Logistics is always a fundamental element to ensure the success of an internationalization project

The solutions – as we shall see by reasoning on three examples of product categories – can vary a lot. Let’s consider three cases in three very different areas of the spectrum of the products that we may want to export.

Example 1: industrial machinery

Critical: The after-sales service is always very important and is a critical success factor. Customer expectations vary greatly depending on the country. Typically customers in countries with local equipment manufacturers have more stringent requirements. Here is a list of items to be aware of and on which it is important to understand the market needs:

  • Parts Availability: service level and delivery times;
  • Telephone response time (in local language);
  • Availability of technicians locally and their response times;
  • Training of customer’s personnel at delivery;
  • Commissioning.

Not critical: The logistics for delivery of machinery: it will be necessary to find a suitable carrier and organize the team for the commissioning, often utilizing the very same staff who also carry out the service.

Possible set-up: options to be evaluated depend on the priority decision on the chosen sales channels. The spectrum of opportunities will go from delivering the support and the spare parts from the headquarters of the parent company to that of organizing a direct local presence, through various outsourcing solutions.

Example 2: appliances

Critical: Everything is critical for consumer durables, that – given the small margins – require sophisticated and efficient distribution logistics. But they also require well performing after-sales service with call centers, engineers and vans for large household appliances or with call center and returns management for small ones.

Not critical: Nothing.

Possible set-up: local presence is necessary and, given the size of the appliance companies, this will, with few exceptions, be a direct presence. Only a few manufacturer of small appliances may intervene through distributors.

Example 3: fast moving consumer goods

Critical: the primary logistics is a key element of competitiveness. The distribution network must be designed with great attention.

Not critical: Little or no after-sales activities required. Maybe an outsourced call-centre is required.

Possible set-up: the priority is set by the sales set-up that is chosen. The solution to be adopted for distributing the goods will follow.

Summary

Logistics and service are a complex matter. The optimal solutions are dependent on a large number of factors.
The common elements are those of a thorough analysis of market requirements, the definition of a solution to these functional and careful selection of partners and service providers.

Author: Michele Schweinöster

International manager with deep understanding of consumer durable goods and of machinery, functionally expert in the areas of service, logistics and sales.

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