Problem: A premium pet food manufacturer needed to create a competitive barrier against its competition through differentiation. The strategic decision was to change and leverage its distribution methodology to add value for the benefit of their customers. The vision was to have the delivery person manage the inventory at retail store shelf; build and maintain displays in the retail space; and to implement handheld computers to invoice, redeem coupons, handle returns and process credits at point of delivery. The expected outcome was a business process design that could not easily be duplicated by the competition and would drive ongoing revenue increases through better execution at retail. Most important, it was felt that the value added services would drive customer loyalty and product endorsement for the future.
Solution: A complete process review from point of product packaging to customer delivery was completed. Process flows, structure options, staffing needs, information/transaction processes, reward systems, capital requirements, and a multitude of other change parameters were reviewed and identified. An ideal design was finalized and a business case developed to gain executive sponsorship and approval for implementation. This Master Plan encompassed all of the components of change initiative that would be necessary to start up and create an entirely new business process for the company.
Results: The new business process posted year-on-year sales increases of 15% or better in transitioned markets. Shelf space increased 20% on average and retail display execution for promotions was posting 85% success rate vs. historical of 60%. Most impressive was the findings of an independent market research survey. The new value added process identified the new service and delivery methods as a 'clear competitive advantage' vs. the competition on all measured attributes.
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