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INTEGRATED DISTRIBUTION SERVICES GROUP (IDS) REDEFINING THE ASIA DISTRIBUTION LANDSCAPE
.
CONTENT
1
Introduction
2
Literature review
.
3
Major challenges the
company faced
.
Major strategies and approaches employed and implemented
1.Reorganization The strategic priority for the company was to develop the core pieces: logistics, distribution and manufacturing.
.
3.Multi-tiered logistics system In many parts of Asia, the physical infrastructure limitations meant chaos in dealing with multiple logistics providers. The inconsistency of quality amongst these logistics providers led to damaged products along the way, or severe delays in delivery time due to bad planning and coordination.
Three-Year Strategic Plans from 1999 to 2001 In the first three-year strategic plan, the challenges were to manage change and create a new culture. One of the first priorities for IDS was to break down country-based structures and reorganize as a regional company with three business streams and key support functions across Asia. The second priority was for IDS to invest heavily in technology
2.Rise of the modern trade Modern trade channels, such as hypermarkets and category killer retail chains, were becoming increasingly popular amongst Asian consumers. Consumers liked the wide selection, latest products, and everyday low prices.
5.Non-dynamic pricing model Brand owners either demanded a significantly lower service fee or would just not use the distributor at all. The consequences of the outdated, supply-driven supply chain of Asia were manifold and debilitating for retailers, brand owners and distributors. These costs of ‘uncoordination’ stemmed from huge inventories, high costs of services, and process inefficiencies.
.
DAMEN POWEr
oeveroyouthfuloeveroweeping
Major strategies and approaches employed and implemented
Three-Year Strategic Plans from 2002 to 2004 1.Logistics – “ship, store, deliver” In Logistics, IDS provided customized logistics solutions to help bring finished goods from production lines into the hands of consumers in Asia. IDS built extensive in-country distribution and delivery networks across Asia with key distribution centers under its management, and partnered with the most reliable local transporters and service providers in each of the countries.
Key field：The mission of IDS was to provide brand owners and retailers with a customized end-to-end supply chain management solution: from manufacturing all the way through to delivery of finished goods to retail stores.
C.2005-2007: Rewarded in the capital market.
.
Major challenges the company faced
DAMEN POWEr
oeveroyouthfuloeveroweeping
ck of data transparency Essentially, every part of the distribution system was opaque and each party in the system worked in their own silo to maximize individual profits. These dynamics created enormous system inefficiencies and lost sales and profits.
2.Technology Investment In addition to reorganization, senior management at IDS also took another important strategic decision to invest heavily in technology, initially with a bestin-class warehouse management system (WMS) and subsequently a software application for distribution and financial reporting called Oracle E-1.
.
CONTENT
4
5
Major strategies and approaches employed and implemented.
Major success factors
.
DAMEN POWEr
oeveroyouthfuloeveroweeping
Major strategies and approaches employed and implemented
Major challenges the company faced
DAMEN POWEr
oeveroyouthfuloeveroweeping
4.Diverse product and regulatory requirements Asia as a market is enormously complex given its diverse languages, cultures, currencies, government regulations, taxes, tariffs, and level of economic development, to name just a few elements. In addition to individual countries’ differences, significant variations also existed within each country.
B.2002-2004: IDS developed a new business model based on the concept of a menu of services. (1) Logistics – “ship, store, deliver” (2) Distribution (Sales & Marketing) − “promote, sell, bill, collect” (3) Manufacturing – “make, test, package”
.
Major strategies and approaches employed and implemented
2.Distribution (Sales & Marketing) − − “promote, sell, bill, collect In order to develop broad geographic coverage, similar to its logistics business, IDS worked with a number of carefully selected wholesalers and sub-distributors who were part of the IDS distribution network.
DAMEN POWEr
oeveroyouthfuloeveroweeping
Introduction
Background：The complexity of the Asia distribution landscape and the rise of the consumer market in Asia inspired the creation of Integrated Distribution Services Group (IDS).
.
Literature review DAMEN POWEr oeveroyouthfuloeveroweeping
In this case, we will focus on the analysis of the first 9 years of IDS’s business strategy, respectively from 1999 to 2001, 2002 to 2004, and 2005 to 2007. Here is the simple introduction of the strategy: (details below)
A.1999-2001： One of the first priorities for IDS was to break down country-based structures and reorganize as a regional company with three business streams and key support functions across Asia. By far the most important outcome of this change was establishing logistics as a leading core business of the IDS Group. (1) Reorganization (2) Technology Investment
.
CONTENT
1
Introduction
2
Literature review
.
3
Major challenges the
company faced
.
Major strategies and approaches employed and implemented
1.Reorganization The strategic priority for the company was to develop the core pieces: logistics, distribution and manufacturing.
.
3.Multi-tiered logistics system In many parts of Asia, the physical infrastructure limitations meant chaos in dealing with multiple logistics providers. The inconsistency of quality amongst these logistics providers led to damaged products along the way, or severe delays in delivery time due to bad planning and coordination.
Three-Year Strategic Plans from 1999 to 2001 In the first three-year strategic plan, the challenges were to manage change and create a new culture. One of the first priorities for IDS was to break down country-based structures and reorganize as a regional company with three business streams and key support functions across Asia. The second priority was for IDS to invest heavily in technology
2.Rise of the modern trade Modern trade channels, such as hypermarkets and category killer retail chains, were becoming increasingly popular amongst Asian consumers. Consumers liked the wide selection, latest products, and everyday low prices.
5.Non-dynamic pricing model Brand owners either demanded a significantly lower service fee or would just not use the distributor at all. The consequences of the outdated, supply-driven supply chain of Asia were manifold and debilitating for retailers, brand owners and distributors. These costs of ‘uncoordination’ stemmed from huge inventories, high costs of services, and process inefficiencies.
.
DAMEN POWEr
oeveroyouthfuloeveroweeping
Major strategies and approaches employed and implemented
Three-Year Strategic Plans from 2002 to 2004 1.Logistics – “ship, store, deliver” In Logistics, IDS provided customized logistics solutions to help bring finished goods from production lines into the hands of consumers in Asia. IDS built extensive in-country distribution and delivery networks across Asia with key distribution centers under its management, and partnered with the most reliable local transporters and service providers in each of the countries.
Key field：The mission of IDS was to provide brand owners and retailers with a customized end-to-end supply chain management solution: from manufacturing all the way through to delivery of finished goods to retail stores.
C.2005-2007: Rewarded in the capital market.
.
Major challenges the company faced
DAMEN POWEr
oeveroyouthfuloeveroweeping
ck of data transparency Essentially, every part of the distribution system was opaque and each party in the system worked in their own silo to maximize individual profits. These dynamics created enormous system inefficiencies and lost sales and profits.
2.Technology Investment In addition to reorganization, senior management at IDS also took another important strategic decision to invest heavily in technology, initially with a bestin-class warehouse management system (WMS) and subsequently a software application for distribution and financial reporting called Oracle E-1.
.
CONTENT
4
5
Major strategies and approaches employed and implemented.
Major success factors
.
DAMEN POWEr
oeveroyouthfuloeveroweeping
Major strategies and approaches employed and implemented
Major challenges the company faced
DAMEN POWEr
oeveroyouthfuloeveroweeping
4.Diverse product and regulatory requirements Asia as a market is enormously complex given its diverse languages, cultures, currencies, government regulations, taxes, tariffs, and level of economic development, to name just a few elements. In addition to individual countries’ differences, significant variations also existed within each country.
B.2002-2004: IDS developed a new business model based on the concept of a menu of services. (1) Logistics – “ship, store, deliver” (2) Distribution (Sales & Marketing) − “promote, sell, bill, collect” (3) Manufacturing – “make, test, package”
.
Major strategies and approaches employed and implemented
2.Distribution (Sales & Marketing) − − “promote, sell, bill, collect In order to develop broad geographic coverage, similar to its logistics business, IDS worked with a number of carefully selected wholesalers and sub-distributors who were part of the IDS distribution network.
DAMEN POWEr
oeveroyouthfuloeveroweeping
Introduction
Background：The complexity of the Asia distribution landscape and the rise of the consumer market in Asia inspired the creation of Integrated Distribution Services Group (IDS).
.
Literature review DAMEN POWEr oeveroyouthfuloeveroweeping
In this case, we will focus on the analysis of the first 9 years of IDS’s business strategy, respectively from 1999 to 2001, 2002 to 2004, and 2005 to 2007. Here is the simple introduction of the strategy: (details below)
A.1999-2001： One of the first priorities for IDS was to break down country-based structures and reorganize as a regional company with three business streams and key support functions across Asia. By far the most important outcome of this change was establishing logistics as a leading core business of the IDS Group. (1) Reorganization (2) Technology Investment