ABSTRACT
This chapter explores the implications of the changes and specifically concentrates on the management of external service providers. Rhone Poulenc have undertaken a fundamental change in their distribution operation which resulted in savings of over 10 per cent, and this is used as an example of the changes that are occurring elsewhere in the business world. Historically, distribution was about optimizing the use of facilities and vehicles. This was achieved through line managing the operation so that resources were utilized, as well as possible, in terms of vehicle fill, days run, etc. In 1996, Rhone Poulenc decided to undertake a fundamental review of their distribution operation with the aim of improving customer service, while at the same time reducing their overall costs. Distribution managers also need to be able to manage the third-party providers in terms of service and cost–the development of 'partnerships'.
