OGHAB DISTRIBUTION CO. Tehran, 16315

OGHAB DISTRIBUTION CO. Tehran, 16315-1498 Iran. Tel: (+9821) 27360. Fax: (+9821) 22873783 www.pakhshoghab.com email:info@pakhshoghab.com
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Scientific Approach in FMCG Distribution
OGHAB Distribution Co.
Introduction
As traditional distribution systems always impose many costs
on producers, Oghab Distribution Company was established
in 2006 , backed by the 60-years' experience of Oghab Halwa
Company and with a scientific point of view towards the
concepts of sales, distribution, etc.
Ever since its founding, and even before that, the company
availed itself of guidance from experienced consultants of
Modiran 21 Corporation to implement scientific sales systems
and quality management, and to constantly improve its
implementation methods and procedures. In the short time
since the founding of the company, the expansion of the
organization was such that the number of its personnel has
increased from 28 to more than 230, and its office space has
increased from an area of 300 m2 in a one-storey building to
an area of 1200 m2 in Oghab Holding Complex. And, currently,
products of its cart are stocked in a warehouse comprising
2500 m2.
Oghab Distribution Company offers direct service to more than
20,000 customers in Tehran and also extends its support in
all the country through more than 300 distributing agents in
provinces. Thus, it has established specialized departments
such as market research, marketing, advertising, and
separate supporting departments such as distribution,
IT, planning, quality guarantee, administrative and financial,
as well as 5 specialized sales divisions which support and
Oghab Distribution Company, in cooperation with experienced
cover all activities including outlet distribution in Tehran in the
consultants, gathers market information and data to assess
form of two separate divisions, sales in provinces of Iran, sales
its performance during annual reappraisal meetings, in order to
in special markets, sales to wholesale dealers located in the
define short-term targets and relevant strategic plans to achieve
Bazaar, and export.
them. Thus, Oghab Distribution Company makes special effort
One of the main reasons for the success of the company is
to offer constant commercial services to its contracting
adherence to strategic plans; since, the company believes an
companies.
approach, in which strategic management has a pivotal role,
Below, follows a brief account of departments and services of
could be the best way to achieve ones goals.
Oghab Distribution Company:
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Mission Statement of Oghab Distribution Company
In the name of God
The main activity of Oghab Distribution Company is distributing supermarket
products in Iran market. Besides, the services of the company also include
importing supermarket products and exporting Oghab products.
This organization distinguishes itself from other companies by a “scientific
perspective to the market”; therefore, the company has framed all its activities
based on master system of strategic management, which is in line with the goals
of Oghab Holding Corporation. Oghab Distribution Company believes that in
order to offer products to the market and in order to develop the market, it is of
utmost importance to utilize a “market plan”.
By investigating the market we try to learn about implicit and explicit needs and
wants of the customers in the form of opportunities and threats of the market.
Furthermore, by transforming this experience in the form of a “market plan”, we
convince our employees and employers to contact the market with a scientific
dialect and to improve the products respectively.
We believe Oghab Distribution Company is built upon two principles of respect
and science. Respect towards shareholders by proper selection of employers
whose opinions match scientific management.
Respect towards employers who have entrusted their products to us; so, we should
make every effort to develop their sales market. Respect towards employees
who the thoughts are behind and the executive forces of this development;
so, we should do our best for their satisfaction and dynamism. And, more
importantly, respect towards customers, to whose needs and requirements we
should respond properly.
Yet, in order to make the organization more scientific-based, we have planned
all our activities by a master strategic management system. Afterwards, by
commitment to ISO-9001-2008 standard, we would implement the plans
modeled upon scientific procedures.
Thanks,
Amir Hossein Naseri
CEO
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Organization Chart
CEO
Consultants
Executive Vice President
Treasurey
Management
Representative
Executive Secretary
Auditing
Vice President of Procurement
Vice President of Sales
Tehran Sales - Territory 1
Tehran Sales - Territory 2
Distribution
Provinces Sales
Special Markets
System & Strategy
Planning & Procurement
Marketing & Market Research
Vice President of Support
Foreign Trade
HR
Financial
IT
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Marketing and Market Research
By looking at the performance of Oghab Distribution Company
In 2010, this department’s personnel carried out more than 40
other outputs of this department. Such reports cover all products of
channels through which all sales channels are monitored
during recent years and also by studying the mission statement
extended scientific projects in the market and filled out more than
the distribution cart and their relevant results, besides influencing
carefully in order to detect and eliminate possible flaws
of the organization, the degree of importance of marketing and
17,000 research forms from supermarkets and wholesale dealers
the market plan, provides the suppliers with many solutions for
immediately through minute mechanisms.
market research department becomes evidence.
and consumers; hence, having passed a very fruitful year.
improving the procedures.
The process of monthly analysis of sales reports is also carried
This department, which carries on the role of CPU in the organization,
The marketing plan developed in this department, provides a path
Supervision and evaluation of the sales performance in different
out by this department. At the end of each month, the marketing
tries to distinguish itself from other distribution companies by
for other departments of the organization in order to follow; and,
markets, is another function of this department. This function
department holds meetings during which managers of the sales,
availing itself of several full-time questioners who always monitor
thus, to plan their activities on the basis of precise and scientific
is carried out by receiving assistance from a strong team of
marketing, and planning departments analyze the data regarding
activities of the market. Afterwards, the results of the researches
principles.
consultants through sessions of “product brands analysis” so as
the sales of the previous month. In the end, the results of the
carried out in the market are prepared in the form of several reports
Following-up proper implementation of the marketing plan
to carry out properly all procedures relating to product introduction
meetings are prepared in the form of compiled reports for the kind
such as: evaluation of the consumers’ satisfaction of the products,
and supervising its precise execution is another function of this
and presentation to the market.
attention of the suppliers.
products positioning, evaluation of customers’ reception of new
department. In certain cases, this follow-up and supervision
Another activity of this department is careful monitoring of the
Currently, this department includes 10 specialized personnel, who
products, etc. These reports are based on scientific fundamentals
has delivered very positive results such as improvement of the
process of distribution and sales. Such monitoring is carried out
try to accelerate the process of decision-making by presenting
and detailed methods of market research, and would be finally
product.
through a systematic and scientific framework entitled “customer
detailed and updated information of the market.
utilized to develop the marketing plan.
Periodical reports of market research and analysis are among
complaints”. In this system there has been considered some
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Product Supply Department
Oghab Distribution Company has always made every effort
two sides by completing required documents and preparing
to develop its products cart on the basis of the needs and
annual documentary evidences. This department also sends
wants of the customers while considering health issues. So,
inquiries, receives information about production lead time
the department of product supply has a very important role in
from suppliers, follows-up inquiries, coordinates deficits and
this regard.
arranges for return or destruction of products which do not
This department is the connection bridge between distributors
conform to the suppliers.
and the producers, and satisfies the demands of each side.
Besides, with regards to assessing the suppliers, this department
The product supply department provides grounds for signing
cooperates with market research department to make sure of
contracts and for defining ruling regulations between the
the qualification of products and suppliers on a 3-monthly basis.
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Commercial Department
This department’s activities divide into two main parts: Domestic
In import department, researches are carried out about possible
activities concerning agency registration in the Ministry of
Commerce and International Commerce.
products to be imported to the country. Following this phase,
Commerce and brand registration in the Register Office, as well
International Commerce deals with two main activities: import
their possible reception in the market and their selection is
as activities concerning GMP in the Ministry of Public Health are
and export.
carried out by the marketing department through extensive
also carried out in this department.
In export division, the target market is investigated with regards
market research.
to different aspects such as population, amount of income, age
An instance of such procedure is signing contract with
conditions, education level, geographic condition and all rules
Kellogg’s company. Currently, Oghab Distribution Company is
and regulations of the target country. During the next step,
the exclusive distributor of the products of this company in Iran.
relevant companies are identified and their relevant information
Experts of this department carry out annual extensive field
is gathered. Following this step, the qualified companies for
researches in different countries and arrange investigation tours
presenting the products of the distribution cart are selected in
to gather invaluable information for completing their database.
order to start correspondence and discussion for cooperation.
It is noteworthy to mention that with regards to imports, the
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Planning and Warehousing Department
The planning department develops sales forecasts of the
Besides, managing all of the company’s warehouses-comprising
products for the producers in the form of action plans by availing
around 2500 m2 and about 20 employees- is another function
itself of specialized personnel and by holding sales forecast
of this department. This function is carried out by utilizing new
sessions together with relevant personnel at the beginning of
and scientific methods of warehousing, relevant software, and
each year. During this process this department also considers
modern machinery.
past trends, as well as information gained through marketing
All procedures (such as loading and unloading distribution vehicles,
and market research, and information gained from suppliers
tracking and identifying products, checking and reporting non-
and marketing plans. The above process is followed by
conforming products) are accomplished with reasonable precision
placing orders to supply the required products, and updating
and speed consistent with other departments.
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the action plan by observing the amount of consumption and
sales of the products.
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Tehran Distribution
Proper presentation of products in the 22 districts of Tehran is
carried out through two separate sales divisions (Territory 1 Sales,
Territory 2 sales).
In the first place, the framework of sales divisions in Tehran is
based on the marketing plan provided by the sales committee and
the marketing department, who have compiled it upon entrance of
the products into the market or even upon policy-making for the
sales of old products.
At the beginning of the implementation of the marketing plan, the
distribution divisions of Tehran organize training sessions for their
staff in order to acknowledge special features of the products, the
contract specifications, and sales policies. Afterwards, a plan for
executing the adopted promotional measures of the marketing
plan is developed and after approval, executed. These divisions
also cooperate with the distribution department in covering new
markets by identifying customers; furthermore, they update the
call planning dynamically.
In the second place, these divisions develop the sales forecast on
the basis of past trends, seasonal sales conditions, and execution
timing of the marketing plans. After the preparation of the action
plan by the planning department, these sales divisions appoint
and announce sales targets for salespeople in different territories
of Tehran.
In these divisions, the sales assistants develop a plan for visiting
the customers on the basis of routes requirements and existing
for dispatching the orders.
Territory 1:
Territory 2:
facilities, in the form of tours of 12 to 18 days; these plans are then
It is important to mention that the maximum delivery time to
Tehran sales division in Territory 1 comprises professional
Tehran Sales division in Territory 2 comprises experienced
presented to the salespeople for follow-up. Three days after the
wholesale customers is 24 hours, and to retailers is 48 hours.
personnel including sales manager, 4 sales assistants, 25
personnel including sales manager, 3 sales assistants, 18
visit, the sales assistants check and control the proper execution
A good reference for evaluating the sales performance is
salespeople, and 2 sales experts, who cover 9000 retail
salespeople, and 2 sales experts, who cover more than 11600
of the visit, the salesperson’s demeanor during the visit, customer
gaining feedback from the sales procedure. This is achieved
stores and 130 wholesalers in districts 1 to 8, 13, 14, 21, 22,
retail stores and 250 wholesale stores in districts 9, 10, 11, 12, 15,
satisfaction and reasons for not purchasing.
through daily, weekly, and monthly standardized reports in
Lavasanat and North Eastern suburbs of Tehran.
16, 17, 18, 19, 20, South Eastern and Southern suburbs of Tehran
The salespeople visit shops with complete equipment, while
order to check the salespeople’s performance, the amount
This division pays special attention to empowering its staff and
and Eslamshahr-established in Khayyam office to be close to the
being aware of the past information of the customer, to get orders
of committal to covering their whole territory, the amount of
tries to improve capabilities of its salespeople by improving
Southern districts.
after receiving advice upon daily visiting routes. Sales assistants
deviation from each route, the amount of returned goods by
training methods.
This division pays special attention to validation and training of
pass the orders to order registration staff after checking all
stores, and execution of MPs and their efficiency. And, finally,
Thanks to its scientific management, this division has delivered
its staff and tried to achieve real and optimum sales results in
orders carefully and controlling the customers’ credit. Afterwards,
the actual sales performance is compared with the action plan
a 106% increase in terms of its sales amount compared with
Southern districts of Tehran.
relevant invoices are issued and passed to delivery department
for more analysis.
that of the previous year. Besides, the number of covered
Thanks to the implementation of principled and scientific methods
supermarkets has increased to 19% compared with the
in this division, its sales amount has increased to 42% compared
previous year.
with the previous year.
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Wholesalers Distribution
Oghab Distribution Company tries to acknowledge existing
route for each of the visitors. All the visitors are supposed to
previous year. The total number of customers of this division is
interactions of the traditional market, and to recognize the
visit the stores on the basis of the specified routes. The rest
nearly 260 wholesalers.
market through a scientific approach, and to penetrate the
of the procedure is carried out like the one mentioned about
target market through marketing plan.
Tehran Distribution.
Due to the considerable increase of the number of supermarkets
After checking information of each order, the sales assistant
and grocery stores, visiting all of them one by one is not cost
of this division takes action in supplying the ordered items of
efficient for the distribution company. Khayyam store is located
these stores. The traditional atmosphere of the Bazaar and
in the heart of the traditional Bazaar of Tehran with more than
its distinction with other stores requires a customized sales
40 years of experience. The main target of this store is to
approach. Currently, wholesalers division has succeeded in
penetrate wholesale markets of the capital; thus, to be able to
achieving outstanding results in Bazaar through implementing
cover distribution blind spots in Tehran.
a proper scientific method.
After the validation phase, carried out by the distribution
Thanks to the scientific management of this division, its sales
department, the sales assistant of this division defines a specific
level measured in Rials has increased to 42% compared to the
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Provinces sales Division
One of the strong points of Oghab Distribution Company is its
pull of the market and the performance of the agents to develop
through gathering detailed information and organizing visiting
All processes in this division are implemented in line with the
strong sales division for provinces of Iran. This division manages
policies of sustaining or changing the agents. Currently, this
tours. In the year 1389 more than 100 investigation tours have
marketing plan of each supplier. And, like other sales divisions,
all sales procedures in all parts of Iran, except Tehran.
department is in touch with more than 110 agents in different
been carried out in different cities of Iran resulting in more
all efforts are made towards keeping the execution of the
This division comprises about 10 professional sales experts
provinces of Iran. Thanks to careful maintenance and control
efficiency in the activities of this division.
marketing plan at an optimal level. This division tries to hold
who cover activities such as developing agents, product
of this connection, the outputs of this division have improved
Experts of this division try to develop motivational mechanisms
seminars with the presence of the agents to gather their points
marketing and sales to agents in provinces. This division ranks
considerably compared with the previous year.
in order to improve activities of the agents. These motivational
of view in order to optimize the organization’s activities.
all the agents through careful investigation and by analyzing
Oghab commerce always tries to empower agents and
mechanisms cover a vast spectrum: donating facilities, offering
sales data and credit evaluation. Furthermore, by organizing
distributors in provinces and towns. Sales experts of this division
free services, offering prizes in cash and in kind, designing the
personal visiting tours and field research, tries to keep its
constantly try to supply the agents and distributors with all the
interior decoration of the commercial centers, and installing
ranking information constantly updated, while evaluating the
necessary equipment, while monitoring their performance
signs at entrances.
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Special Markets
Scientific approach towards the market and identification of
profile completing, etc. are carried out regularly on the basis of
development. The diversified nature of this division’s sales
all the sales channels shows that a considerable percentage
standard frameworks. All sales procedures in this division-like
centers requires different and customized regulations and
of sales is carried out through channels other than the
other sales divisions- are carried out in line with the marketing
discussions which have been successfully achieved through
supermarkets and wholesalers.
plan of each product.
advising company in order to lead sales discussions more
The sales division for special markets tries to push the products of
This department deploys its staff in some important chain
effectively. Thanks to specialized sales staff and scientific and
the distribution cart into such markets. Part of the target market of
stores in order to provide grounds for achieving optimum sales
authentic methods, the sales output of this division has enjoyed
this division include: chain stores, state-run and private cooperative
of the products. These established staff, constantly supervise
an increase of more than 90% compared with the previous year.
companies, Shahrvand and Refah stores, restaurants, sports and
the arrangement of the products in the store in order to create
Another function of this division is to organize special sales
recreation centers, newspaper Kiosks, etc. It is tried to cover the
perfect atmospherics for the sales of the products.
teams who try to eliminate barriers and to find solutions to the
above markets through indirect methods.
Successful management of sales in many of the sales centers
problems in cooperation with professional salespeople.
The procedure of identifying customers, validating, grading and
of this division requires constant technical and practical
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Delivery and Transportation
After receipt of the orders from customers by the visitors, carrying
of 800 stores. Besides managing transport affairs of Tehran,
validation. Through this procedure, the credit amount of each
out all activities related to delivering goods, settling accounts, etc.
dispatching cargos to agents in provinces is also among duties
store and purchaser is evaluated and the final digit is considered
are among functions of this department.
of this department. Thanks to the scientific management of
to indicate their volume of purchase. The purchasers’ credit
This department tries to deliver all orders within 48 hours from
the Transport department, the costs of this department are
undergoes constant revision considering the volume of purchase
receipt of the orders by the help of more than 40 personnel and
maintained at an optimal level.
and the number of orders placed.
more than 30 Nissan and Isuzu vehicles.
Besides the explained issues, all procedures of receiving
Delivery route management, loading priorities, delivery time
payments are also carried out in this department. About 10
management based on the requirements of the customers, etc.
employees of this department follow up such activities full time.
are amongst important issues which are dealt with successfully
These activities also include following up rubber checks, and
in this department.
settlement of past accounts.
Delivery operation begins from 7:00 AM every day to an average
Another duty of this department is carrying out the procedure of
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Advertising Department
Oghab Distribution Company always looks for developing and
All advertising strategies are defined on the basis of market
implementing dynamic and effective marketing systems in
research and marketing plan.
order to improve products of its cart. So, advertising provides a
Oghab Corporation considers advertising a modern and
good solution in order to sustain loyal customers and develop
scientific activity, and avoids exertion of personal points of
new markets. Advertising has been listed amongst the various
view and tastes. This company implements scientific methods
activities of the company by acknowledging the fact that
to develop and execute advertising campaigns. This matter
nowadays sole procedures of presentation, distribution, and
could be improved in cooperation with advertising committees
sales are not sufficient, and that advertising has an important
and supervision of such affairs.
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role in successful marketing.
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System and Strategy Department
Management in Oghab Corporation has always been based
Experts of this department regularly monitor the progress of
These reports include sales amounts in terms of Rials, and
upon principled development and improvement. Different
each department and by developing indexes try to improve
sorted by different districts of Tehran, different cities, chain stores,
steps of principled development from the perspective of
progress and development of the departments.
wholesalers, and their percentage of coverage, compared with
Oghab Distribution Company include: 1- Devising a system
From the perspective of Oghab Distribution Company, this
previous periods. Of course, such reports provide invaluable
2- strategic management 3- information management.
department is very important, and every effort is made to
information for the managers for facilitating decision-making.
System and strategy department has succeeded in compiling all the
improve efficiency of this department through holding meetings
organization’s processes in the form of more than 25 procedures
and counseling professional advisors.
and 20 instructions, in cooperation with a strong advising team.
This department helps a lot in strategic decision-makings of the
Each department of the organization has detailed executive
organization by holding annual management review meetings.
procedures through which the performance of the whole system is
Amongst the many achievements of this department, we could
assessed. Such executive methods and systemic documents are
mention standard monthly sales reports which are accompanied
under constant revision and are taught to all the personnel.
by detailed analyses for the kind attention of the suppliers.
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IT Department
In Oghab Distribution Company, the flow of information is very
and organizing more than 75 computers and by controlling
high in terms of speed and volume, so the IT department takes
communication between various distribution offices.
on the role of maintaining communication, information security,
The specialized personnel of this department carefully supervise
and ensuring about the accuracy of information.
integrated warehouse and financial software and constantly
Creating reliable connection between Headquarter of the
studies up to date IT technologies, and tries to improve executive
company, warehouse, and Khayyam office is one of the main
and operational procedures of the company by implementing
achievements of this department. This department has provided
new communication systems such as GPRS, and GPS.
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perfect grounds for all procedures of the company by managing
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Financial Department
Administrative and Human Resources Department
As one of the main resources of the company is the human
resources, this department is considered one of the key
departments of the company. The agenda of this department
includes: paying more attention to internal training issues
based on the requirements of the organization and the human
resources, planning external training calendar, participating
in relevant seminars and holding training tours for visiting the
suppliers in order to acknowledge the features of the products,
etc. This department categorizes human resources on the
basis of the applicants’ dynamic and static capabilities, and
by creating motivation and welfare facilities boosts the morale
of the human resource and, as a result, improves efficiency of
their performance and satisfaction. This department has also
prepared a leaflet for early training of the staff which has been
implemented from the beginning of the year 1390 in all sections.
One of the biggest challenges of the HR department in Oghab
Distribution Company is the variety of the human resources
in this organization. Due to the wide span of the activities, the
company is in touch with human resources in different starta,
each group has different needs, so different motivational
methods should be implemented.
Holding annual celebrations is another way to improve the
spirit of teamwork and create a friendly environment among the
human resource.
This department prepares short-term and long-term plans and
The financial department studies the process of entering new
The HR department tries to utilize the efficient technique of
forecasts in order to manage financial resources and expenditures,
products into the distribution cart of Oghab Company, and after
“community meetings” in order to maintain connection between
and in order to provide financial resources for purchasing all the
determining its financial interests for the organization, decides
different departments and the management, and reduce
products of the distribution cart. This department implements
upon continuation or cessation of the process. Besides, in
contradictions and conflicts.
detailed scientific methods for calculating one of the most important
order to improve cooperation with the suppliers, prepares
Thanks to the scientific management of this department, job
and vital data of the organization (which is the cost of the products
weekly accounts for eliminating discrepancies and checking
promotion has found its proper meaning in Oghab Distribution
of the cart), as well as influencing other strategic decision-makings
payments with each supplier. This, indeed, has brought many
Company. Having achieved such high value, the managers have
such as starting, continuing, or suspending activities. It also tries
positive results for the company.
a high understanding of duties of their staff in order to form a
to reduce and control financial risks and large investments of the
strong body for the robust organization of Oghab Distribution
company respectively.
Company.
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