Business Performance Improvement Technologies - an Introduction

Distribution Management


Distribution is seeing some major changes as a result of information technology and also a re-think of the whole Distribution approach, prompted by the philosophies of Theory of Constraints and Lean Manufacturing.

For example, the Distribution challenge has always been to manage to have the right amount of the right products at the right place at the right time.

And, to a large extent that "right place" has been "close to the point of consumption."

But what's now clear is that availability of product at the point of consumption can be greatly improved, while inventories throughout the whole system are greatly reduced, by adopting the Replenishment method.

Fulfillment And Distribution

Fulfillment And Distribution
By Elizabeth Morgan

The process of delivering the product to the customer is termed as distribution. Distribution management consists of two major tasks: physical distribution and management of distribution channels. Physical distribution can be defined as the process of reaching the product to the consumers. It encompasses all the activities involved in the physical flow of products from producers to consumers.

It is physical distribution that provides place-utility and time-utility to a product. In other words, it is physical distribution that makes the product available at the right place and at the right time, thereby maximizing the company’s chance to sell the product and strengthen its competitive position. If a product could be consumed at the place and time of production, there would be no need for distribution. Such products are rare.

Almost every product gets consumed far away - both in time and space - from its point of manufacture. They have to be carried, stored and distributed. In the case of some products, the location of the production points is totally dictated by production considerations, like proximity to a port or to the source of raw material. In such cases, the production point may be far away from the market.

Distribution aids the process of demand generation. It is distribution that largely determines the customer service level. Through this, distribution serves as an effective tool for building up of clientele/ market. And conversely, inefficient distribution leads to loss of customers and markets.

Distribution is very important area for cost savings. Over the years, in most businesses, distribution costs have grown into a sizeable chunk of the total costs and now rank second among all cost elements, next only to the material costs.

Fulfillment provides detailed information about fulfillment, e-commerce fulfillment, fulfillment and distribution, fulfillment companies and more. Fulfillment is the sister site of Point Of Sale Hardware.

Article Source:

About Us | Site Map | Privacy Policy | Contact Us | ©2004-2008 JCG Inc | Performance Improvement