(COMTEX) B: MALAYSIA'S EAC APPLIES SYSTEM TO MONITOR DISTRIBUTION
B: MALAYSIA'S EAC APPLIES SYSTEM TO MONITOR DISTRIBUTION
KUALA LUMPUR, Jun 25, 1999 (Asia Pulse via COMTEX) -- With greater
competition in the fast-moving consumer goods sector, EAC Marketing
Services has put in place a system to enable its business partners to
be on top of things.
Known as EAC ProNet System, this computer-based information network is
an integrated and systematic marketing approach to channel goods to
wholesalers, retailers and consumers in a more efficient manner.
In other words, to make everything related to the business of goods
distribution from manufacturer to consumer relatively hassle-free.
"This not only means lower costs for everyone in the supply chain when
better efficiency is achieved but also greater freshness of the
products," said Edward F.P Liew, its general manager (commercial), in
an interview.
EAC Marketing Services is a division of EAC Holdings (M) Sdn Bhd, a
Danish company with a long history in Malaysia. It markets consumer
goods like beverages, food preparations, confectionery and
pharmaceuticals.
ProNet was developed by EAC Philippines some time back and EAC
Marketing Services decided to implement the system locally in order to
have a sharper competitive edge.
Essentially, the system is about having in place an improved supply
chain management. Which means better control of information on precise
inventory levels and this translates into lower inventory costs.
The system also affords a broader distribution reach for the goods,
increased sales volume, better customer service and most important of
all, improved profitability.
How this is done is having an information system easily accessible by
all ProNet Partners. "What we are concerned is eliminating
double-handling so that costs can be brought down and efficiency
brought up," said Victor Hew, associate director of the division.
He said the financial crisis forced the company to seriously look at
its marketing approaches: it found that it could do better than relying
on the traditional methods.
Under the old-fashioned way, sales representatives of large-scale
distributors often took a guess on how much to supply to wholesalers.
In their attempts to fulfil sales targets, there is often overloading
to wholesalers rather than what the market can absorb. As a result,
wholesalers may end up with stocks they cannot really sell quickly.
"When this happens, problems of cash flow arise," explained Liew
because the wholesalers may just store the goods in their warehouses
because the amount is too much for them or their retailers to handle.
This is something EAC Marketing Services wants to avoid because goods
in a wholesalers warehouse means nothing is sold.
At times, a "black box" situation comes about when the distributing
company cannot keep track of the goods beyond the point of the
wholesaler. This happens when some retailers take advantage of the
strong price differential in other countries and ship goods out for
higher profit.
Liew said such a situation would not be good for owners of the brands
or manufacturers when their products enter territories which they are
not supposed to.
ProNet allows the division's 15 specially-equipped wholesalers, now
known as ProNet Partners, to better manage their goods distribution
business via a computer network. Some of them were previously
wholesalers for EAC Marketing Services, which has about 300 undertaking
distribution in the traditional manner.
Under ProNet, EAC Marketing Services has mapped out 20,000 designated
outlets for its ProNet Partners in Peninsular Malaysia.
"By having a given territory, it ensures that each ProNet Partner can
better serve their retailers and get a strong return on investment,"
said Liew.
As a rule of thumb, ProNet Partners can attain a return on investment
at around 48 percent while some high-achievers had even achieved 75
percent.
"It all depends how you run the business. By getting the ProNet
Partners to concentrate on the 20,000 outlets, it enables them to
achieve 80 percent of the volume," said Hew.
With the key operating elements inherent in the system, the company
also helps in planning warehouse space to cater for a given territory,
transportation facilities and staff requirements in order to maximise
efficiencies.
"We believe in optimising our resources as well as those of our
partners," said Liew, adding that EAC Marketing Services also goes the
extra mile by sitting down with the partners to work out their profit
and loss accounts every quarter.
EAC Marketing Services will soon bring ProNet over to Sabah and Sarawak
and eventually expand to 80,000 outlets all in all. Before that can
happen, it has to meticulously map out the routes and outlets so that
each ProNet Partner can continue to see more than adequate return on
investment.
On the other end of the scale, ProNet also allows manufacturers to
avoid over-production. The information transparency afforded through
ProNet also helps them to track where their goods had been sold best
and how they can capitalise on how best they can position themselves
for future marketing campaigns.
(BERNAMA)
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(C) 1999 Asia Pulse Pte Ltd
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