Examining Lafarge’s key distributorship scheme
In economics and business, it is generally believed that the production process becomes completed only when output gets to the final consumer.
It is also indisputable that distributors are the main channels through which the output/products get to the consumer.
Even though this fact is understood in economics, what often worries the business community, especially manufacturers, is the type of distribution scheme to adopt and its eventual efficiency.
Efficiency of a distribution scheme has become necessary not only to ensure that products get to those who need them, but also to guarantee that all players in the chain get value.
In 2013 Lafarge Africa, then Lafarge Wapco, began a programme called ‘key distribution scheme’ to ensure efficiency in the delivery of cement and concretes.
The model adopted by the cement maker, called ‘route to market’, has always been used by the Fast Moving Consumer Goods (FMCGs) and telecoms industries.
This is how the distribution scheme works. Lafarge does a study and then delineates the market.
Rather than register many distributors in an area, the cement maker now appoints one key distributor, who has been operating in a locale, to cover the jurisdiction.
All other distributors operating within the area now come under the key distributor.
One big advantage of this model is that it gives the distributors what is called ‘exclusivity’, which in this case means the right to own an area all alone. This reduces collision among distributors as there will be no clash over who owns jurisdictions and customers.
Assuming you are a key distributor in Ikeja, Lagos, or Abeokuta, Ogun State, you are rest assured that you are the only one to service the market in that area. The key distributor will have field officers who will be trained by Lafarge.
But the key distributor also has a role to play in the value chain. The distributor will be required to make investments in trucks or depots and be able to develop cement dealers in the area.
This scheme is the legacy of Lafarge Wapco, which began in the South-West region, and is set to be implemented by other Lafarge subsidiaries. Lafarge also believes that the distributors have a responsibility to educate cement users on the application of its Supaset, Powermax and other products, including the ready mix.
Lafarge recently rewarded distributors at a customer awards ceremony organised to demonstrate its appreciation for their contributions in 2015.
In his key note address, Mobolaji Balogun, chairman, board of directors, Lafarge Africa plc, said the company has a strong heritage of over 50 years in Nigeria, with the distributors always consistent with meeting expectations of Nigerian professionals and end users.
In her address, Adepeju Adebajo, CEO Cement, said: “We are ensuring a deep understanding of how our products are used and the value they create and engaging with our customers to develop products and solutions tailored to their needs.”
Adebajo commended the distributors for helping to sustain the availability of Lafarge products all over Nigeria, while maintaining the company’s culture of safety.
ODINAKA ANUDU