Evening star., 1931-12-27
Maladies of Distribution

| liable contributor to the maintenancs
OF good will. and good will is a price
less asset for any firm in these davs
OF minimized buying. 1t takes wears
10 attain, but 1t can be DESTROYED in
a surprisingly brief moment with a
leW Ill judged marketing blunders.
therefore its maintenance right now
Is OF supreme Importance.
| This is hardly the place for a tech
nical discussion of the numerous items
which might be classed as wasteful
steps In distribution. But perhaps we
can catalogue few Of the more I'M
portant ones. There Is, first Of all, the
enormous expenditure in sales promo
tlon effort without adequate informa-
ton as to prospects In the given market.
a waste which the new distribution
census figures should materially al
ievlate Then there are the many in
| Juolclous credit practices, especially on
the part OF small firms which are In
aoequately informed as to the danger
limits OF lnstallment selling or Of open-
credit facilities. The Retail Credit
Mems Association has estimated that
losses through improper credit methods
among the retailers of the country NAV
well run as high as half a billion dol
lars year. This does not simply mean
through bad debts, but through laxity
In collection methods, through the
present excessive average Of 10 days for
settlement OF accounts, and In other
details or retail credit procedure.
Wasteful Items Cited.
Then, too, there are such wasteful
items as viciously destructive competi-
ton among distributors arising In many
+1n7tances through inadequate knowl-
edge as to the possibilities Of the given
market. There are also such factors
sS the presence OF too many links in
the distribution chain; insuffciency Of
data as to stocks on hand in the dis
trlnutlve channels; and disorderly or
hapnazard marketing, particularly Of
perlshables, thus resulting in gluts and
| famines.
AS I mentioned at the outset these
shortcomings do not by any means in
variably arise from some fault of the
wholesaler or retailer. After all In
many instances he is the unhappy VIC
tim OF circumstances far beyond his
control: For example, he suffers from
the returned-goods evil-the difficulty
OF keeping sale permanent because OF
the inclination Of the buyer in many
cases to take unwarranted advantage OF
the return privilege, thereby adding to
the costly wastes of distribution and
consequently increasing the prices paid
by all consumers
In addition to these various wastes
In the commercial phases of distribu-
ton there are, of course the possibili-
ties OF great saving in the actual phv-
Slcal movement Of merchandise We
nave in recent years, and especially in
connection with tho
evolved whole series Of new technical
improvements in the packing. handling
ana transportation Of commodities
new devices for loading freight cars and
trucks. skid platforms for the eco
nomical aSsemblage of boxes and con-
tainers In factories and freight depots,
sectional box cars greatly facilitating
the transfer OF freight between trucks
and railway cars. Avoidable wastes in
these fields, which amount to hundreds
OF mllllons OF dollars annually accord
Ing to competent observers. are being
aggreSslvely attacked through co-opera-
i've programs among manufacturers.
Joooers, carriers, warehousen1en, con-
suner bodies and governmental
agencies
Cut in Force Follows.
OF course, in some instances the
adoption of measures to eliminate waste
IN distribution involves the release Of
employees from specific establishments.
10 that extent this would certainly
seem to be an inopportune moment to
arrange widespread campaigns of the
character suggested above. But we
Should emphatically not conclude from
this that the elimination of waste In
distribution would result in the crea-
ton OF anything like permanent un-
employment problem On the contrary.
its ultimate effects would be to release
some labor which could be used in more
productive fields. Even mora significant
would be the help given to the family
BUDGETS OF our wage earners, who
would be the greatest benehciaries of
the lowered prices resulting from the
savings effected by eliminating and re-
ducing distribution wastes.
Certainly those conclusions are war
ranted by the records Of the past of
our American economic development.
We were successful in improving
methods In agriculture, mining and
manufacturing, eliminating waste and
increasing the output per worker with
the result that millions have been re-
leased from those occupations to enter
other industries, distribution and serv-
ice callings. Consequently, we have
been able to produce entirely new and
unheard-of commodities
The automobile industry, for example.
could scarcely have been brought be-
yond meager experimental stage with
out the introduction of waste -eliminat-
Ing processes in all directions. Then.
too, the reduction of the costs of its
distribution by most scientifically con-
trolled installment selling. mechanical
serNclng. highly expert publicity, care
ful market appraisals and other dis
tribution efflciencies made possible the
maintenance of price levels far below
those that would have been feasible
had no such relentless drive been put
on against wasteful distributive proc
esses. similar story could be told of
the radio, motion pictures and other
great industries.
And while We are on this employ
ment phase of the curtailment of wastes
in distribution, let us remember that
the elimination of wasteful practices
tends to make employment in the af-
fected trades more secure and stable.
When retail establishment introduces
more efficient stock control or account
ing methods it may temporarily result
in the elimination Of Job or two. But
In the long run 1t certainly fortifies
the establishment against the risks Of
bankruptcy and thus assures stabiliZa-
tion of employment for all of those In
the organiza ton who would otherwise
be running the risk of complete loss
Of jobs
Wrecks Were Avoidable.
Mony unfortunate wrecks Of distrib-
utive firms could have been avoided
during the last two years if more ac-
curate charts had been maintained by
| them for the better Guidance of their
operations, If warning signals had been
set and needed. Careful analyses Of
the retail bankruptcy records under
taken by the Department Of Commerce
In recent months reveal that far too
many hapless victims have proceeded
on the theory that their own intelh-
gence and knack for shrewd dealing
were sufficient to carry them through.
Those qualities are. of course, invalu-
able: but in coping with crisis Of such
magnitude as this one they are far