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How The Dynamics Of Product Distribution Influence Supply Chains

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By Author: samidhaharinna
Total Articles: 62
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Retail is an intensely competitive space with very little scope for errors. The intense nature of the business comes from various challenges such as inventory, perishables, stocking, expiry periods, overall supply levels for high-selling items and more. It is a dynamic and ever-evolving business that depends largely on product distribution and its own internal dynamics. As per several industry experts, the dynamics of distribution are what ultimately end up influencing the entire supply chain.
Take the example of a leading supermarket chain or grocery chain which has seen a demonstrated and marked preference of customers for specific global FMCG products from top brands.

Naturally, these brands will have to rely on a local distribution service here in the UAE (United Arab Emirates) which is one of the biggest global hubs for the business. To get it into the supermarkets, stores, retail aisles and other distribution channels, they will have to ensure that the distribution partner keeps up his/her end of the bargain. How is this done? The distributor will be housing the inventory in ample and well equipped warehousing/storage facilities. Inventory will be earmarked and categorized through the warehouse management system (WMS) which requires advanced technologies and software to be installed. Thereafter, based on the need and allotment for inventory, distribution partners will be allocating units for delivery and distribution throughout multiple channels.

Then comes the question of logistics, i.e. receipt of items from the global FMCG brand and its operatives and transportation to the warehouse and again to retail outlets. These are things taken care of by the distribution partner in the UAE. Transportation infrastructure is required to be absolutely impeccable along with smooth organization and management on the ground. Additionally, things like customs, imports, clearances, paperwork and other aspects have to be impeccably handled too. The entire process is handled by the distribution partner, paving the way for smooth supply at retail stores. Hence, the entire supply chain dynamics are centered on how the FMCG product in question is distributed. The UAE is already showing high preference for top FMCG products from leading global brands. Al Maya Group is a major name in this sector and has carved a niche for itself over the years.

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