Customer Desk, EMEA
Jul 28, 2018

Distribution, Retail & Echelons

1 comment

Edited: Jul 28, 2018

We are manufacturer of durable goods and operating business since last thirty years. Our firm business model based on selling through few exclusive distributors. They have gained exclusive distribution deals to achieve wide coverage in their geographic. Overtime the distributor tend to be uncooperative, not customer oriented, and selective in their distribution strategies. We are considering improving our business model by reducing the echelons in the distribution channel and opt for modern retailing concepts. What steps should we taken to improve or echelons performances?

Customer Desk, EMEA
Jul 28, 2018Edited: Jul 28, 2018

One of the arguably great challenges of supply chain management (SCM) is the lack of demand visibility. As is often the case, manufacturer are left to use distributor forecast data as the demand input data, which leads to the delayed and distorted picture of the actual end consumer demand. More distorted demand in supply chains with traditional and less modern distributors.


The demand distortion is by a large proportion caused by complex, and longer distribution chain. It is difficult to estimate the exact impact of echelon elimination in distribution channels, but it will definitely increases the performance of supply chain and improves the profitability.


With gaining maturity in supply chain more profitable operations can be established by opting digital supply chain. Modern e-retail concepts with centralized DCs that have appeared in recent years show considerably better performance due to echelons elimination.

New Posts
  • Customer Desk, EMEA
    Jul 28, 2018

    My manufacturing company has 11 final products. All products have four categories based on sizes. The entire system cannot see the real end-demand. Half of the company’s customers are distributors and not real customers. So the company has to depend on history based forecasts. This results in obvious sales-forecast mismatch. In that scenario how to minimize stock-outs and maximize customer service levels with least network inventory?
  • Customer Desk, EMEA
    Jul 28, 2018

    Recently in our organization, the disadvantages of holding inventory have been increasingly recognized, particularly its adverse impact on supply chain and warehouse cost. Is the role of warehouses in future would be eliminated due to leaner inventories?





ISCEA Press Release


Copyright © 2019, International Supply Chain Education Alliance - All Rights Reserved