Distribution consolidating products
It serves customers through three distribution networks: a network of retail stores owned and operated by SAQ, a network of grocery distributors, and a network of organizations that hold liquor licenses, including all hotels, bars, and restaurants in Quebec.Liquor license holders are served at the bottle level.The liquor store network and distributors are both served at a case level, but they have only 20 products in common.SAQ works from two unionized DCs in the Quebec province: one in Montreal, the other in Quebec City.This investment to enhance our supply chain reflects our commitment to providing the best technology distribution platform for our customers and partners.Located all under one roof, Avnet’s new facility will support our strategic business direction in expanding our footprint and business in the region,” said Frederick Fu, president of Avnet Asia Pacific.Think about how differently decisions are made at the independent dealer where a few customers (or even one in some cases) make up over 25% of the business vs.the LBM consolidator, where the largest customer might make up 1% of total sales. Now consider the life of a two-stepper/wholesale distributor to the LBM dealer channel.
Avnet has six logistics centres across Asia Pacific.“By consolidating our resources here in Hong Kong, we will be in a strong position to further extend our products and solutions within the industry.The varied locations came about due to past acquisitions.Through optimizing logistic flow and centralising inventory, the company expects to bring about steep productivity improvement of its north Asian region operation by more than 15 percent.“Asia Pacific is an important market for Avnet.The Montreal location comprises three different operations to handle the three distinct networks: SAQ receives 20 percent of its product on pallets via truckload carriers; 80 percent in containers shipped from overseas.The majority is received stacked directly on the floor of the container.
This dynamic is one of the many reasons why LBM dealers have followed suit, consolidating at an extremely rapid pace over the past decade.