Innovation refers to the application of new technologies or modifications of existing methods within various functions of the distribution channel.
This innovation encompasses improvements in assortment, order handling, information sharing, product and distribution scheduling, inventory management, transportation coordination, packaging, warehousing, and acquisition.
The study emphasizes how these innovative practices in distribution channels can enhance efficiency and ultimately impact firm performance positively.
This marketing academic research paper aims to explore the relationship between distribution channel innovation, efficiency, and firm performance among export-oriented SMEs in Indonesia.
- Paper Name: Innovation in Distribution Channel, Cost Efficiency & Firm Performance: The Case of Indonesian Small & Medium Enterprise Scales
- Authors: Ferri Kuswantoro (PhD candidate University of Malaya), M. Mohd Rosli (University of Malaysia Kelantan), Radiah Abdul Kader (University of Malaya)
- Publishing Year: June 2012
- Published in: International Journal of Business, Humanities and Technology
Key variables studied in the academic paper include assortment, order handling, information sharing, product and distribution scheduling, inventory management, transportation coordination, packaging, warehousing, and acquisition.
- Assortment: Refers to a collection of two or more types of goods that complement each other directly or possess some degree of potency for future contingencies.
- Order Handling: Involves the crucial logistic activity that speeds up the flow of products and services within a business.
- Information Sharing: Essential for distribution channel performance, involving the coordination of channel members to enhance logistic efficiency.
- Product and Distribution Scheduling: Relates to the timing and location of production and delivery activities to optimize income and resource usage.
- Inventory Management: Involves the control and organization of assets within a business, crucial for avoiding mismanagement that can impact productivity and customer satisfaction.
- Transportation Coordination: Focuses on efficiently managing transportation operations to reduce costs, improve service quality, and enhance business competitiveness.
- Packaging: Seen as a tool for product promotion, protective device, and contributor to distribution efficiency through design modifications.
- Warehousing: Provides time utility for customers by handling finished goods and materials efficiently within warehouse facilities.
- Acquisition: The logistic activity that makes products available in the logistic system, involving selection of supply sources, quantities, purchasing schedules, and product forms.
The study's findings indicate a positive significant relationship between innovation in distribution channels and distribution efficiency, ultimately improving overall firm performance.
The research emphasizes the mediating role of distribution channel efficiency in enhancing the association between distribution channel innovations and SMEs' performance indicators.
- Implement innovative strategies in assortment and order handling to enhance distribution efficiency.
- Utilize information sharing technologies to improve communication within the distribution channel.
- Optimize product and distribution scheduling for operational efficiency.
- Enhance warehousing practices through innovative solutions.
- Invest in packaging innovations to boost product promotion and protection.
