European distribution: some key success factors

Europe is home to a highly prosperous and densely-populated consumer market. The optimum organisation of the total distribution chain and the related logistical procedures will ensure that your products reach the consumer on a just-in-time basis and at a minimum cost.

Postponed manufacturing

A very important part of your logistical optimisation is that of postponed manufacturing. This entails finalising your products in accordance with the requirements and customs of the European customer after shipment to Europe. This is done in a European Distribution Centre (EDC), run either by your company or by a logistics service provider.

What do we mean by ‘finalising products’?

Finalising your product can entail many things, from assembling the components so as to benefit from lower customs levies to (re-) packaging, sealing, labelling consumer goods in the native languages and with the right shop prices, quality control, etc. All changes are implemented in one central location, close to the target market. That means a significant cut in stock and other overheads, as well as upping flexibility with respect to the customer.

Cost efficiency

Bonded warehouses, VAT warehouses and import licences (to avoid pre-financing VAT) cater to the cost-efficient implementation of all logistical procedures. When the goods leave the European Distribution Centre (EDC), they are shipped directly to the various companies or shops across the European continent. You no longer require individual stock per European country, but you now have direct services from a central European warehouse. An EDC must, of course, be well-versed in the customs and habits that prevail amongst the end-users in the different countries. This is another contributing factor to considerable cost-cutting.

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- Reverse logistics
- A case in point: Nike EMEA Logistics Center