Distribution channel management includes every aspect of the structure and strategy that results in the efficient delivery of products and services to customers.
Sales, marketing, warehouse and production managers often pursue conflicting tactics that are misaligned with the overall corporate objective. Distribution channel managers consider the unique dynamics of each department involved in the supply chain and design plans to improve communication among departments. An effectively functioning distribution management structure facilitates cooperative efforts among channel participants. This results in lower operational costs while improving the customer service experience.
At the core of their responsibilities, distribution managers scrutinize existing aspects of the supply chain while planning and offering directives for new initiatives. The actual movement of goods from manufacturer to buyer is called logistics, and involves several independent departments. This includes direct channels such as facilities, warehousing, production and the sales force, as well as indirect channels and third party distributors who contribute to supplying products to customers. Distribution managers also facilitate cooperation between downstream partners included in the delivery of products to the end user, as well as upstream partners that include suppliers and vendors.
Coordinating shipments requires organizing delivery routes, properly loading freight and determining the placement of resources that will result in the most efficient delivery of goods. Shipments must be monitored to ensure they reach their destination at the appropriate time. Incoming shipments require scheduling to meet the needs of production and require close monitoring as well.
Purchasing and procurement of supplies and inventory is a critical element of the distribution manager’s responsibilities. This may involve the implementation of enhanced inventory tracking systems, establishment of minimum and maximum purchasing triggers and hiring and organizing a staff of purchasing agents. Managers will also develop detailed reports that offer quantifiable data to assist the sales, marketing and production departments.
Logistics processing involves the careful planning of transportation requirements, warehousing, forecasting, processing orders, controlling inventory, physical facilities management and customer service. The goal is to minimize operational expenses and capital investments while achieving the highest level of customer satisfaction.
Training and Education Requirements
The career path to becoming a distribution channel manager is varied and does not have specific educational requirements. Many managers began their careers in either purchasing or warehousing.
A purchasing agent has continual interaction with numerous vendors on a daily basis. This provides valuable insight into the challenges presented when suppliers fail to meet production schedules and materials are not delivered to customers when promised. Warehouse and inventory experience affords front line interaction with the sales force and the purchasing department, offering a unique insight into the sometimes conflicting dynamics which motivates the actions of these divisions.
Companies with sophisticated logistics requirements usually prefer to hire degreed applicants. Formal education will enhance the opportunity for placement and more rapid advancement. This includes a Bachelor’s degree in Business Administration or an Associate’s or Bachelor’s degree in Logistics, Distribution and Materials. Distribution Management programs cover transportation dynamics, warehouse logistics, core management functions, purchasing matrix theory and using data bases and spreadsheets.
Entry level jobs for those with a degree in Logistics and Distribution include inventory control manager, distribution center manager, transportation manager, planning analyst and customer service manager. Since a distribution channel management career requires a great deal of interpersonal interaction, those entering the profession should have developed good communications skills along with the ability to recognize departmental issues within the context of a broad systems perspective.
A position in distribution channel management can often lead to promotion opportunities. In their regular capacity, distribution managers interact regularly with every department within the company. This exposure provides a unique platform for potential advancement. As a result, those who seek to further their careers often obtain an MBA through continuing education.
Distribution Channel Management Salary and Wages
The salary and wages for a distribution channel management professional are dependent on the geographic location, the size of the company acquiring the manager and the educational level of the applicant. Entry level jobs average $50,000 annually, while the median salary for a distribution manager with five years experience is $83,000 annually. These figures do not include retirement and healthcare benefits. The Occupational Information Network indicates that the number of available distribution management jobs will remain tight through the end of the decade with relatively flat growth. Closely related logistician jobs are expected to grow by 20% during this same period.*
*According to the BLS, http://www.bls.gov/oco/
There are no formal certification requirements for distribution channel managers. The International Purchasing and Supply Chain Management Institute (ISPCMI) offers a certification in International Supply Chain Management. This program tests to verify comprehension of logistics and supply chain management concepts. Many companies recognize the value of ISPCMI certification in the hiring process.
Numerous industry specific associations focus on distribution training and education. The National Association of Wholesaler-Distributors (NAW) encompasses every industry and offers a wide array of programs designed to educate and inform members as to the emerging challenges in supply chain management. NAW also provides lobbying on behalf of the industry as well as insurance programs to help companies reduce and manage those expenses.