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Who is controlling the stocks level at distributors should be a part related to the supply chain team or the sales team?!
Distributor stock is considered as sales in P&L! Not as a supply chain stock.
Definitely Supply chain responsibility but keep in mind its always a team work that works for companies. If we tag one department alone for improving the sales and distribution then it is no going to make it through. Sales team must play their part as well.
Hello Mohamed,
This is the responsibility of the supply chain team who will plan in stock levels according to trends (including sales). If a minimum and maximum level are set, and the minimum level has been reached then this is a signal to order more. The supply chain need to be aware of the speed of the distributor sales and must communicate effectively with the supply chain.
In distribution compaies the stock level is supply chain's responsibilty which should be based on sales and marketing plans and othe factors.
It would depend on the individual firm and supply chain techniques used. In case of examples like consignment inventory or vendor managed inventory, the distributor stocks are still within the firm's inventory even if held at the distributors premises.
I have worked with firms in the Medical business who track the inventory until delivered to the end customer and also help the distributor to move their stocks. This provides clear visibility and also avoids dumping practice blocking up the supply chain.
But most firms consider distributor stocks as sale and do not bother until inventory piles up at the distributors end leading to slack in downstream demand. This has a danger of leading to a disconnect with market conditions and slowing down MIS information flow.
Everywhere in the World, Logic is same.
Stocks Billed to Distributor its teated as a Primary sale, When distributor is selling to retailer its called secondary sales.
From Warehouse to Distributor the responsibility is supply chain, after delivered and get the sign in POD , resposibility is distributor its not a Supply chain . this is the FMCG industry rule everywhere in the world.
Without invoicing can we move goods from the warehouse? then after invoicing it should be a sale, if you do stock transfer to distributor it will not be sale.
Sales cycle get completed only when we are paid off for product services offered. Simply product distributed is not treat as sales but it is part of supply chain accountability to monitor the movement of stock. For example short shlef life or slowmoving stock reshuffling from low demand area to high demand area is a supply chain function. Effective supply chain is committed to mitigate impact to business due to redundancies and write off. So take care of distributor's stock too :)
Distributor stock is defenatly a sale. once the stock is out of the company is not a supply chain.
Dear Mohamed
Sales & Supply chain are defined in different levels. the distribution stock is a part of supply chain.
Unfortunately its a sale. there can be buy back contract between company and distributor or return policies. but on papers its a sale.
it becomes burden for distributor to either sell or dispose stock such as spare parts of discarded products.Hence there is need of CPFR... collaborative planning, forecasting and replenishment in order to avoid inconvenience for all the stake holders.
