Definition, Functions, Location Analysis, transportation, Material handling, Customer service, Packaging, warehousing, inventory control

1. Distribution Management

2. 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.

3. Importance
The use of intermediaries
results from their greater
efficiency in making goods
available to target markets.
Offer the firm more than it
can achieve on it’s own
through the
intermediaries:
Purpose: match supply
from producers to demand
from consumers
• Contacts,
• Experience,
• Specialization,
• Scale of operation.

4. Functions
Information
Financing
Promotion
Physical
Distribution
Contact
Negotiation
Matching

5. 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

7. Transportation Modes
Rail
Cost-effective for shipping bulk products
Water
Low cost for shipping bulky, low-value,
non perishable goods, slowest form.
Truck
Most important carrier for consumer
goods, flexible.
Air
High cost, ideal when speed is needed or
distant markets have to be reached
Pipeline
Carry petroleum based products,
very low cost, requires little energy.
Internet
Web sites have products available, used
especially for services.

8. 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.

9. 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

10. 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

11. 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.

12. Order Processing
Electronic data interchange (EDI):
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
• 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

13. 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.

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