INNOVATION IN DISTRIBUTION CHANNEL(S) & COST EFFICIENCY ON SMALL & MEDIUM ENTERPRISE SCALES’ PERFORMANCE: Operational cost

Firms in general, see packaging as a tool for product promotion & use. While the engineers, in general, see packaging as a protective device only. Interestingly, distribution management see packaging much more broadly. They see any change in design, size, media of transportation and so forth would contribute to the distribution efficiency. A recent study by Young in Lacroix on 800 American shoppers demonstrated that innovation in new packaging systems directly effected price expectation and product selection among the shoppers. He or she found if packaging can be modified properly, it is very likely to contribute a positive return on investment (ROI) by increased market share. It is also likely to raise prices. At then, the additional profit could be used to cover incremental costs. Morgado, suggested that plastic material based have advantages as they can provide less material, & also permit recycling. Using plastic materials, coloring activity, decorating activity, & printing activity can allow the innovated packaging to receive not only all the necessary information for the customers, but also other essential aspects including customer recognition H8 : Innovation in packaging will be positively associated with distribution performance in terms of efficiency.
“Acquisition is the logistic activity that makes the product available to the logistic system. It is concerned with the selection of supply source locations, quantities to be acquired, purchasing schedule, and the acquired product form”. The crucial of acquisition to logistic is that purchasing decision has physical and time aspect that influence logistic cost. “Acquisition or purchasing refers to those activities that take place between the organization and its suppliers”. In this department, besides product and prices, delivery, be accurate would become key element of the flow system. Usually, firms purchase things between 40% and 60% of its sales dollar for material; therefore, the efficiency of this stage would be concerned. Consider its important impacts on logistic cost, purchasing quantities, timing of purchasing, source location, & form of the goods become some factors to be importantly considered. Therefore, choosing single or multiple suppliers, hedging price due to the changing currency value, pricing & so on would become concerned to be looked further. Using technology in acquisition would be enable firm as a buyer obtain strategically valuable resources, achieve market power, or generate strategic renewal. H9: Innovation in acquisition will be positively associated with distribution performance in terms of efficiency
In terms of products’ flow efficiency, Borgstrom defines it how expenditure being disbursed in the lower point. The low cost would lead to firms’ profit. Empirical studies obviously showed the positive relationship between efficiency and profit is strong. Using efficiency as parameters also be able to influence firm’s innovative output that will refer to competitiveness. Empirical result of technical efficiency in Hungarian SMEs further emphasized that efficiency be intimately interrelated with profit. In consistent with Major, study of clothing firms in China also demonstrated high degree of sales both in domestic and export tend to be achieved by firms who have high degree of technical efficiency operation. Furthermore, As Ulaga emphasized time in delivery and operational cost could create value in efficiency. Moreover, innovation in distribution channel : Assortment; Order handling; Information system sharing; Inventory; warehousing and material handling; packaging; and transportation were significant positively leading to firm performance economic indicator as well, therefore H10 : distribution efficiency mediate the association between distribution channel innovation and the SMEs performance economic indicator.
All the suggestions above give clues for SMEs. Innovation in distribution channel will improve distribution efficiency and hence positively effect on their performance.”Acquisition is the logistic activity that makes the product available to the logistic system. It is concerned with the selection of supply source locations, quantities to be acquired, purchasing schedule, and the acquired product form”. The crucial of acquisition to logistic is that purchasing decision has physical and time aspect that influence logistic cost. “Acquisition or purchasing refers to those activities that take place between the organization and its suppliers”. In this department, besides product and prices, delivery, be accurate would become key element of the flow system. Usually, firms purchase things between 40% and 60% of its sales dollar for material; therefore, the efficiency of this stage would be concerned. Consider its important impacts on logistic cost, purchasing quantities, timing of purchasing, source location,