Physical Distribution Channel

Topics: Inventory, Warehouse, Small business Pages: 10 (3373 words) Published: April 9, 2011
Physical Distribution Management
Part of logistics management, physical distribution is concerned with the transporting of merchandise, raw materials, or by-products, such as hazardous waste, from the source to the customer. A manager of physical distribution must also assess and control the cost of transporting these goods and materials, as well as to determine the most efficient way to store them, which usually involves some form of warehousing. Hence, physical distribution (PD) is concerned with inventory control, as well as with packaging and handling. Customer relations, order processing, and marketing are also related activities of PD. In essence, physical distribution management (PDM) involves controlling the movement of materials and goods from their source to their destination. It is a highly complex process, and one of the most important aspects of any business. PDM is the "other" side of marketing. While marketing creates demand, PDM's goal is to satisfy demand as quickly, capably, and cheaply as possible. Currently, computerization is performing the major functions of physical distribution management, from long-range strategic planning to day-to-day logistics, inventory, and market forecasting. The best of these systems are tightly integrated with inventory and other logistics systems, and may even be linked to customers' systems, as is the case with efficient consumer response (ECR) systems. ECR systems, which some have criticized as being to narrowly focused, attempt to maximize distribution efficiency by delivering inventory on a just-in-time basis. Advanced distribution systems may employ satellite tracking and routing of trucks, electronically tagged pallets or cargo containers, and elaborate data monitoring and storage capabilities. Data collected from these activities are used to identify weak spots in the chain and benchmark improvements. Often upstart companies and even some large ones as well, rely on third-party distributors for at least some of their physical distribution, and hence there is an entire industry of third-party logistics services. These and other outsourcing services received a great deal of attention during the 1990s, as manufacturing companies sought to eliminate peripheral activities when they could do so at cost savings. Smaller companies, on the other hand, frequently lack the expertise or resources to perform their own distribution. Nonetheless, some distribution analysts criticize the outsourcing movement because the net cost savings may be less than anticipated and the quality of the logistics service may be hard for the manufacturer to control. Up to now, PDM has been concerned with the movement of physical objects. In the future, however, it will have to accommodate itself to the increasing shift of the economy away from manufacturing and toward service industries. In this new realm, environmental cleanup and the disposal of waste undoubtedly will be increasingly important to PDM. The expansion of global markets is also affecting PDM, requiring enormous technical and operational refinement. Logistics this discipline is an ancient and young subjects. It old, because the logistics behaviour in our business operations has long existed in our business operations in the transportation, storage, packing, loading and unloading, distribution and processing are all logistics activities, our predecessors in this field has been hard for many years, has been With a wealth of experience and wide range of applications, therefore, it should be an age-old subject.  Physical distribution is the set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution takes place within numerous wholesaling and retailing distribution channels, and includes such important decision areas as customer service, inventory control, materials handling, protective packaging, order procession, transportation, warehouse site...
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