TENDENCIES OF DEVELOPING THE SUPPLY CHAINS IN

MULTI-CHANNEL DISTRIBUTION
Branko Davidovi1*, Miroslav Boovi1 and Aleksandar Jovanovi1
1
High Technical School of Professional Studies, Kragujevac, Serbia
Contact person: iwtbg@beotel.net

Abstract: Managing the supply chains (SCM) is the subject of various analyses of the
operational managers concerning the strategies of managing and integrating of different
activities in the realization of processes and operations for achieving an operationally efficient
and economical delivery. The multi distributive channels are becoming more and more
complex and they demand the most rational management strategy to be chosen. Different
strategic approaches show that most of the organizations perform the delivery by two or more
channels at the same time. Goods are sent to many buyers by more channels, especially in the
case of e-trading, in the organization of 3PL or as a still classical process. A few organizations
are on the edge and they want to develop a way for acquiring new technologies while some
are bound to wait to see the market positions, only once accepting a new solution which
proved to be successful. Most organizations delay when accepting new solutions because,
when using the old solutions, they gain an advantage over their competition which is delayed
in development. Most distributors (82%) offer retail as the primary way of giving service.
Besides, more than a half of them (56%) sell their products via the website, almost half (47%)
covers the wholesale market, while a smaller part (25%) offers the traditional direct approach
to the users by a catalogue or by mail. It isnt quite clear which strategy is the best for users
and distributors because each strategy has both its advantages and disadvantages.
1. THE MULTICHANNEL DISTRIBUTION
The task of servicing more users can lead to many problems in its realization. The problems
mainly generate from the process flow and from the inefficiency in managing the supplies.
Defining and establishing the distribution plan using the consultants or providers for the
implementation of the 'best practice' are the most common tactics of the traders ,which the
distributors also use for solving and preventing of possible distribution problems.There are
different requests in managing each channel on delivery sights (retail, wholesale, directly to
the user via e-trade or directly to the user via catalogue or by post). Managing the complex
deliveries in distribution processes with more channels show that most distributors (40%)
processes the flows through two channels, 22% through three channels 9% through four
channels and 29% through one channel. Most traders deal with three or more sales objects
where the main requests are the increasing of the flow, maintaining the users, i.e. buyers,
happy, lower distribution costs etc. It is considered that sales objects (shops) generate most of
the income (50%), and that 'on line' trading represents the main potential for increasing the
income (20%).
If we analyse the service channels by the way of selling, it is supposed that the web site sale
would show the greatest increase (52%), by distributors 11%, social media 9%, catalogues
4%, call centers 4% etc. According to the way of delivering, the greatest per cent (54%) is
expected in the delivery from the distribution center ordered on line, from shopping at the
shops (46%), ordering at the shop and delivering at home address (39%), picking up at the
shop (19%) etc. The number of distributive channels in retail is constantly growing, as well as
the level of orders via internet, which demands additional transportively-commercial services,

faster e-trading to the final user, better assesment of external suppliers, lower business costs
etc. In the wholesale, the requests are similar, except for the expectation of the increase of
orders via the website. The experience shows that selling by e-trading makes more than 50%.
Such a trend will demand alternative models of distribution in more than 61% organizations,
about 16% of them will make some small changes, while about 23% won't probably change
anything, and all of this will be done for incresing the competitiveness. Approximately 77%
of organizations are able to estimate the alternatives for the next two years and apply new
methods and solutions for distribution in retail, wholesale, catalogues and web ordering. The
investments will mostly be in technology, objects and applying certain softwares for
warehouse control (WCS) and warehouse managing (WMS).
2. THE TENDENCIES OF SCM DEVELOPMENT
While considering the tendencies which will influence the future generations of supply chains,
we should consider some macroeconomic factors of which the most important in the market is
the development of BRIC (Brasil, Russia, India and China). The increase of BDP in those
countries surpasses a lot the increase in the countries with much developed economies. Many
users in those countries already make 40% of the world's population. It is expected that, by
2050, their joined economies will surpass the economies of the world's richest countries,
including the USA and the EU. According to the U.S. Bureau of Labor Statistics, the increase
of logistic activities of 26% is expected.
According to [5] ten directions for setting a base of the future economy of different
organisations are listed, and they are:
1. The increase of the industrial demand for the new supply chains. Organisations which
successfully coordinate the pre and post sales service activities (including the knowledge
about the products, sales objects adjusted to the buyers, maintenance and guarantees,
considering the customers' needs etc.) will have an advantage over the competition which is
focused on product only.
2. Constantly decrease the extreme influences in supply chains. As first, the issue is the
sustainable development and the need to reduce the emission of hazardous gases. This, among
other things, implies measuring and registration of potential consequences which occur on the
product label itself in the supply chain. The buyer will start demanding to have an insight into
the negative influences before consuming food and drinks.
3. To shape the SCM so they would be adjusted to a wide range of population, of lower
responsibilities, which makes the majority of a society in the means of their fullfillment,
primarily from the aspect of acceptable prices.
4. To apply the information technologies knowledge in complex analysies, planning,
supplying, delivering services etc. A multilingual support will be needed for communicating
with local complex systems from different geographic areas which should be served, which
will lead to the need of information technologies globalization in the supply chain.
5. To carry out the recquired certification of different subjects in all SCM activities from
transporters, forwarders (movers), financial experts to professional managers of supply
chains, from the aspect of normalizing the delivery, the offered content and certificate. It also
implies constant professional education and knowledge testing (measured by a ceertain
number of hours in a year).

6. To increase the speed of reaction in the market which will condition the number of supply
chains and their nature. The time of offering a product and/or services by a catalogue is in the
past and not to think opposite is 'a recipe for disaster'.
7. To know in detail the micro segmentation of the market (individual or groups of buyers)
and their supply chains so they could realize their goals in global business strategy
successfully. In other words, you should accept B2C (Business to Consumer) way of thinking
even though your activities are more oriented to B2B (Business to Business).
8. Cloud techonology which supports SCM will be at hand (within reach). SaS (software as
service) is becoming more and more important. By the end of 2020, most of the techologies of
supply chains, if not all of them, will use certain models with very low expenses in different
applications (Office&Messaging software, DBMS software, Management software, CRM,
MIS, ERP, HRM and others).
9. Management will use social media more in the process of feedback for recognizing the
quality of their products and services in which way they would close the circle from the idea
to the realization and proactively provide the answers for the results achieved.
10. Artificial intelligence must be included in the basic activities of supply chains. People
learn when working, and processes are getting better when all the obstacles are removed and
undisturbed functioning enabled. Yet somehow, whenever we build a supply chain, everything
starts all over again. Technologists go through identical steps in their calculations, supply
workers repeat, in average, 35% to 40% activities they already did in their previous jobs. The
same can be applied to logistic officers and others engaged in SCM. It means that there isn't
one unique approach algorithm which keeps the knowledge and experience of the previous
jobs, which can be automatized by the artificial intelligence of a supply chain.
From the aspect of production, the most important tendencies are 1, 6 and 7, then 8 and 9.
From the aspect of business results the most important tendencies are 1, 4, 6 and 10 at which
2 and 3 have the least or average importance since the 'wait and see' principle can be noticed.
From the aspect of performance, 2, 6 and 8 have the priority, while from the aspect of
performance complexity the 1, 6 and 10 tendencies are most complex for performing in
practice.
REFERENCES
[1] Bloech J. Ihde G. Vahlens Groes Logistik Lexikon, 1997 Verlag C.H. Beck Verlag Vahlen.
[2] Kuhn, B. Hellingrath, Supply Chain Management, 2002, Springer Verlag.
[3] Pfohl H. C. Logistiksysteme (Vierte Auflage), 1990 Springer Verlag.
[4] Robinson C.H. Going Global. Building a Sustainable Logistics. Model in the Age of
Globalization. C.H. Robinson Worldwide, Inc. Eden Prairie, Minnesota. 2013.
[5] Sengupta S. 10 Trend Supply Chain Management Review, July/August 2013.
[6] Wiendahl H. P, Erfolgsfaktor Logistikqualitt, Springer Verlag. 2002.
[7] asopisi u 2012-13: Supply Chain Management Review, Modern Materials Handling, Logistics,
Material Handling.
[8] Linkovi:
http://www.megacitiesproject.org
http://www.chrobinson.com