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Distribution channel of a dairy food product


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if you are going to launch a new dairy product or perishable product in the market. here is the distribution channel for that.

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Distribution channel of a dairy food product

  2. 2. OBJECTIVE<br /><ul><li>To design a distribution channel of a perishable product entering the market for the first time having shelf life of 2months.
  3. 3. Minimizing the time from mass production to purchase by customer.
  4. 4. Optimize the distribution cost.</li></li></ul><li>Tirumala milk Pvt. Ltd <br /><ul><li> Shelf life of 1week.
  5. 5. Manufacturer – Distributor – Retailer
  6. 6. 80 Distributors in Bangalore.
  7. 7. Each Distributor covers 300 shops everyday.
  8. 8. Starts distributing milk at 3am.
  9. 9. Distributor Sell around 4000 liters/day.</li></li></ul><li>MOSILLA CAKES<br /><ul><li> Company provides wide variety of flavored layered cakes and pastries.
  10. 10. Perishable products have shelf life of 2month.
  11. 11. The physical distribution is critical in distribution channel</li></li></ul><li>Distribution Model<br />Manufacture/ Production<br />Depot<br />Depot<br />Depot<br />Depot<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Distributor<br />Retailer<br />Retailer<br />Retailer<br />Retailer<br />
  12. 12. The production centre/manufacturing plant is in Peenya Industrial Area, Bangalore.<br />From the production centre goods are sent to Depots of the company, which are located in four zones of Bangalore.<br />Each depot supplies goods to its respective distributors(10 each).<br />Each Distributor’s salesman visit retailers to collects the order(order booking).<br />Distribution Channel<br />
  13. 13. Each distributor has 2 salesman who visit 20 shops per day. 20 x2 = 40<br />6 working days/week. 40 x 6= 240<br />10 distributor per depot. 240 x 10 = 2400<br />Four depot. 2400 x 4 = 9600<br />Therefore total 9600 shops are covered every week.<br />Current order is collected which will be delivered next day and collection for previous week is done.<br />Sales Calls<br />
  14. 14. 9 Big Bazaar Outlet.<br />21 Spencer stores.<br />These large retailers are supplied goods directly from the depot in their corresponding areas.<br />This is done to avoid the margin being shared with the distributor. <br />Large Retailers<br />
  15. 15. MARGINS<br />Price of 100gm cake – Rs15/- per piece<br />Retailer would purchase the same from distributor at Rs13.50/- per piece. – Margin of Rs 1.50/- per piece.<br />Distributor at Rs12.75/- per piece. – Margin of 75p per piece.<br />
  16. 16. CHALLENGES<br />Time consuming activities (From manufacturer to consumer).<br />High safety concern needed as these are Perishable item(cakes, pastry foods).<br />High cost for delivery to distributor, retailer and depots.<br />Inventory management.<br />
  17. 17. WASTAGE DUE TO SHELF LIFE EXPIRY<br />To supply a bit lower than expected demand.<br />They should mention to their distributor that, in case of wastage they will take back the products.<br />
  18. 18. REPLENISHMENT MODEL<br />Every week there is a call from our sales person and hence order booking and collection is done as well. so these all activities serves as the requirements of the replenishment model.<br />Deciding the safety stock limit and lead time so that there is no shortage of the product. <br />By-pass all distribution channels and directly market the product and deliver it to the consumer itself it will reduced the time as well as the energy.<br />
  19. 19. INVENTORY MANAGEMENT<br />Warehouses (inventory) is not managed by the company properly, it could prove to be very costly for the company.<br />Warehousing and the amount of inventory in the warehouses is a tricky subject<br />Warehouse: Entering the shelf life of the product in the database from where a update of the product will help them in clearing the stock without much wastage of the product <br />Distributor’s inventory: Here there is not much inventory required as the product is not very high priced and the it is kept according to the needs of the customer.<br />
  20. 20. APPLICATION OF IT<br />Keeping track of order made by each retailer through systems installed at every distribution points so as to manage the availability of the goods.<br />Software must be installed in the systems which would send the no. of order to the manufacturing unit at the same time when it is ordered by the retailer<br />Which will help in proper flow of goods without wastage and minimized cost and time.<br />Synchronized working and best possible utilization of the available resources<br />
  21. 21. THANK YOU<br />