Distribution LogisticsNevroz GÖSTERİCİ 2012. April College of Dunaújváros Dunaújváros Táncsics M. u. 1/A. F/118/E.
Abstract Aim of the paper is to represent about distribution logistics.Logistics is the managemet ofthe flow of goods between the point of origin and the point of destination.İntegration of information,transportation,inventory,warehousing,material handling,packagingand often security.Here is an example:In the early morning,a major supermarket’s own truckdelivers fresh supplies to replenish those that were sold on the previous day tight to theloading ramp-all pre-picked for ghe retail outlets.At the same time,tje specialty-food retailernext door is buying goods for that particular day from the wholesaler.Distribution logisticsadressess these types of deliveries and others as well.In the process,distribution logisticscovers much more then the simple shipment of a product from Point A to Point B.( Logistiksysteme | Pfohl 2004)Figure 1. process of logisticsIntroduction The concept of logistics dates back to antiquity. Nevertheless, real interest toward the subjectof logistics arose during World War 2 when large quantities of men and material had to berapidly deployed around the world. Later on, in 1950s and 1960s the monetary and strategicvalue of logistics expanded at a rapid rate. Despite the fact that logistics exists in two forms (military and managerial), and both formsare very similar, it is very important to differentiate among the two of them.Military logistics is concerned with movement of goods and people. Managerial logisticsconcentrates primarily on finished products. Firstly,It could better to see the historical process of logistic.1940-1960: Establishing phase of logistics1960-1970: Understanding idea of logistics and gain a reputation1970-1980: Interchange age of priorities and models1980-until todays:New age of economic and technical changeImprovement of logistics can be added 3 main phase.a)Desintegration(1960-1980):In this period,we can see that activities of constituent parts oflogistics are conducted separately.Some of following operations processing in a institutionand partially they were outsourcing.• Deman providence• Purchansing• Requirements planning• Production planning• Factories’ stocks• Warehousing
• Material processes• Palletization• Inventories• Ordering process• Shipment• Customer services• Distribution schedulingb)Association(1980-2000):In this period logistical operations come under 2 main concept• Materials and supplies management• Pyhsical distributionc)Total integration(2000-Nowadays):Still-continuing this process add up desintegration andassociation gather under one single roof.Globalization,liberalization in world economy andconcordantly harmony efforts which force firms increases logictical activities importancesand reveal integrated logicstic concept.If I make a group of logistic factors;• Warehousing• Transportation• Stock management• İnformation and control• Packaging• Clearance• Customer servicesIf we analyze cost of logistic activities,we will see that shipment costs stand out.Logistic Costs RatioShipment costs %50-%65Inventory and material handling %20-%35Business layout design %10costs(planning and managing ofstorage and distribution centrals)Communication and information %5costs Distribution Logistics presents a complete and balanced treatment of distribution logisticsby covering both applications and the required theoretical background, therefore extending itsreach to practitioners and students in a range of disciplines such as management, engineering,mathematics, and statistics. There are some related areas of study for distribution logisticsincludes; Supply chain management Network design and transportation Demand forecasting Inventory control in single- and multi-echelon systems Incentives in the supply chain Vehicle routing(İhracatı Geliştirme Etud Merkezi/Lojistik Tarihçesi-History of logistic/Lojistik Elemanları-Factors of logistics)
1.Concept and scope of distribution logisticsDistribution logistics comprises all activities related to the provision of finishedproducts and merchandise to a customer. The products can be delivereddirectly from the production process or from the trader’s stock located close tothe production site or, possibly, via additional regional distribution warehouses.Like procurement logistics, distribution logistics is a market-linked logisticssystem. It links a company’s production logistics with the customer’sprocurement logistics.In distribution logistics, customer orientation plays a special role because ofthe close link to the customer. Workers in a distribution center frequently havemore contact with the customer than sales representatives do.The tremendous significance of service thinking in distribution logistics arisesfrom this customer orientation. The aim is to constantly search for innovativeways that offer the customer improved logistics solutions. In the process,special requirements are being made as the traditional marketing principle of“produce in a market-focused manner” is being replaced by the future-orientedmarketing principle of “sell first, produce later.” Furthermore, service isincreasingly being provided to the customer in a multi-faceted way based onthe principle of “just for you.” Both trends require a great amount of servicespeed and flexibility.1.1Marketing with a delivery serviceIf the delivery service is considered to be an instrument of marketing strategy,interdependencies with other instruments must be considered. This is becausethe instruments used in marketing strategy have an effect on the customer onlywhen combined with the marketing mix . Information about the currentinterdependencies will be provided in later articles about distribution logistics.In the process, marketing instruments are combined into tools of productstrategy, contract policies or terms & conditions, communications strategy anddistribution strategy.(  Logistiksysteme | Pfohl 2004)2.Third Pary LogisticsA third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that providesservice to its customers of outsourced (or "third party") logistics services for part, or all oftheir supply chain management functions. Third party logistics providers typically specializein integrated operation, warehousing and transportation services that can be scaled andcustomized to customers needs based on market conditions and the demands and deliveryservice requirements for their products and materials. Often, these services go beyondlogistics and included value-added services related to the production or procurement of goods,i.e., services that integrate parts of the supply chain. Then the provider is called third-partysupply chain management provider (3PSCM) or supply chain management service provider(SCMSP).(Selecting a Third Party Logistics (3PL) Provider Martin Murray,about.com-http://en.wikipedia.org/wiki/Third-party_logistics)2.1.Types of 3PL ProvidersThird-party logistics providers include freight forwarders, courier companies, as well as othercompanies integrating & offering subcontracted logistics and transportation servicesHertz and Alfredsson (2003) describe four categories of 3PL providers:• Standard 3PL provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) – the
most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity.• Service developer: this type of 3PL provider will offer their customers advanced value- added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks.• The customer adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the companys logistics activities. The 3PL provider improves the logistics dramatically, but do not develop a new service. The customer base for this type of 3PL provider is typically quite small.• The customer developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This occurs when the 3PL provider integrates itself with the customer and takes over their entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them.(Hertz and Alfredsson 2003)2.2.On-Demand TransportationOn-demand transportation is a relatively new term coined by 3PL providers to describe theirbrokerage, ad-hoc, and "flyer" service offerings. On-demand transportation has become amandatory capability for todays successful 3PL providers in offering client specific solutionsto supply chain needs.These shipments do not usually move under the "lowest rate wins" scenario and can be veryprofitable to the 3PL that wins the business. The cost quoted to customers for on-demandservices are based on specific circumstances and availability and can differ greatly fromnormal "published" rates.On-demand transportation is a niche that continues to grow and evolve within the 3PLindustry.Specific modes of transport that may be subject to the on-demand model include (but are notlimited to) the following:• FTL, or Full Truck Load• Hotshot (direct, exclusive courier)• Next Flight Out, sometimes also referred to as Best Flight Out (commercial airline shipping)• International Expedited(http://en.wikipedia.org/wiki/Third-party_logistics)3.Outsourcing Distribution:More flexibility less risks3.1.What is outsourcing?Nowadays,firms want to focus their core job by this way they want to improve their ability.Soit reveal a tendency.That’s mean firms take some help for some organizations from anotherlogistical firms.Firms can set all other activities to the other firms except firms core ability.Inthis way they both do resource savings,downsizing and they can focus their core business.
A firm can’t be the best in every area.If firm can not shirk some of their function they canleave it to firms which are more exprienced than them.In basic of traditional outsourcing,firmprocure raw materials from the outside.But nowadays,they outsource everything except theirraw materials.For example,Westinghouse is very well at producing but they realise that thereare well-exprienced company for transportation and they had an agreement with thisexprienced logistic company.There is another example for outsourcing.Roll-Royce is theworld famous car company in car industry.Once they had a big crisis.In 1991-1992 they lost150 million dollar(Silver Spur Touring Limuzin).The only way was outsourcing for them andthey did it.Now they outsource vehicle body,axle tree etc. otherwise they focusengine,paint,leather etc.Outsourcing means global sourcing.For decreasing material cost,firms make a bargain withanother firms which is far from there about 8000 mile.(Richard L. Dalt, Management,2. Edition,Dryden Press, London, 1991, page 611---http://www.msxlabs.org/forum/ekonomi/73392-outsourcing-dis-kaynak-kullanma-kavrami.html#ixzz1sF853RlU)3.2.Outsourcing Product Distribution When distribution is not a core competency for your company and you do not have theresources to make it one, outsourcing the function can help your company grow by allowingyou to focus on your mission-critical activities. There are two types of outsourcing that arecommon among start-ups - traditional distribution and drop ship fulfillment.(DSF) Traditional distribution outsourcing involves hiring a third party to store and distribute yourproducts through its national or international distribution network; this party provides thestaff, warehouses, distribution center and transportation fleet.The second type of outsourcing,DSF, has grown in parallel with B2C retailing over the Internet. With DSF, a start-upcompany sells a product, charges the customer, generates a purchase order, and sends the POto the manufacturer or supplier, who then fulfills the order by shipping the product directly tothe customer. Since the start-up never possessed the product, the company does not incur anyof the costs associated with storing or purchase the product. Many Internet start-ups haveadopted this streamlined business model.Unfortunately, companies need to be careful when choosing an outsourcing partner.Outsourcing is not a panacea - if your third-party distributors procedures and performance arenot carefully monitored, you risk permanently alienating the customers you have worked sohard to attract.The key to a successful outsourcing relationship includes understanding the process,specifying objectives, establishing internal procedures for evaluating performance againstobjectives, and deploying systems that help to manage the function effectively.Watching Costs and ServiceIf the manufacturer or distributor, which may be the same company, fulfills the customersorder correctly, everyone is happy. However, in most cases, there are problems in one or moreof these key areas:· Customer service - Another company may be distributing your products, but ultimately youare responsible for the customer relationship. True, your company does not have direct controlover the distribution process, but the customer only cares about receiving the product - not
who sent it or how it got there. If something goes wrong, you are responsible and must dowhat is necessary to correct the situation.· Shipping costs - Most manufacturers are setup to ship truckloads or pallets of products, notmultiple orders of a single product. There are also manufacturers that require you to purchasemore products you need, others set ridiculously high prices for the service, and some simplywill not ship the orders. In some cases, start-ups are "kitting" a number of products, notbecause it adds value for the customer, but because it pushes the dollar value of their orderabove a threshold where the manufacturer will agree to DSF the products.· Profitability - Shipping costs directly affect your bottom line. Many start-ups are passingalong the manufacturers shipping costs to their customers, raising the price of their productsand putting themselves at a disadvantage in a competitive market. If the start-up does not passalong the entire cost, the shipping expense cuts into the profitability of every transaction.Getting Automated HelpSuccessfully managing a third-party distributor requires establishing internal monitoringprocesses and requiring that specific employees are responsible for this function.These employees should also be responsible for developing and deploying computer systemsto help automate the management function. Here are five critical requirements for youroutsourcing relationship with your distributor:· Establish measurable standards for distributor performance.· Conduct periodic performance reviews.· Visit distributor sites to check security procedures (only if the start-up owns the inventory).· Monitor customer feedback and satisfaction levels.· As sales volume grows, periodically revisit the decision to outsource the distributionfunction.The right computer system can improve your ability to manage the distribution function inthree areas:· Communication - To allow you to automate communication with your suppliers andmanufacturers, you must establish a back-end system. This means that you should not relyjust on basic email, generated by an employee, to track orders. For example, you send thesupplier an email to check on a backlogged product, someone then emails you back with aresponse, and finally you re-key the information into your system - imagine a handful ofemployees checking 500 products. To be more efficient, you need a system that will scale thisfunction as your volume expands and will use automated email, fax, Web portals and/or EDIto communicate order information.· Visibility - You must know if a product is available before it is sold, and you cannot knowthis until you view your suppliers inventory to find out how much product you have beenallocated and what is available. To do this, you need an application that provides you withvisibility into your suppliers inventory tracking system.· Track and Trace - Customers want to know the status of their order: When was it shipped,where is it now, and when will I get it? If you want to retain customers, you need to be sure
your computer system helps you manage returns, exchanges and refunds efficiently. Aconsulting organization that specializes in distribution and transportation can help you setupeffective internal processes and, if necessary, build and deploy the computer systems youneed to manage an outsourced distribution function for maximum benefit. Part of aconsultants value can be in the area of knowledge transfer, educating your organization onhow the distribution and transportation function works at the macro level and helping you setrealistic expectations.(Logistics and Supply Chain online magazineAug. 2, 2000) 3.3. Benefits of Outsourcing • Even for small amount of goods,firms’ marketing and distributing network achieve every point of destination.Thus,firms can move more fast to customer in outlet. • Decreasing stocking costs. • In the market shipment and transportation costs are so high.Firms can economise costs than they can face their fields of activity. • Shipment costs can decrease with logistic service providers’ high volume capacity and leading ability. • Stock level can be minimized. • Saving manpower. • Some situation like losts,accidents and thieves can be assigned to logistic firms. • Firms can reach worldwide abilities and new technology There are some facts can effect firms for using(or not use) 3PL; 1. Centralization 2. Risk and control 3. Expenditure and service activities 4. Information technology 5. RelationshipsTransportationTransport or transportation is the movement of people, animals and goods from onelocation to another. Modes of transport include air, rail, road, water,cable, pipeline, and space.The field can be divided into infrastructure, vehicles, and operations. Transport is importantsince it enables trade between peoples, which in turn establishes civilizations.Transport infrastructure consists of the fixed installations necessary for transport, and maybe roads, railways, airways, waterways, canals and pipelines, and terminals suchas airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots(including fueling docks and fuel stations), andseaports. Terminals may be used both forinterchange of passengers and cargo and for maintenance.Vehicles traveling on these networks mayinclude automobiles, bicycles, buses, trains, trucks, people, helicopters, and aircraft.Operations deal with the way the vehicles are operated, and the procedures set for thispurpose including financing, legalities and policies. In the transport industry, operations andownership of infrastructure can be either public or private, depending on the country andmode(http://en.wikipedia.org/wiki/Transport)
Distribution CentreA distribution center for a set of products is a warehouse or other specialized building, oftenwith refrigeration or air conditioning, which is stocked with products (goods) to beredistributed to retailers, to wholesalers, or directly to consumers. A distribution center is aprincipal part, the order processing element, of the entire order fulfillment process.Distribution centers are usually thought of as being demand driven. A distribution center canalso be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk breakcenter, and a package handling center. The name by which the distribution center is known iscommonly based on the purpose of the operation. For example a "retail distribution center"normally distributes goods to retail stores, an "order fulfillment center" commonly distributesgoods directly to consumers, and a cross-dock facility stores little or no product but distributesgoods to other destinations.Distribution centers are the foundation of a supply network, as they allow a single location tostock a vast number of products. Some organizations operate both retail distribution anddirect-to-consumer out of a single facility, sharing space, equipment, labor resources, andinventory as applicable.A typical retail distribution network operates with centers set up throughout a commercialmarket, with each center serving a number of stores. Large distribution centers for companiessuch as Wal-Mart serve 50–125 stores. Suppliers ship truckloads of products to thedistribution center, which stores the product until needed by the retail location and ships theproper quantity.Since a large retailer might sell tens of thousands of products from thousands of vendors, itwould be impossibly inefficient to ship each product directly from each vendor to each store.Many retailers own and run their own distribution networks, while smaller retailers mayoutsource this function to dedicated logistics firms that coordinate the distribution of productsfor a number of companies. A distribution center can be co-located at a logistics center.Storage locations and storage containersGoods (products) arrive and are stored in a distribution center in varying types of storagelocations and containers suited to the product characteristics and the amount of product to betransported or stored. These types of locations and containers have specific industry-acceptednames. Specialized pieces of equipment (material handling equipment, or MHE) are used tohandle the various types of containers. The following is a list of some of the names andcharacteristics of common storage containers:Intermodal containers (shipping containers) are used for the efficient transportation of goods.Standards specify the volume and dimensions of containers to facilitate efficient handling.Pallets are one of the most commonly used means to store and move product in a distributioncenter. There are many specialized devices (material handling equipment or MHE) used tohandle pallets - see forklift truck,pallet jack,pallet inverter and unit load automated storageand retrieval systems (ASRS). Pallets are stored on the floor, may be stacked, and may bestored in pallet ranking.Gaylords are large single boxes usually connected or attached to a pallet.
Cases and Cartons are boxes usually containing many items. In distribution centers there is agenerally accepted distinction made between the terms "carton" and "case", although both areboxes. Goods are received and stored in cartons, while goods are shipped in cases. A storedcarton is called a case once it has been picked or pulled for shipment.Totes are reusable containers used to hold and transport goods.PackagingPackaging is the science, art, and technology of enclosing or protecting products fordistribution, storage, sale, and use. Packaging also refers to theprocess of design, evaluation,and production of packages. Packaging can be described as a coordinated system of preparinggoods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects,preserves, transports, informs, and sells.In many countries it is fully integrated intogovernment, business, institutional, industrial, and personal use.Consumer Goods DeliveryMost consumer goods are delivered from a point of production (factory or farm) through oneor more points of storage (warehouses) to a point of sale (retail store), where the consumerbuys the good and is responsible for its transportation to point of consumption. There aremany variations on this model for specific types of goods and modes of sale. Products sold viacatalogue or the Internet may be delivered directly from the manufacturer or warehouse to theconsumers home, or to an automated delivery booth. Small manufacturers may deliver theirproducts directly to retail stores without warehousing. Some manufacturers maintain factoryoutlets which serve as both warehouse and retail store, selling products directly to consumersat wholesale prices (although many retail stores falsely advertise as factory outlets). Building,construction, landscaping and like materials are generally delivered to the consumer by acontractor as part of another service. Some highly perishable or hazardous goods, suchas radioisotopes used in medical imaging, are delivered directly from manufacturer toconsumer. Home delivery is often available for fast food and other convenience products,e.g. pizza delivery. Sometimes home delivery of supermarket goods is possible. A milkfloat is a small battery electric vehicle (BEV), specifically designed for the delivery offresh milk.Delivery VehiclesVehicles are often specialized to deliver different types of goods. On land, semi-trailers areoutfitted with various trailers such as box trailers, flatbeds, car carriers, tanks and otherspecialized trailers, while railroad trains include similarly specialized cars. Armoredcars, dump trucks and concrete mixersare examples of vehicles specialized for delivery ofspecific types of goods. On the sea, merchant ships come in various forms, such as cargoships, oil tankers and fishing boats. Freight aircraft are used to deliver cargo.(http://en.wikipedia.org/wiki/Distribution_center)1.Logistics for Customer SatisfactionBefore ending this topic I want to explain something about customer satisfaction related withLogistics.The term logistics is often misintrepreted to mean transportation. In fact, the scope of logisticsgoes well beyond transportation. Logistics forms the system that ensures the delivery of theproduct in the entire supply pipeline. This includes transportation, packaging, storage andhandling methods, and information flow. The impact of logistics in the ability of a company
to satisfy its customers cannot be overstated. All other efforts at modernization within acompany would not bear fruit until the logistics system is carefully designed to facilitate thesmooth and efficient flow of goods in the system.1.1The value of LogisticsMaterial handling and storage are typically labelled as "non-value adding" activities. Whileone can appreciate the motivation behind such labeling as one directed towards wastereduction, it can lead to is an erroneous assumption that all material handling and storage canbe avoided. While manufacturing processes provide "form utility", logistics related activitiesprovide "time and place" utility to a product. The challenge is to provide the time and placeutility at a competitive cost. If a company can achieve this goal, it will gain a significantcompetitive advantage in the marketplace.1.2Pull vs. Push SystemsThere are two basic approaches of bringing the product to its final destination, i.e., thecustomer. In a Push system (See Figure 1), products are pushed from the manufacturing plantsto distribution points based on a sales forecast. The second approach is the Pull system (SeeFigure 2) which requires that the product be pulled from the plants based on actual demand.In a Push system, since all the product is deployed based on the sales forecast for each region,an inaccurate sales forecast incurs several severe penalties which include:• Increased safety stock• Larger Distribution Centers/Godowns• Higher stock transfer ratesThe pre-order deployment of product increases safety stock. Since there is greater uncertaintyassociated with forecasts, which are often little better than educated guesses, the system mustprovide for variations in the demand in a particular region serviced by the particular godown.In addition the system must provide for errors in the overall forecast for the country as awhole. These concerns lead to the carrying of larger safety stocks, which necessitate largergodowns.
The irony in the concept of safety stocks is that although sufficient stocks may exist in thesystem, the product mix demanded in a particular region may not exist in the regionalgodown. This necessitates inter-godown transfer of goods. The result is an increase in thetransportation costs system-wide, in addition to handling and shipping costs, informationcosts, product loss and damage, and poor customer service. The more points of distribution inthe system, the greater the penalties incurred for unpredictable order fluctuations.The goal of any logistics system is to maintain or improve customer service. In the Push modeof operation, the penalties of higher safety stock, larger godowns, and inter-godown transferare not the only penalties. Stock rotation becomes more difficult to maintain. Handling of allproducts at each godown involves unloading, staging, storing, picking, staging and loading forshipment. All these activities involve an element of cost. In addition, there is a potential forproduct damage each time a product is handled.There are some positive aspects of a Push system as well. These are:• Small plant warehouses• Potential for higher customer service• Lower transportation costsSince the majority of the product is stored at the godowns, the plant needs to maintain a lowinventory of finished goods. This allows the plant to utilize its space for production andeliminate the need for a full warehouse staff. If the forecast is accurate, the Push systemprovides the potential for higher customer service by having the product ready for deliverydirectly to the customer/retailer. Finally, by having the products deployed in the godowns, theplants have the capability of shipping full truckloads and thereby reducing the system-widetransportation costs.A Push system works best when sales are consistent, the product variety is small, and thereare a few regionsl distribution points.(Indian Institute of Materials Management-http://www.iimm.org/knowledge_bank/1_logistics-for-customer-satisfaction.htm)Distribution Systems Before settling for a distribution system the marketer has too keep in mind various factorsaffecting distribution system (like marketing decision and relationship issues). The following distribution designs are available to the marketer for his distribution system: 1. Direct Distribution Systems 2. Indirect Distribution Systems 3. Multi-Channel or Hybrid Distribution Systems 1. Direct Distribution Systems In direct distribution system the marketer reaches the target consumer directly without the use of any intermediary. The distribution chain is small and no other party can take ownership of the product being distributed. The direct distribution system can be further sub-divided on the basis of the methods of communication that takes place during sale between marketer and consumer. These methods are: • Direct Marketing Systems
In this system the consumer buys the product based on information gained from impersonal contact with the marketer like by visiting the marketers website or ordering from the marketers catalog. Or he buys based on information gathered through some personal communication with a customer service personnel who is not a salesperson and can be reached through a toll-free number. • Direct Retail System In this type of system the marketer operates his own retail stores. A perfect example of this system is Starbucks. • Personal Selling Systems In this system the distribution of the product is carried forward by people whose main responsibility is creating and managing sales (for instance a salesperson). He persuades the buyers into placing an order. This order may not be handled by the salesperson but through websites or toll-free telephone numbers. The sales person plays a vital role here in generating sales. • Assisted Marketing System In this form of distribution system the marketer handles the distribution of his product and helps it reach directly to the end user. However he needs assistance from others to spread awareness about his product among the customers. An example of assisted marketing system is e-bay, here the buyers and sellers are brought together for a fee. Agents and brokers can also be included in this category.2. Indirect Distribution System In indirect distribution system the marketer includes intermediaries or other members in his distribution chain. These resellers make sure the product reaches the end user, while performing their duties they take complete ownership of the product. However the reseller may sell products on a consignment basis wherein the reseller pays for the product only when the product is sold. The resellers may be expected to take up a few responsibilities to help boost the sales of the product. Indirect methods include the following: • Single-Party Selling System In this system the marketer involves another party to sell and distribute his product to the end user. An example of single-party selling can be when the product is sold through large store-based retail chains or through online retailers. In this case the distribution system is also referred to as trade selling system. • Multiple-Party Selling System In multiple-party selling system the distributor involves two or more reseller in the distribution process before the product reaches the end user. This is most likely to happen when a wholesaler buys the product from the manufacturer and then sells it to the retailer.3. Multi-Channel (Hybrid) Distribution System
A marketer is said to be using a multi-channel or hybrid distribution system when he utilizes more than one distribution design. As we have studied earlier in the example of Starbucks, multiple distribution designs are put to use in the distribution of its product. It uses a direct retail system when it sells its products in company-owned stores, a direct marketing system by selling via direct mail and single party selling system is put to use when its products are sold through grocery stores. Apart from these other distribution systems are also put to use. Multi-Channel distribution system is advantageous as it expands the distribution system and more customers can be reached. The possible disadvantage again is channel conflict of which the marketer should always be cautious.( http://www.tutorsonnet.com/marketing_homework_help/distribution/distribution_syst ems_assignment_help_tutoring.htm)REFERENCES(All references include of this date:10.04.2012)http://www.msxlabs.org/forum/ekonomi/73392-outsourcing-dis-kaynak-kullanma-kavrami.htmlhttp://www.biymed.com/pages/makaleler/makale41.htmhttp://en.wikipedia.org/wiki/TransportThe Handbook of Logistics and DistributionManagement(http://www.amazon.com/Introduction-Distribution-Logistics-Statistics-Practice/dp/0471750441)