the card to a set number of times per day with a dollar limit per each transaction.
    Typical Practice (Bad)
    Provide drivers with set allowance for refueling their vehicles during transit. The time and amount of each individual refuel cannot be logged, and data on individual fuel purchases is not available, which limits cost tracking capabilities.
    Benefits: Allows for an accurate, real-time, and easily accessible measurement of how much gas fleet vehicles/drivers are using. This helps identify which drivers are using more gas and at which times, allowing fleet management to drill down on specific improvements related to gas consumption.
  • Best Practices (#140) / Distribution / Order Picking & Shipment

    Best Practice (Good)
    Strike an acceptable balance between package efficiency and strength, and ensure that the pallet space used in transportation is completely used (no excess pallet space) by the units being shipped.
    Typical Practice (Bad)
    Pack units on any pallet available in preparation for transportation. Focus on cost-effectiveness and environmental concerns when designing product packaging.
    Benefits: Maximizes the number of units on each pallet and ensures that packaging is both cost-effective and able to withstand drops and shifts during the transportation process. Also reduces distribution costs by allowing more units to be transported in each shipment.
  • Best Practices (#141) / Distribution / Order Picking & Shipment

    Best Practice (Good)
    Standardize packaging for all products based on weight and physical dimensions, housing this information in a database easily accessible to both designers and front-line packaging agents, and field suggestions for the standards from both. Define levels of damaging risk for product materials and create packaging guidelines accordingly.
    Typical Practice (Bad)
    Create product packaging on an ad hoc basis relative to the goals of packaging each product (e.g., durability for certain products and accessibility for other products).
    Benefits: Reduces total packaging design cycle time by standardizing packaging specifications. Allows package designers and front-line packaging staff to be easily informed about packaging specifications, and front-line staff will be able to identify quality control issues more efficiently.

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