We worked together with a leading FMCG company in its operations in Mexico and the Caribbean to design a new operating model with distributors that would allow for the integration of digital platforms. The challenge was for this new model to remain profitable for all parties in the value chain and, at the same time, improve the level of customer service. Through the construction of an economic model, we were able to identify key decisions to be made, and how each of these decisions affected the different parties in order to choose the alternatives that ensured equitable benefits. 

Context

Commercial channels have begun to slowly digitize over the last decade. March 2020 marked a break in the speed of this digitization. In the first stage of the Covid-19 pandemic, all channels adapted as quickly as they could. In a second stage, they began to review their processes to ensure the new way of operating is sustainable.

Our client, an FMCG company that operates in a network with distributors, had the challenge of evolving its way of operating towards a digital model, with the aim of enhancing sales processes by making them scalable and incorporating tools for a more efficient operation. Given the number of actors involved, the biggest challenge was to design a model that would be beneficial for all, and sustainable in the long term. 

Approach

Working in an integrated manner with all the stakeholders that were part of the challenge (company, distributors, suppliers and systems), we were able to find the set of critical decisions to be made that allowed us to compare different types of possible operating models. 

By doing so together, we were able to understand the interests of each party and ensure that everyone’s goals were put on the table. This way -together- we were able to define a new operating model and identify the necessary capacities to optimize the way of working, whether commercial, logistical, administrative, or systems. 

This approach allowed distributors to be integrated into an eHUB for the management of orders received from the online platform with greater benefits for all parties.

Results

After four months of working together with our client and its network of distributors, it was possible to strengthen the digital ecosystem and launch a very convenient model for everyone. Today, the different categories have managed to enhance profitability and increase market penetration.