Data Requirements for Best-in-Class Multitier Distribution

"Over the past decade, markets have grown increasingly global, especially for technology companies. Rising incomes in underdeveloped countries have led to increased demand for a wide range of products. However, this opportunity also brings with it a challenge to manufacturers that want to track their sales at very granular levels.

Manufacturers may have some measure of visibility into their channels in developed markets, where the distribution channel typically consists of no more than two tiers – distributor to reseller to customer. Data quality continues to be a challenge in these markets, even though larger channel partners tend to have more sophisticated IT systems and may have a wealth of scanner data. This often is not the case in less developed markets, which are even more challenging. Distribution chains there may have three or four tiers and usually are more fragmented. There often are more partners to track, and because most are smaller distributors and retailers, their IT systems likely are less sophisticated. Moreover, these partners seldom have a contractual obligation to provide sales and inventory data to vendors and may be reluctant to share it, as their end-customer network is one of their most significant assets. There is the further complexity of different languages and alphabets that poses an added challenge to global channel visibility."