Creating New Reward Systems

In many organizations there are two systems for rewarding people. The most important people in the company usually get to share in the proceeds of the business in the way of salaries, bonuses and stock options. 

The least important people in the company usually only receive a paycheck. The question now becomes what is your organization doing to ensure that when the organization does well that everyone who is involved will be compensated in an equitable manner. 

We are seeing the concept of skill based pay, pay ffir overall performance and team incentives becoming more important than individual performance reviews and incentives.With all these challenges facing organizations there will undoubtedly be a major impact in the area of logistics and distribution. 

The first action that any organization should take is to review their distribution channels from the standpoint of a customer. The Customer doesn't care where the product or service came from' the customer doesn't care how or why it arrived, provided that the right product or service was delivered at the right time and in the right place, in the right condition at the right price. 

The customer only asks where or how questions when these criteria have not been met. Customers today expect and demand delivery assurance. Our logistics and distribution systems must be capable of providing guaranteed delivery commitments. 

Many activities in distribution channels add waste of time, waste of space, waste of movement, waste of effort, and waste of cost into the supply chain. 

Customers expect these wastes to be eliminated because they are not prepared to pay for them. Customers have a right to expect direct delivery from their suppliers without any intermediate stocking points, material loading and unloading and repackaging. 

When companies realize that information is a valuable commodity they will start the paradigm shift necessary to convert from physical warehouses and distribution networks to data warehouses and information networks.