DISTRIBUTION MANAGEMENT
Meaning & Concept of Distribution:
1. Distribution system can be defined as the sequential flow of procedures, systems and activities which are designed and linked to facilitate and monitor the movement of goods and service from the source to the consumer. Essentially, distribution is about making products and services available to the end user when and where they need them.2. Often times, you might hear the term channel of distribution systems. These two terms relate to a group of organization or individuals who have an impact on the flow of products and services from the source production and the end consumer.
3. To reiterate, distribution systems refer to making products and service available to the customer base when they are in need and where they can be used.
4. Below, some of the key attributes associated with distribution systems and the benefits they offer are outlined:
a. Time: When the consumer want to obtain the product or services.
b. Place: The place attribute is where the consumer wants to obtain the products or service.
c. Control: Consumer ownership of the products or service.
d. Method: The specifies to the distribution channel.
Elements of handling Distribution:
1. Material Handling: It involves moving products in and out of a stock. It consists of routine tasks that can be performed through mechanization and standardization. Efficiency is increase through use of electronic data processing to control conveyor systems, order picking and other traffic flaws.2. Inventory Planning and Control: Inventory refers to the stock of products a firm has on hand and ready for sale to costumers. Inventories are kept to meet market demands promptly. Inventory is the link interconnected the customer's orders and the company's production activity. The entire physical distribution management rotates around the inventory management. Inventory management is the heart of the game of physical distribution. Marketing managers undertake an inventory planning to develop adequate assortments of products for the target market and also try to control the costs involved in obtaining and maintaining inventory.
3. Order processing: Order processing and inventory control are related to each other. Order processing is considered as the key to customer service and satisfaction. It includes receiving, recording, fulfilling and assembling of products for dispatch. The amount of the time required from the dates of receipt of an order up to the date of dispatch of goods must be reasonable and as short as possible.
It comprises in undertaking the process that are needed to make certain orders proceed quickly, accurately, and efficiently. The marketing manager has to decide about these along with such issues as what the most efficient way to bill customers; how can the paper work may be minimized? And how can the physical function of assembling orders more efficiently?
4. Transportation: If is an essential element of physical distribution. It involves integrating the advantages of each transportation method by adopting containers and physical handling products to permit transfers among different types of carriers.
For example, to place containers in railway flat cars and then load the containers on motor vehicles is called "piggy back" and if the containers are off loaded to water carriers, it is called "flash back". Exchange of containers between air and truck carriers are referred as "Air truck" or "Birdy back".
The marketing manager has to decide to : What mode or combination of modes of transportation ( Rail, Truck, Pipeline, Water ways or air) Should be used to transport products to warehouse and from there to customers?
Should the transportation cost be reduced and the desired levels of customers service still maintained.
5. Communication: It is a process of passing information and undertaking system which should link producers, intermediaries, and customers. Computers, memory systems, display equipment and other communication technology facilitate the flow of information among other members in the channel.
A manager to be successful must develop an effective system of communication. So that he may issue instructions, receive the reasons of the subordinates, and guide and motivate them.
6. Organization Structure: The person in charge of the physical distribution should co-ordinate all activities into an effective system to provide the desired customer service in the most efficient manner. Examples of organizations are:
How can the five element of physical distribution best be coordinated to so that a team effort result? How can compartmentalization thinning be avoided?
If a central head is established to direct all physical distribution activities, to whom should he report- The head of the marketing or the chief executive office?
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By Affan Ali ( Source: Slideshare ).
