omore distribution channel management

8/13/2019 OMORE Distribution Channel Management

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PRESENTED BY:

Ayaz Rawjani

Bilal Ahmed

Khurram Abbas

Murtaza Mushtaq



Engro Corporation Ltd. Engro Foods Engro Foods – Brand Portfolio

Omore Distribution Management of Omore Services to Retailers – Northern Region Services to Retailers – Karachi Distributors in Karachi Direct/Indirect Model for Omore Distribution Policies Distribution Management Challenges



o It operates in various sectors

• Fertilizer

• Food

• Energy

• Chemical

• Business Automation Solutions

o Engro Foods is a wholly-owned subsidiary of Engro Corporation ltd.

o Engro Foods Limited was incorporated in May 2004

o Dairy was used as a stepping stone to enter into the food business



• Olpers milk• Olpers cream• Tarang

• OMORE• Olfrute• Olwell hi-cal lo-fat (HCFL) milk• Olpers Owsum



• Launched in March 2009

• Launched primarily in Lahore with a mission

“To become a major player within the industry” • Nationwide campaign in 2009

• April 2011, Omore launched in Karachi



Hire third-party logistics company to establishcold storage point in Lahore and Islamabad

Cold storage points are used to stock ice creamfrom the factory

These points are also used for reloading smallervehicles for distribution to retail outlets

Only 5 distributors in the Northern Region(Multan to Peshawar)



Only two distributors in Karachi (PTN andAgility)

Industry norm of providing the retailers withcomplementary freezers, but did not give into other demands of the retailers

Nationwide trikes generation about 18percent of business



Ice cream production facility in Sahiwal, andthen shipped to Karachi

Sahiwal – larger throughput, higher buyingpower of consumers in Punjab and outletsdrop size is bigger



Freezers and maintenance to retailers

Engro Foods has deployed 20,000 freezers

across the nation for Omore in just 2.5 years

Refrigerators reach stores before the ice cream

Commission for carrying stocks

Provided the retailers with outlet related toolsi.e. signage, gondolas and window graphics etc



Beside distributors, Omore has establishedSales Point Orders (SPD)

Lahore has 30 SPD’s – independent ofdistributors



Different model for Karachi

Vehicles, loaders and warehouse are owned by thirdparty logistics (3PL) company

Sales team and order takers are distributor’semployees

Beside distributors, Omore has Sales Point Depot(SPD)

Freezers are provided to SPD Owners along with aroute



Only 2 distributor in Karachi (i.e. PTN and

Agility)

Agility is a logistic company but acted as adistribution company for Omore

Security situation in Karachi



Engro Foods is reaching out to moredistributors as Omore isn’t distributed

effectively in Karachi.

Looking for forward integration in upcomingyears.



Direct model – vehicles and drivers are of third party, but theorder booker and delivery person are employees of EngroFoods

Order booker takes order from retail outlets and feeds the datainto the SC system

Load sheet generation according to the routes and vehicles areloaded by third party

Physical checking to ensure proper and correct loading – Engrosalesperson

Sales person is also responsible for the collection of moneyfrom retail stores



Direct model is more complicated in terms of

cash handling, human resource management

hassles, vehicle repair or maintenance hassles Cost-efficient and total control over the

distribution

High service standards

High information flow from customers/retailers



Quicker response time

Effectiveness in handling POS materials

Established sales region

90 percent of distribution is through indirectmodel

Islamabad and Rawalpindi are covered by directmodel



Exclusive distribution system

Party that handles Walls distribution cannotbecome part of Omore’s distribution network

New distributors

Sales are already established in regions – reduced risk for distributors



Ability to find right distributors with moneyfor investment, and

Skills and core competencies for themanagement of cold chain

Distributors are liable to invest in cold storesand vehicles, and Engro invests heavily infreezers



Remarkable investment (i.e. 10 percent YoYincrease) – still struggling to fix distribution

network.

The bottom-line of company is in negativezone due to heavy distribution expenses i.e.Rs. 2.6 billion from January to September.

omore distribution channel management

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