Home » SCMAP Perspective » Best-in-Class Distribution Model

Today we have another guest columnist from the ranks of SCMAP. Arnel Gamboa is the incumbent president of Supply Chain Management Association of the Philippines (SCMAP). He has been the editor-in-chief of the official newsletter of SCMAP, Supply Chain Philippines, for the past 2 years. He is a seasoned practitioner and resource speaker in supply chain with focus areas in cold chain, fast-moving consumer goods (FMCG) distribution, retail-supply networking, demand planning and supply chain ICT. Currently the head for supply chain in Benby Enterprises, Inc., the leading distribution company for imported world reknown food, personal and home care products. – Ed Sanchez


In today’s fast-paced environment, changes are coming in left and right, in terms of technology, best practices, management style and techniques and much more.


FMCG distribution is one part of supply chain that has taken on a different face ever since it started here in the Philippines. From simple and crude methods in warehousing, purchasing and delivery, distribution has turned into an organized and sophisticated system geared towards raising efficiencies.


In a highly competitive arena, on-shelf availability, customer service level, on-time delivery, delivery in full and on-time, outlet buying, product freshness and quality are just some of the highly-sought after benchmarks in performance.


While the demands for better and high-quality services are becoming consistent with the trade customers, the challenge to operate and produce the required results becomes ever more difficult with the changing times.


More and more KPIs are being included as basis for service excellence and subjected to business reviews; new penalties are designed to ensure compliance with policies that would test and push  execution to the limit; and the physical landscape (road infrastructure and size of businesses or stores) keeps on changing and is becoming more intricate as congestion in the metropolis takes a toll, speed to market becomes a big factor in surviving, and the FMCG industry tries to expand its market reach to the smallest unit of the consumer (i.e. sari-sari stores, CVS).


To cope with these constant hurdles, the supply chain must utilize fair business practices, proven systems and processes, highly-skilled and empowered employees, strong partnership with principals, and Filipino ingenuity.


A three-pronged approach in establishing the best business model for distribution requires PEOPLE, PROCESS & PRODUCTS or 3 Ps.


Right People

Hire the best qualified individuals in the industry and right fit them with the best job they can assume in the organization. THE RIGHT PEOPLE FOR THE RIGHT JOBS.


This goes further by establishing a clear career path for gifted individuals to ensure career growth. The employee grows with the company.


Training, seminars and further development should be designed for each employee to help them be best they can be in their chosen field and maximize their full potential.


People are taken care of not only in terms of compensation. Work-life integration should be a key objective of the company. Happy employees will help ensure success.


Right Process

Embrace and fuse different standards and measures practiced by various MNCs or best-in-class companies. Many MNCs openly share their best practices and encourage other companies, especially locally-owned, to learn from them. The result will be a potpourri of the best practices in SCM – from order to cash; and procure to pay processes.


In line with continuous improvement, the next step would be to establish self-audit and R&D tools to make sure standards and processes remain competitive with the industry. This should provide a body that will monitor, optimize, regulate and enhance the existing systems, processes, standards and reports of supply chain.


Another dimension in warehousing is to oversee the consistent implementation and practice of Good Warehousing Practices (GWP), Fire Prevention and Earthquake Preparedness, Security & Control and Safety, Health, Environment and Quality (SHEQ) Policies.


The right action can only be determined if the right information is made available at the right time. In this sense, investment in an ERP which can help automate reports and forms is suggested. Advanced supply chains use an array of software tools such as WMS, CRM, SCM, and SRM, among others. If the business is multi-sited, the value of having an information system increases further. This provides for accurate and real-time handling of business information and seamless integration of data between departments.


Right Products

There is a need to be keen in partnering with products or brands with a good track record in the industry and that would complement the company portfolio.


Aside from established leadership in their categories, an important aspect in products and brands is the quality they bear and bring to the consumer.


From consumable packed goods (CPG) to health & beauty, the brand quality has to live up to its name and claim. The products delivered to each customer is only of the best quality all the time. Any brand that has become a household name built their success over years and years of providing the best quality products to every consumer.


In the end, the customer is truly king!


Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email secretariat@scmap.org. For more information please go to SCMAP website www.scmap.org

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