FARMCHEM’S DILEMMA:Coping with Distribution Challenges in the Supply Chain Management

Abstract

It was on Monday, the 3rd of April, 2011, when Mr. Charles Mulinge, the Managing Director(MD) of Farmchem Limited, a firm dealing in agricultural input products, received a phone call. “Hallo!” he answered the phone. The caller went on but a look at the MD‟s face was not amusing. After about five minutes, he banged the receiver back. “What is it with these middlemen?” he mumbled to himself. The caller was a field officer covering Mount Kenya Region. “Sir is there something wrong?” his secretary enquired. “That was Mount Kenya Regional Manager reporting again that the distributors in his region are not delivering orders to the farmers on time and are overcharging by a mark up of10%, making our products more expensive and therefore not moving”. After a long pause, he asked the secretary to invite the operations, finance and sales & marketing managers for an immediate meeting in his office. “Gentlemen, good morning again” he greeted his management team and continued. “Today we consider and decide whether we should maintain the status quo or shorten our supply chain by selling directly to farmers”. The meeting continued.