Enchange RtM Programmes: Distributor Development

• Enchange has pioneered a Route to Market programme (RtM) that delivers maximum distributor
performance without the cost of maintaining own direct distribution.
• It is particularly suitable for Producers who use a multi-distributor model in markets with a high
degree of ‘traditional’ non key account trade.
• Enchange has a suite of RtM tools to measure distributor performance & distributor compliance
to producer standards.
• It always delivers a sales uplift (15%+) & improved customer service for producers.

Distributor
Distributor Implementation
Development
Assessment & Rollout
Plans

Timing Month 1 Month 2 Month 3 onwards

• SupplyVue Analytics • Distributor • SupplyVue Analytics

Method • RtM Assessment Engagement • RtM Assessment
Enchange RtM Programmes: Distributor Assessment
The assessment involves the following:
1. Visit to Distributor Head Office
• Detailed discussions with Distributor Senior Management
• Discussions with Operational Management
• Trade visits with Distributor Representatives
2. Analysis of Distributor Data
3. Assessment of Distributor using Enchange Distributor
Assessment Tool (see below)
Enchange RtM Programmes: Distributor Assessment

• 1st Step - measure current performance vs international best practice standards,

using the Enchange toolset
• Performance Categories - the Enchange Distributor Assessment Tool will be
adapted for each client and can measure up to 10 categories. Under each
category, there are at least 10 specific factors that the tool rates to determine
overall scores for the distributor
• Performance Categories can include:
• Strategy • Relationship • Demand • Inventory • Warehousing
Management Management
• Sales • HR & • Finance, • IT/ • Performance
Management Organisation Planning & Information
Budgeting
Enchange RtM Programmes: Distributor Assessment
Examples of Performance Categories and the detail behind them can include:
1. Strategy. In a seamless supply chain where no one organisation controls the whole process the
distributor’s strategic plan should be aligned with the strategic thrust of the client. We will assess
the extent to which this is the case.
2. Relationship. A distributor should act as a true partner, demonstrating commitment and working
collaboratively with the client in the sale and distribution of products. The relationship should be
characterised by a high level of trust and a sharing of risk, reward, investment and is unlikely to end
in the near future. The partnership should be supported by a long term contract which is mutually
beneficial, and a Service Level Agreement (SLA) that underpins the day to day operations.
3. Demand Management. Demand management is the process of understanding the demand at all
levels in the supply chain from the consumer back through the retailer and the distribution network
to the factory and the suppliers of raw materials. In relation to demand management at the
distributor level, demand management means that processes are in place to accurately capture the
consumer behavior at the retail level and to have visibility of stock in the outlets. The purpose of
understanding the demand is to enable the distributor to create a forecast in collaboration with the
client to ensure that sufficient stock is in place to meet the demand. This will be assessed for all
client distributors.
Enchange RtM Programmes: Distributor Assessment
4. Inventory Management. Inventory Management is deciding where to position inventory and when
to replenish the inventory in sufficient quantities to meet demand. Inventory management is about
having the right stock, at the right place, in the right quantities, at the right time to serve the
consumer needs at the lowest cost. The effectiveness of this will be assessed.
5. Warehousing. Warehousing at the distributor level is the process of receiving, storing and
dispatching of stock in a safe manner which maintains the quality of the product. Good warehouse
management includes an information system which internally integrates Logistics, Inventory
Management, Sales Orders, Purchase orders and is linked with the supplier.
6. Sales Management. For distributors, sales management is the process of influencing customers to
purchase the product in right quantities so that the consumer will have access when and where the
product is desired. This will also include how the distributors execute at retail level, for example,
display client product, the distribution levels per SKU and per outlet, the use and availability of client
POS material (where applicable) and their understanding of the client portfolio all linked back to the
distributor agreement/contract.
 Enchange RtM Programmes: Distributor Assessment
7. HR & Organisation. The purpose of the Distributor Human Resource function is to develop and
administer programmes and processes which will support the organisation’s people in their
endeavors to reach the company’s objectives. The organisation’s structure, training and reward
systems are aligned to the strategic imperatives of the organisation. This is important even in
distributors and for example, can have a profound impact on Distributor Sales Representative
performance.
8. Finance Planning & Budgeting. We will assess the effectiveness of distributor business planning,
financial planning and budgeting. We will also assess the financial status of the business –
information and data permitting. Key is usually the extent to which distributors have the financial
resources for longer term investment and development of their business to deliver the client RtM
longer term strategic needs.
9. IT / Information. Information refers to all the data required to grow the business and conduct it’s day
to day affairs effectively. We will look at distributor ERP systems and the extent to which it supports
the integration of all data so that efficient and real-time decision-making is possible. Key will be the IT
interface and data sharing between the distributors and the client.
 Enchange RtM Programmes: Distributor Assessment
10. Performance. We will assess the measurement of distributor performance as it is used to drive the
business and to measure its success as a whole. The distributor should have appropriate KPIs in
place that support key strategic, tactical and operational requirements. Management should routinely
use KPIs as a tool to guide proactive decision making and to drive continuous improvement within the
business. Savings should be targeted and driven in a meaningful manner; the service/cost
relationship should be well understood and the most appropriate balance be targeted and routinely
delivered. Performance measures will be compared to client standards and other best practice
targets.
Enchange RtM Programmes: Distributor Assessment
• Performance Bands – we then categorise each distributor into levels of
performance based on the on the Distributor Assessment tool, for example:
• BRONZE (BASIC). Distributors’ control is largely autocratic. Lack of clarity in business decision
making . Few if any KPI's. Limited or no planning. Little or no alignment with Producer plans & market
strategy. Limited ambition. Poor facilities.
• SILVER (INTERMEDIATE). Defined organisation in place; effective in supporting routine business
processes. Key processes aligned & integrated with Producer. Data flow is two-way. Internal &
external KPI's. People development seen as priority. Positive relationship with Producer. Distributor
sales force is stable and R&C is shared but not aligned with Producer.
• GOLD (LEADING EDGE) True partnership Distributor where all partners (particularly sales staff) in
the business participate in collaborative strategic, tactical, and operational planning and execution.
Reliable KPI data drives operational decision making. Facilities good quality & organisation capable of
expansion. People development, job satisfaction , R&C are priorities.
 Enchange RtM Programmes will Deliver Sales Uplift
• The analysis & distributor categorisation provides invaluable data to target
implementation effort
• It will identify high potential distributors where a significant sales uplift is achievable
• It will also identify High performing distributors
where market share protection is critical
• Example:
• In one region only, if all distributors achieved the
national average market share, the increase in
volume would deliver a bottom line impact of €1.3m.

• In this region the priority was Distributor D

(high potential - large territory, low m/s), &
Distributor E

• Distributor A (protect high sales & m/s)

RTM Programme - FMCG
• Our client had a multi-distributor model with a mix of good & poorly performing distributors. The local
market had experienced decline in the previous 2 years with all major international players present.

• A RTM programme established new international

benchmarks for distributor performance & measured all
distributors against the benchmark.
• The results identified specific targeted sales-led
initiatives with distributors & drove a distributor
development programme in time for the new high
season.

Results
• Distribution network optimised with mix of distributor exits,
territory extensions & new distributor contracts.
• Bottom line impact > €11m pa.
• First season – sales & market share increased at expense
of 2 other key players (in declining market)
 Enchange 20 Steps to RtM Excellence
• The Enchange Distributor Assessment piece is Step 3 of our 20
Steps to Route to Market Excellence methodology.
• You can learn more about the overall methodology and how it
works here.