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We advocate continually working with your wholesalers to optimize costs in the following areas:
1. Using full pallet or layer quantities. One of the benefits of redistribution is eliminating case picking
and pallet-building for the manufacturer, so that product can flow more efficiently from the plants
and warehouses. If the wholesaler orders in layers, or even less-than-layer quantities, this savings
goes “out the window.”
2. Advanced forecasting and production planning. Because they aggregate demand from many small
distributors, wholesalers have the potential to smooth your operations all the way back to production
planning. Your Supply Chain people should establish relationships with their counterparts at the
wholesaler to take advantage of this potential.
3. Use of all available technology. The larger wholesalers have excellent capabilities in the areas
of ordering, pricing communication, advanced shipment notices, and electronic funds transfer.
Manufacturers need to take full advantage of these opportunities to reduce cost and improve
accuracy.
4. Overall product line rationalization. The launch or re-staging of a wholesaler program should be a
catalyst for reviewing the product line and eliminating underperforming products. This will not only
simplify and streamline the physical flow of products, but will also improve focus on your winning
products by the wholesaler sales force and its distributor customers.
5. Cleanup and maintenance of data. Manufacturers must share a wealth of data with their
wholesalers, especially item master, customer master, and pricing information. When this data
is inaccurate, outdated, or unclear, it can bring the business to a halt, and then add cost for all
parties as issues are resolved. Manufacturers should work to update old and unclear data, and
seek input from the wholesaler to identify problem areas.

Effectively pursuing these opportunities requires the establishment of relationships well beyond the
salesman/buyer level to include finance, logistics, marketing, customer service, and supply chain
departments. When suppliers know and trust their counterparts at the wholesaler, a lot of joint cost-
reduction opportunities can be realized.

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