Distribution Management

Distribution Management

Definition: The management of efficient transfer of goods from the place of manufacturer to the point of sale or consumption.

This includes activities such as warehousing, material handling, packaging, stock control, order processing and transportation.

Importance

The use of intermediaries results from their greater efficiency in making goods available to target markets.

• Contacts,• Experience,• Specialization,• Scale of operation.

Offer the firm more than it can achieve on it’s own

through the intermediaries:

Purpose: match supply from producers to demand

from consumers

Functions

Information

Promotion

Contact

MatchingNegotiation

Physical Distribution

Financing

Location Analysis

Political risks, government rules.

Cultural and economic issues

Location of markets

Labor talent, productivity, costs

Availability of supplies, communications, energy

Land/construction costs

Proximity to raw materials and customers

Rail Cost-effective for shipping bulk products

Rail Cost-effective for shipping bulk products

WaterLow cost for shipping bulky, low-value,

non perishable goods, slowest form.

WaterLow cost for shipping bulky, low-value,

non perishable goods, slowest form.

TruckMost important carrier for consumer

goods, flexible.

TruckMost important carrier for consumer

goods, flexible.

AirHigh cost, ideal when speed is needed or

distant markets have to be reached

AirHigh cost, ideal when speed is needed or

distant markets have to be reached

PipelineCarry petroleum based products,

very low cost, requires little energy.

PipelineCarry petroleum based products,

very low cost, requires little energy.

Transportation Modes

InternetWeb sites have products available, used

especially for services.

InternetWeb sites have products available, used

especially for services.

Material Handling

• Material handling is the movement, storage, management and guard of materials, goods and products during all the stages under manufacturing, distribution, consumption and disposal.

Warehousing

• One key consideration in managing inventories is warehousing, which embraces a range of functions, such as assembling, dividing, and storing products and preparing them for reshipping

Inventory Control

The goal of inventory control is to satisfy the order-

fulfillment expectations of customers while minimizing both

the investment and fluctuations in

inventories

Just-in-Time:• JIT combines inventory

control, purchasing, and production scheduling

• Applying JIT, a firm buys in small quantities that arrive just in time for production and then it produces in quantities just in time for sale

Packaging

Packaging is the science, art and technology of enclosing or protecting

products for distribution, storage, sale, and use.

Packaging also refers to the process of design, evaluation,and production

of packages.

Order Processing

The starting point in a physical distribution system is order processing, which is a set of

procedures for receiving, handling, and filling orders promptly and

accurately

Electronic data interchange (EDI): • Between customer and supplier orders,

invoices, and other business functions are transmitted by computer

• Originally, EDI required a direct computer link between supplier and customer, now it is being conducted via the Internet

• EDI can trim the cost of order processing significantly, which in turn may reduce purchase prices

Customer Service

From a logistics perspective, customer service is the outcome

of all logistics activities or supply chain processes.

Customer service, when utilized effectively, is a prime variable

that can have a significant impact on creating demand and

retaining customer loyalty.

"Do not go where the path may lead, go instead where there is no path and leave a trail.“

by

Nikil

Jacob

by Nikil Jacob