offered through its logistics project.
The core principle of FGP is that the retailer takes over the primary distribution function, traditionally the cost and responsibility of the supplier. These costs may have been built into the supplier’s price so the change in responsibility may have on impact on suppliers’ margins if product prices or distribution costs are not carefully renegotiated.
Anderson says: “The retailers’ prime interest is to reduce costs. They are in a strong position to negotiate transport contracts and will benefit from economies of scale. However, suppliers can also benefit from FGP through lower distribution costs, reduced responsibility for transport operations and improved service levels. Almost two thirds of Scottish suppliers involved in FGP claim it has been at least a satisfactory, if not positive experience.”materials, but do not necessarily have a need for the whole shipment at one time. For instance, an importer of valuable machinery parts which have come in from Australia may have a need for a small part of the shipment immediately, and the rest at various times during a production cycle.
“When the goods arrive at the frontier we can take them to our Dartford base and keep them until the customer has a need for them.”
Davies Turner must keep an electronic inventory, as part of the agreement with Customs, even though the goods can be stored in any part of the warehouse.
