How the right distribution strategy affects logistics performance

How the right distribution strategy affects logistics performance

How a business distributes its products to end customers varies, based on sector, model and the ultimate goal. For some organisations, e-commerce retailers, for instance, selling directly to customers is the best model. For other organisations, such as wholesalers, selling products through an intermediary may be the best route to customers.

However, no matter how your products reach customers, adopting the right formal distribution strategy for your business can be the difference between merely servicing your customers and providing an experience that’ll keep them returning time after time. Let’s look at a few key benefits of a tailored distribution strategy.

Improved cycle times

Organisations with a clear distribution strategy are simply able to get orders to customers faster. According to benchmarking data from the American Productivity & Quality Center (APQC), organisations with a clear distribution strategy take two days on average to process customer orders, whereas those with some implementation of strategy take ten days on average and those with no strategy up to two weeks.

This is largely down to the shorter pick-to-ship cycle times of organisations with fully implemented distribution strategies. Simply put, if employees or distributors are following a carefully considered process for every order, they’re able to source the product and get it out the door much faster and more efficiently than without a strategy in place.

The benefits for customer satisfaction are obvious — your customers receive their orders quickly, with minimum fuss — but it also has organisational benefits for your business. With the ability to process orders quickly and efficiently, you’ll be able to increase capacity cost-effectively.

A better customer experience

We’ve already touched on how the right distribution strategy can help you get products to customers faster, but the benefits go far beyond speed.

The process of developing a distribution strategy enables organisations to assess the best route to satisfying customer needs, as well as which customers to target and where. The result is a truly customer-centric service that gives buyers exactly what they want, delivered using methods that fit with their preferences. 

Reduced costs

Research from APQC reveals that organisations with a well-defined distribution strategy also spend less on shipping than their counterparts. Part of the creation of a distribution strategy is examining your processes for areas of inefficiency and, more often than not, this highlights areas of your business where money could be saved.

For example, it could be that outsourcing stock control or warehousing is more cost-efficient than your current model. Or perhaps adopting a digitised supply chain could yield savings. Where the savings are found will largely depend upon your business and its model, but the analysis undertaken in developing a strategy is the first step to finding them.  

Competitive advantage

When combined in a distribution strategy, the elements we’ve discussed give your business a clear advantage over competitors. Whether it’s through improved pick-to-ship cycle times, reduced costs or tailored customer experience, the right distribution strategy can give you a real edge against businesses who fail to adapt their strategy to customer needs.

Sprint Logistics are specialists in developing distribution strategy. From our pick-and-pack warehouse to our e-commerce delivery and courier services, we cover every element of the distribution process, making us the perfect partner to help you develop a strategy that works for your business.

Contact us today to discuss your logistics requirements and we will provide a bespoke service.

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