In our earlier blog on Business Models we discussed about Distribution and its criticality for the success of the supply chain of any product. Given its significance to the supply of most of the product, it is but evident that the companies which act as distributors have a very high say in allowing or not allowing the products to reach the destination. Given this super high influence on the supply chain it some of these distributors could have a very large margin in the products they distribute and hence make it costlier for the user.
Some companies who realized this decided to do away with these costly distributors and make it direct to the user - One such glorious example has been that of DELL computers. Dell computer's supply-chain innovation doing away with the distributor and assembling the various computer components just a few miles before it reaches the consumer has been greatly talked about by the management communities.
Eliminating the distributors in between doesn't just save the extra tax on the pocket of the user but also accrues alternate benefits and in fact the best of all these benefits has been Customer Delight. The process of doing away with the distributors and ensuring that the computer could be assembled just a few miles away from the user enables a greater customization and thereby enhancing the customer delight.
Read in Kannada: http://somanagement.blogspot.com/2011/03/blog-post_5833.html
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