Preshita Chaurasiya
2013030
“Non-Competing Companies Can Join Hands to Bring Down Costs”
Sunil Duggal, CEO, Dabur India, on ways to control distribution costs.
1.
Optimise field
resources: Field resources account for a big chunk of total costs in
distribution. Deploy market-interfacing resources on the basis of channel needs
and servicing complexities. Incentive structures should be linked to results as
this will ensure greater efficiency while utilising the same resource and
thereby bring down relative cost.
2. Improve process quality: Automation of the
order-booking process of stockists can result in faster and error-free
processing. Technology can be a great enabler — at Dabur, this has given us
real-time data visibility on orders and helped us optimise the type and size of
vehicles to be deployed at the depots.
3. Adopt a hub-and-spoke model: Reduce the
replenishment cycle for orders to lower excess inventories. This will mean a
significant drop in godown space required, which can mean huge gains. A
hub-and-spoke model in the supply chain network and increased frequency of
despatches can also help stockists reduce warehouse space.
4. Negotiate better terms: Companies have
been using their clout with financial institutions to ensure their stockists
get better terms that bring down their financing costs. With the advent of
facilities such as real-time gross settlement, which enables instant credit
into the account, despatches can now be made on the same day, significantly
reducing time and costs.
5.
Optimise physical
distribution: With a business configured under company-provided transaction systems,
information on market delivery requirements can be made available dynamically.
As a result, stockists can reduce delivery costs by choosing the appropriate
delivery vehicle, considering the load factor. Ideally, non-competing companies
can also join hands to combine deliveries to bring down the costs at the
aggregate level.
No comments:
Post a Comment