Sales Organization Structure for Distribution Industry

[Former Member]

Hi Experts,

Need some inputs wrt Distribution Industry

1. In Distributor set up. how should we set up the different manufactures which supply the products for distribution.

2. How should we link the manufactures to Products they supply.

3. How should we link the sales representatives to specific manufactures.

4. Would it be a wise decision to incorporate manufactures as a division in the organization structure. Or should we map the manufactures as vendors and maintain the Vendor Info records.

It would be really great if any one can share their experiences wrt to sales organization structure in the Distribution industry especially Pharma Distribution.

Regards,

KK

[Former Member]

Thank you team for a quick response.

my project client is for a pharma distributor. Who gets the goods from the manufacturer on an agreed selling price to the cusomer and an agreed margin for distribution. Manufacturer invoice the distributor(my client) which he pays after a agreed period.

Distributor sells the products to the customer at the selling price decided by the manufacturer. And any deviations on the selling price told by the manufactures will be notified to the manufactures and will be charged back to distributor.

This is the typical scenario.

We have different opinions coming for sales organization structure design.

Approach1:

1. Regional orgnizational units will be sales organizations.

2. Domestic sales and Exports as distribution channels.

3. Manufactures will be created as divisions

4. Manufactures will also be created as vendors

Pros:

Month end cut off activities can be manufacturers wise.

Backorder processing can be manufactures wise.

Billing due list and billing can be manufacturer wise.

Approach 2:

1. Regional orgnizational units will be sales organizations.

2. Domestic sales and Exports as distribution channels.

3. Pharma and healthcare as divisions

4. Manufactures as Vendors

5. Products will be created and will be tagged to manufactures in vendor info records.

• but customers(Drug stores) can purchase products from distributor irrespective of manufactures if they have license to sell.

Can you please suggest which one would be the correct approach with respect to industry standards and best practice.

regards,

KK

Edited by: Karunakar Kutani on Dec 2, 2010 9:16 AM

[Former Member]

hi

this is to inform you that:

first of all i have a question to you. you are manufacturer of products that means are you paying excise duty for manufacturing products or only distributor of products.

1. In Distributor set up. how should we set up the different manufactures which supply the products for distribution.

1.a. You can consider if you are manufacturing and distrubuting products

If you are a manufacturer - tae material FERT if you are a distributor - tae HAWA asa material type.

2. How should we link the manufactures to Products they supply.

2.a. the organisation struccture lins each other & MMR also helps to lin

3. How should we link the sales representatives to specific manufactures.

3.a. it may be specific to divisions tae one sales group for each specific divisions.

4. Would it be a wise decision to incorporate manufactures as a division in the organization structure. Or should we map the manufactures as vendors and maintain the Vendor Info records.

4.a. manufacturer as a vendor and different products a divisions.

It would be really great if any one can share their experiences wrt to sales organization structure in the Distribution industry especially Pharma Distribution.

sales organizations : 2 - domestic & exports

distribution channels : 3 - retail - super stocists - C & F agents.

retail/wholesales/distributors/superdistributors/super distributors - all you can consider all into one distribution channel or tae as different distribution channels you have to analyse from reports perspective to have all these.

divisions - products = divisions lie cardiac - orthopedic to name a few.

sales office : you can have many as per your requriment.

sales group : basing on divisions = sales groups

company code = how many balance sheets you are submitting now to AAI that many company codes you have to have.

batch management with FIFO or LIFO strategy has to be mandatory in implementation.

balajia

[Former Member]

Hi,

You have to consider the financial aspects in your business. If the manufacturers supply the goods to you along with Invoices, then they are certainly vendors.

If the manufacturer is a vendor to you, then you will have info record. So, the link between manufacturer and the products happen.

You can assign a sales representative in vendor master in partner function.

Division is assigned for a group of materials; not for a vendor (manufacturer).

Hope the above information will be useful to you.

Regards,

K Bharathi