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Ideal Distribution System

Agenda Click to edit Master subtitle style Understanding the ideal distribution system of FMCG business

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Intro to FMCG

FMCG represents Fast Moving Consumer Goods that are branded and packed as per the strategies of the Manufacturer or the Band owner. Products like Soap, tooth paste, face creams, disinfectants, cleaning products, biscuits, toffees and so on are some examples for FMCG products. Products like wheat, rice, oil and

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FMCG Products and Packs

FMCG products are packed into different volumes as per the market pull or manufacturer convenience. The different packs are called as SKUs (Stocking Units). For an example, if a detergent soap of same brand is available at 50 grams, 100 grams and 200 grams, there are 3 SKUs. The products are packed in a basic

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Traditional Distribution System

Conventional distribution system of FMCG is having C&FA (clearing and forwarding Agent) where all the products of the company is stored from different manufacturing plants. From C&FA, the stocks are dispatched to the distributors. The distributors supplies the stocks to shops and wholesale agents.
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Manufacturing Plants

C&FA

Distributo rs

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Shop s

Distributors can be appointed in major cities.

Drawbacks with Conventional Distribution System

Distribution to far places (small towns near by) by distributor is not advisable. Appointing distributor in small potential area will lead to lot of problems like excessive stock in slow moving articles (as it comes in 4/19/12 carton), accumulation of damages or

Director Distributors only in major cities with specific minimum volume of business. Super Distributor acts like a C&FA to supply to small towns. Small towns will have sub-distributors who’s volume is lesser. The advantage of taking stocks from super distributor is the quantity of order can be minimized less than a 4/19/12

Proposed Distribution System

C&FA

Distributo rs

Super Distributor

Shop s

Sub Distributors 4/19/12

Benefits of this system

Damages will be drastically brought down. Reduction in expired products. Administratively efficient system is set to promote the activities. Domination of Whole Sale market will be controlled. Infiltration, price cut will be controlled. 4/19/12

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