Almost thirteen years ago I started out on a joint project for IDEA to prove the value of synchronizing product data between the manufacturer and their distributors. The assumption, which was proven correct, was that the electronic flow of matching data & documents between the manufacturer and distributor would allow:
- EDI transaction sets to be exchanged, from order, advance ship notice, invoices, receiving documents and etc.
- Allow distributors to more quickly claim their SPA’s and receive credit back, even over weekends.
- On the manufacturer side it meant that they could move personnel from hand handling stock orders and assign them to other activities.
- That proved to be true for a large number of distributors and some manufacturers.
- Some of the additional fruits that distributors harvested were three way matching of electronic documents that allowed the manufacturer to be paid quicker with a tolerance range set by the distributor.
- The flow through or throughput of business by some subscribing distributors increased dramatically.
- The same data allowed distributors to set up warehouse automation and zone picking.
But the one thing that usually happens when all the stars align between distributors and manufacturers, is that some complacency set in. Or maybe it is not understood by the person that is developing the data for the manufacturer. It occurs in the area of standard box sizes….or some would say “just how many are in the standard package?”
Mind you I’m not pointing fingers at any one company. The operational gain for both parties (manufacturer and by extension the manufacturers rep and distributors) warrants that the manufacturer take a look at your own data. Specifically you want to look at what is the unit of measure. If one (1) represents a carton, how many are in the carton/standard pack or box. The clearer it is the more gain there is for all.
From IDEA’s side of the fence, when you hear about this problem from a distributor, you need to run this problem to a solution. The gain for all parties is huge, so joint solutions are required.
One of the tremendous by-products from that original study was that there is the availability to shift personnel around to generate more profits for all.
4 Comments
I am curious what prompted this post? Specifically referring to the discussion / comment about standard package / quantity?
Greg
While working for a client on unplanned inventory growth (it was growing and they didn’t want it to grow that much or fast) and other productivity issues, there were repeated issues with some manufacturers data that related to the quantity field.
What ever is in the Quantity field could represent a standard package size(maybe a carton) that might have say 24 units in the carton as an example. The number in the quantity field could be one (1)
Should a manufacturer choose to change the actual quantity inside say a standard carton, it could cause the distributor to grow their inventory in ways that they don’t to.
If you like to discuss I can be reached at 817-271-0236
This is a phone call from a Mid-western distributor: “What do you suggest that I do with this Tier One manufacturer that really doesn’t seem to care? They represent about 48% of our total sales dollars.”
Allen: I suggest you sit down with their Zone or Regional manager and explain what you are trying to do about becoming more productive and how you’d like to re-direct that overhead into profit making activities. If they’ll listen, then I would use some of the product data mistakes as illustrations.I would not ask for money nor threaten them.If no satisfaction, I’d go further up the chain. No satisfaction, You should look at another line. Easier said than done. Right? I would make the effort.
Also, you’ll probably do this on your own…talk to other distributors out of your area. See what they say. If it is the same problem, maybe both can bring some pressure to bear. I would make it known to IDEA. They can probably work with the manufacturer.
In the heat of battle, sometimes certain elements of data don’t get asked for. So you may have to ask for the inner pack and std package per SKU. Depending on the manufacturer, it may have to come from a manufacturer’s actual manufacturing database.
For those who have not loaded this in your ERP software system…..it would be a wise use of time if you do.
While your at it, check and make sure you have the most up to date manufacturer’s freight terms…you really want to have EOQ work for you, so you don’t have that big chunk of freight at the end of the year.
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