Tuesday, January 10, 2017

Factors Affecting Distribution Network Design

By Christine Smith

Without proper supply tactics, many products would not have the chance to be seen in the market and consumers would not know about them. Manufacturers have to set up proper plans to ensure that their products reach users in a timely fashion. These plans are better known as Distribution Network Design and they include people, stores and transport facilities.

The reason some products do not reach some destinations is because the makers of that product do not market it well and have not specified an approach for them to get to that destination. Different products need different approaches to supply them successfully hence firms should be very cautious of the approaches they implement.

Selecting the right plan will be crucial for the business. The design chosen will determine how the product will be handled and how fast it will reach its desired target. To select the right system, one has to understand the product, is it perishable or does it have a long shelf life. Again if the product is for consumption, one has to make sure that proper retailers are involved in the process to ensure the product reaches its market.

Looking at how competitors distribute their products will also aid in helping select a reliable plan. Most companies will use almost similar methods of distribution and overlook some other methods which may turn out to be more effective. The point is always to make sure that a selected design will beat the one used by a competitor in all cases.

With the main goal of doing business being revenue generation, most companies tend to focus on this and forget the important aspect of customer satisfaction. To make sure the consumers are satisfied with the product, a firm always has to train its employees on how to market the product and assure consumers satisfaction. However, the firm has to verify that it does not spend too much on the trainings yet have few paybacks from it.

Many organizations settle on a distribution plan that will cost them the least to implement. When cost is the major factor in making such a decision, often the efficiency of the system will be put to the test. An organization should do all it can to ensure decisions are not based solely on revenues and after a decision is made, the selected design should be followed religiously to ensure the organization stays on course.

It is vital to be aware of the rules and regulations set by relevant authorities that affect the distribution process. These authorities are responsible for setting taxation percentages and other rules for distribution services. These rules might be changed on a regular basis and if the heads of an organization are not updated, they might make mistakes which will put their organization on the wrong side of the law and this might incur them other charges, hence limiting profits.

Firm heads are advised to have a list of possible strategies to use and from that list they can rate the strategies from the one they feel will be most suitable to the one they feel will be least suitable. After a strategy is implemented and is working properly, they are allowed to look for other strategies that complement their main plan in order to increase service and profitability.

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