Distribution systems and productive models: the case of the distribution of a large product variety

Abstract

The link between productive organisation of the manufacturer and new car distribution is often summarised by the opposition between push and pull systems. However, this view remains incomplete. Indeed, it is not clear how the manufacturer's product policy, for example, plays a part in the general design of his distribution system. The issue of the distribution of an increasing variety of products – an issue that most European manufacturers are facing – is a good example to investigate the links of interdependency between the different elements of a productive model and a distribution system. The main problem of variety as a discriminating product policy (aiming at fulfilling the preferences of consumers in an increasing number of characteristics) is the greatest demand uncertainty and thus risk that the distribution system is now facing. This paper aims at analysing different ways of dealing with this uncertainty in distribution systems. The analysis highlights not only that there is no one-best-way in this field, but also that configurations chosen by producers – and not yet stable – result from several industrial arbitrages on distribution market structure and risk sharing in the value chain.