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Stage Five: Making the grand partnership actually work.

                 ABC pitched 3 different MDs on the partnership plan, selecting one to potentially make this VMI and virtual-
                 selling scenario happen. Lots of questions and concerns were raised by both parties, but the answers were
                 already in existence in other channels that have followed in Wal-Mart’s footsteps. Implementation of this
                 grand plan is now under way (12/06), and scenarios for opening up a totally new type of location that
                 would be designed around receiving 10K items in the middle of every workday night are being planned.


                 Twenty  years  ago  Wal-Mart  first  proved  to  the  world  that  by  buying  straight  truckloads  into  master
                 distribution centers on a VMI basis, they could get the following benefits at its stores.
                        ■ Cut inventory in the stores in half.
                        ■ Improve true fill-rates by over 10%.
                        ■ Double the number of items offered in the same size store.
                        ■ Attract more customers from even further away due to more items with higher fill-rates and of
                        course, every day low prices. And,
                        ■ See average purchases per customer visit climb 78%.

                 Now, with third party VMI implementation firms, web service networks between channel partners, and web
                 order entry systems that can be private labeled for any number of distributor/dealers, these benefits can be
                 achieved between MDs and distributors. And, this new platform offers great new benefits to manufacturers,
                 but that is another story. For more on: this story; fill-rate economics; VMI; virtual selling of MD items through
                 small footprint stores with next, early AM delivery; and “the next story” about manufacturers benefits, hit
                 the “discussions” button at to enter a “collaborative space” adventure with blogs and
                 wiki content provided by distribution channel experts.

                 © Merrifield Consulting Group, Inc.
                 Article 1.15
                 December, 2006
                 D. Bruce Merrifield, Jr.

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