Channel Integration
Channel Integration- What is it ?
In the world of Sales and Distribution Management, it is imperative to have upstream partners like logistics , distributor , retailers , transporter and whole sellers to effectively sell the products manufactured by a company . Channel integration is a collaborative effort to bring together all these partners into the system and integrate the efforts so that all the partners are benefited out of it.
By using the concepts of Channel Integration, rather than the traditional methods of distribution the organisations save on transaction costs and have better control over the partners. This concept also closely relates to the Supply Chain Management and better management of downstream partners.
Importance of Channel Integration
As has been suggested in the previous paragraphs , the concept of Channel Integration helps us reduce the transaction cost and enjoy better control over the channel members . SCM concepts of Collaborative Planning ,Replenishment and Forecasting (CPFR) apply to the Channel integration. Experts suggest that there is a cost saving to the tune of 10-15% by using channel integration.
Channel integration provides sustainable competitive advantage by using the following concepts:
• It bridges gaps between the consumption and production . The gaps that can be bridged include but are not limited to quantity gap , space gap time gap and variety gaps
• Since the manufacturer can have real time information of the consumption on distributor and retailer front , it helps him plan the inventory and production levels , thus preventing the stock pile at the retailer , distributor or the manufacturer level.
• Channel integration is useful in the international and the exports markets as well
• Channel Integration helps build a strong relationship between the channel members and helps each exploit the advantage the other holds in the market . This concept is built along the lines
In the world of Sales and Distribution Management, it is imperative to have upstream partners like logistics , distributor , retailers , transporter and whole sellers to effectively sell the products manufactured by a company . Channel integration is a collaborative effort to bring together all these partners into the system and integrate the efforts so that all the partners are benefited out of it.
By using the concepts of Channel Integration, rather than the traditional methods of distribution the organisations save on transaction costs and have better control over the partners. This concept also closely relates to the Supply Chain Management and better management of downstream partners.
Importance of Channel Integration
As has been suggested in the previous paragraphs , the concept of Channel Integration helps us reduce the transaction cost and enjoy better control over the channel members . SCM concepts of Collaborative Planning ,Replenishment and Forecasting (CPFR) apply to the Channel integration. Experts suggest that there is a cost saving to the tune of 10-15% by using channel integration.
Channel integration provides sustainable competitive advantage by using the following concepts:
• It bridges gaps between the consumption and production . The gaps that can be bridged include but are not limited to quantity gap , space gap time gap and variety gaps
• Since the manufacturer can have real time information of the consumption on distributor and retailer front , it helps him plan the inventory and production levels , thus preventing the stock pile at the retailer , distributor or the manufacturer level.
• Channel integration is useful in the international and the exports markets as well
• Channel Integration helps build a strong relationship between the channel members and helps each exploit the advantage the other holds in the market . This concept is built along the lines