1. Executive Summary
A Multinational Company (MC) in Turkey has taken a company decision to change its Route to Market strategy from operating with one third party distributor model in the country to Direct Sales through MC owned regional Ideal Distribution Centers (IDCs) that will be established in eight locations in Turkey. The transfer to the new strategy will be implemented in three phases: selection of IDCs, moving into new IDCs and implementation of business as usual. A project group has been delegated to implement transition from third party distribution model to Direct Sales.
Phase I - Pre selection assessment
During the selection process of find appropriate IDCs; the MC Security Department will be responsible for identifying security risks/threats for the successful completion of the Project. Potential risks including terrorism, theft of equipment/product and strikes that could possibly turn violent will be considered. Cross-functional liaison and cooperation are underway, with detailed plans being formulated in order to ensure, as far as practical, the safety of our people and the protection of Company assets and information during all phases. Site selection will be conducted based upon risks as defined in section 3&4 and for each site a comparative matrix will be completed to demonstrate risk rating in five categories rated 1 (low risk) – 5 (high risk) concerning costs for mitigation. Phase one security costs will include site visit travel expenditures to conduct business risk assessments to compare candidate IDCs and finalize comparative matrix to submit the project board for their approvals.
Phase II - Transitional requirements
A project budget has also been allocated to conduct necessary enhancements at the selected and approved IDC buildings to bring up standards and operation requirements to MC level including security requirements. Security plans are also being extended in order to support the transition of the new business, following the move into our new IDCs. These focus on the rapid implementation of security Policy and Infrastructure, including contingency plans, together with selection process of security guards suppliers, and the installation of cost effective physical/electronic security equipment at the new IDCs. The security cost in the phase two will mainly include the cost of physical and electronic security equipments at the new IDCs. The total cost estimated is $X55,800 including CCTV systems and safe boxes at each IDC.
Phase III - Reoccurring operational requirements and costs
The new model of business will require new daily business applications. MC will have its own distribution team as well as new security team at the new IDCs. There is a need to deploy security guards to each new IDC to provide appropriate security according to MC Security Best Practices. The number of security guards will be determined upon security assessments at the candidate IDCs; however, estimated monthly total security guarding cost is approximately $X1,500. Daily stock at the new IDCs is assumed to be value of $X9,479,000 in total. Another critical point is daily distribution of our products to the retailers. It is planned to have total number of X86 MC owned distribution vehicles for the new IDCs which each of them will be loaded with $10,000 valued products and $X,859,000 will be collected from daily sales. For the protection of sale representatives (SR) and product as well as timely response in emergency situations, installing GPS/GPRS vehicle tracking system to each SR vehicle will be appropriate. The unit and installation cost is estimated to be $X28,100 as a one-off cost.